Court Opinion

ID: 3404221
Source: CourtListenerOpinion
Date Created: 2016-07-05 19:17:31.496584+00
Date Added: 2024-06-11T13:44:30.632834
License: Public Domain

The answer of the defendant set up a good defense to the note sued on, as against general demurrer. The court erred in sustaining the demurrer to the answer, and in rendering judgment in favor of the plaintiff.
                         DECIDED JUNE 30, 1943. *Page 603 
Davison Chemical Corporation sued P. D. Temple on a promissory note for a balance of principal alleged to be due thereon, with interest and attorney's fees. The defendant in his answer admitted that he executed the note and that the plaintiff was the legal holder and entitled to sue on it and alleged that the admission was made for the purpose of obtaining the right to open and conclude the argument. The answer further alleged: that the defendant made an agreement with plaintiff's general manager to handle fertilizer for the plaintiff in 1941 and to execute his note for the amount of fertilizer products he received to be sold; that he would take customers' notes payable to the plaintiff, but that they were to remain in his hands and be handled by him and collected by him and when collected would be credited on the note; that it was agreed that the note sued on was not to be binding until and unless defendant would be allowed to handle all of his customers' notes; that the note was not to become operative as a presently binding contract unless defendant was permitted to handle and collect all of the customers' notes; that in violation of the agreement plaintiff's general manager took all of the customers' notes from defendant on February 20, 1942, against defendant's protest, and without his consent and turned them over to an attorney; that defendant collected a large number of the notes up to February 20, 1942; that all of the notes taken from him were collectible, except two or three, and that the failure to collect them was due to the negligence of the general manager, and that by reason of its failure to collect the notes defendant has lost credit on the note he gave, to his damage; that Comer C. Echols offered to pay plaintiff's attorney his note for $297.86 provided he could purchase fertilizer for 1942 on credit, but that plaintiff sold Echols fertilizer for 1942 for cash and did not collect the note; that A. O. Phillips owed the plaintiff a note for $222.65, and defendant had made arrangements with him to pay it but the general manager took the note from the defendant and sued Phillips, making him mad, and Phillips refused to pay, and that the matter was handled without any tact, and harshly, and the collection of the note was defeated by the negligence of the general manager; that a list of notes given in the answer were collectible and would have been collected had not the plaintiff taken *Page 604 
them from the defendant in violation of the agreement. By amendment to the answer it was alleged that the agreement as to the handling of the notes formed the consideration for defendant's signing the notes and the taking of the notes from defendant was a failure of consideration of the guaranty and the defendant was entitled to credit on the note sued for the amounts of the customers' notes taken out of his hands. The court sustained a general demurrer to the answer, and the defendant excepted to the final judgment and the ruling on the demurrer to the answer.
The defendant admits that he executed the note, that the plaintiff is the legal holder thereof, entitled to sue thereon, but that the defendant is not liable by reason of certain defenses alleged in his plea and answer. The allegations of the defendant in his plea and answer that by reason of an alleged agreement between him and the plaintiff the note was executed in the amount of the price of the fertilizer and products which he received from the plaintiff to be sold by him but that these notes would remain in the defendant's hands and be handled and collected by him and the proceeds credited on the note sued on, and that if the defendant be not allowed to handle the customers' notes as agreed, the note sued on would not become operative as a presently binding contract, and that the plaintiff, without the defendant's consent, took from the defendant these customers' notes, are insufficient to show that the note sued on was conditionally delivered to the plaintiff and was not an unconditional obligation to pay, and that the plaintiff would not be entitled to sue thereon. This agreement can not be engrafted on, or read into, the note. The note is an unconditional obligation of the defendant to pay the plaintiff the amount of the fertilizers which the defendant had handled and sold for the plaintiff to the various customers. The alleged agreement urged by the defendant as a defense to the note is a part of the entire agreement. By its terms the defendant is placed in the advantageous situation where he himself can collect from the customers the amounts due on their notes, and apply such proceeds on the note sued on which is only a guaranty by the defendant of the indebtedness of the various customers to whom he had sold fertilizers for the plaintiff. If the plaintiff took from the defendant *Page 605 
these customers' notes without the defendant's consent it violated this contract to the defendant's damage in whatever amount may be shown by proof. The defendant's plea in setting up a violation by the plaintiff of this contract is in the nature of a counter suit for damages for a breach of the contract.
The plea and answer of the defendant contained a valid defense to the note sued on. The court therefore erred in sustaining the plaintiff's general demurrer to the defendant's plea and answer and in rendering judgment for the plaintiff in the amount of the note sued on.
Judgment reversed. Stephens, P. J., and Felton, J., concur.Sutton, J., dissents.