Court Opinion

ID: 6515113
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:25:54.468522+00
Date Added: 2024-06-11T15:54:59.841217
License: Public Domain

COLEMAN, J.
It appears to,us that a mere statement of tbe facts of this case is sufficient to justify tbe ruling of tbe trial court upon tbe questions assigned as error.
H. C. Keeble & Co., for a past due indebtedness, executed tbeir negotiable promissory note to plaintiff, Hood, payable on demand, for tbe amount of said past indebtedness. Some thirty days after tbe execution of tbis note, tbe defendants, Bobbins & Smith, indorsed tbe same in blank, and when thus indorsed, tbe note was re-delivered to plaintiff. There was no consideration for tbe indorsement of tbe note by Bobbins & Smith, and none expressed, and tbe terms of tbe note remained as when executed by Keeble & Co., a note payable on demand. Tbe note was never negotiated, but remained in tbe bands of tbe payee, who instituted tbe present action against tbe indorsers. After tbe suit was brought, tbe plaintiff wrote across tbe hack of tbe note, over tbe signature of tbe indorsers, as follows : “In consideration of tbe postponement of demand of payment of tbe within note, we hereby indorse tbe same.” It is admitted that - the in-dorsers, tbe defendants, knew nothing of tbe writing of tbis assumption above tbeir names, and .that it was made in tbeir absence, and without tbeir knowledge, and was never ratified by them.
Appellant contends that, as tbe indprsement was in blank, tbe bolder was authorized to fill out the blank in such manner as be saw proper. Tbis is an entire misapprehension of tbe rule, which permits tbe bolder of indorsed paper to fill blanks in tbe indorsement. Tbe owner of indorsed paper may write over tbe name of an indorser, who has indorsed a note in blank, whatever may be necessary to invest him with tbe legal title, or confirm bis ownership, but no rule of law will authorize' tbe bolder, by an indorsement on tbe back of tbe note, to change tbe liability of tbe indorser, or take away any defense which legally pertains to tbe indorser. With equal propriety, a bolder who bad neglected to protest or give notice of protest, might, deprive the indorser of such a defense, or be could write any statement to destroy any other legal defense of tbe indorser. Tbe plaintiff misapprehended tbe principle of law invoked by him. Principles of law which protect commercial paper apply after it has been negotiated, for tbe protection of innocent bona fide purchasers. Gilman v. New Orleans & Selma R. R. Co. 72 Ala. 583; Connerly v. Planters Ins. Co., 66 Ala. 432.
*488As between tbe original parties to tbe note, those wbo are fully advised of all tbe circumstances attending its making and indorsement are not regarded as innocent bona fide purchasers. Tbe payee of a note made purely for bis accommodation can not maintain an action against tbe drawer, nor against tbe indorser wbo indorses it purely as an accommodation for tbe drawer, there being no consideration moving to or from tbe payee. In the present case, tbe note was given to Hood for a past due indebtedness to him, and it was made payable on demand. In this condition, and without an extension of time, or any other consideration, some thirty days after its execution by tbe maker, it was indorsed by tbe defendants purely as an accommodation to tbe drawer, all of which was fully known to tbe plaintiff. Tbe plea of want of consideration, predicated upon these facts, was an answer to tbe suit.
We further bold that, as to the payee, under tbe facts, tbe indorsement was “an irregular indorsement,” and was no more than an undertaking “to answer for tbe debt, default, or miscarriage of another,” and is void under tbe statute of frauds, in failing to express tbe consideration.
We do not decide that tbe statute of frauds applies to commercial paper, but we have said no paper- is entitled to tbe protection of the commercial law, not held by an innocent bona fide purchaser. In tbe bands of tbe payee, wbo has parted with nothing, wbo has neither assumed any obligation, nor parted with any right, wbo received tbe paper with a full knowledge of all the defenses against its binding-force, a paper, however strictly commercial in form, is not entitled to tbe privileges and protection accorded to such an instrument after it has been negotiated, and thereby made commercial paper in its true sense. Dunbar v. Smith, 66 Ala. 490. Tbe evidence fully sustains tbe pleas of tbe defendants.
There is no error in tbe record, and tbe judgment must be affirmed.
Affirmed.