Court Opinion

ID: 3221634
Source: CourtListenerOpinion
Date Created: 2016-07-05 15:58:16.417578+00
Date Added: 2024-06-11T13:50:13.002181
License: Public Domain

The only issue which I take with the opinion is its averment that plea 6 sets up a contemporaneous agreement in contradiction of the written contract. Certainly there is no issue with the statement of law that a plea is bad which does that.
I think that the stipulations of the indorsement only affect the relations between the indorsers and payee. To illustrate: There is a principle by which the payee, if a banker, with notice of accommodation indorsers, owes to the indorsers the duty to apply to the payment of the note funds of the maker, the primary debtor, which are on deposit with the payee as such banker, when the note became due, and a failure in that regard ordinarily discharges such accommodation indorsers. Tatum v. Com. Bank  Tr. Co., 193 Ala. 120, 69 So. 508, L.R.A. 1916C, 767; Fruitticher Elec. Co. v. Birmingham Tr.  Savs. Co.,201 Ala. 676, 79 So. 248; 7 Corpus Juris 657.
It has been held that an agreement of the nature indorsed on this note rendered inapplicable the doctrine just stated in a suit by the payee against the indorsers, who by such stipulation rendered themselves unconditionally liable to the payee. Little v. People's Bank, 209 Ala. 620, 96 So. 763.
I concede therefore that a parol agreement by the payee to apply such funds to the payment of the note would contradict such agreement by the indorsers with the payee, as a result of the holding in that case. That case held that on account of such stipulation they waived all conditions to their liability to the payee. But I think their relations to the payee and among each other, and with the maker, are distinct. The fact that the indorsers have waived conditions to their liability to the payee should not affect their agreement among themselves respecting their relations thereby established. They could by agreement thus establish among themselves as affecting the duty of contribution the status that one or more shall be liable in priority *Page 610 
to others, or that their liability is joint or several. Moody v. Findley, 43 Ala. 167.
The duty of the maker to his accommodation indorsers, to pay at maturity, is the legal effect of his execution of the note as the primary debtor. This duty extends not only to use its funds on deposit with the payee, as banker, but extends to the use of other funds available at maturity, and also to the point of procuring funds for that purpose. It requires no express contract between the maker and accommodation indorsers to that effect. Therefore if there is such an express contract it is but the expression of a legal duty otherwise existing by their relations. So that if plaintiffs, who were coindorsers, were officers of the maker, a corporation, and in charge and management of its affairs, and as such caused it to violate its duty to defendant when it could and should have performed it by paying the note, plaintiffs thereby assume the burden of such breach, in respect to their relations with defendant as a coindorser. They thereby violated a duty to defendant sufficient to destroy the liability for contribution, which is enforced at law as in equity on principles of equity and justice. Scott v. McGriff, 222 Ala. 344, 132 So. 177; Douglass v. Orman, 218 Ala. 567, 119 So. 605.
I think the opinion is in error to the extent that it is based upon the idea that the agreement of the indorsers as it appears on the note is in nature an agreement which limits the duty of the maker to the indorsers to pay the note as evidenced by its legal effect. It is true that it fixes the relation of surety-ship rather than that of indorsement strictly so called, so as to bind them as ordinary sureties as held in Little v. People's Bank, supra. And the further agreement that an extension of the note by the payee will not discharge them as such sureties does not in any respect change the legal duty of the maker as the primary debtor to pay the note when due.
I think that plea 6 is therefore not subject to the defect discussed in the original opinion.
GARDNER and BROWN, JJ., concur.