Hagerthy v. Bradford

GOLDTHWAITE, J. 1. The suit which the assignee of notes, not negotiable as commercial paper, is required to commence against the maker at the first court to which he can be sued, in the county of his residence, (Dig. 383, $ 12,) has always been understood to have the same relation to the indorser’s liability, as demand and notice has, when the pader is negotiable, or commercial. [Ryland v. Bates, 4 Ala. Rep. 343.] From the very nature of this contract, by the [571] indorser, there must be many exceptions to the rule provided by the statute, but we are not aware, that the fact of a set off against the payee, who is not also the indorser, is one. The circumstance that such a set off exists, does not enter into the consideration of the note, nor, in general, is it an equity which attaches to it. The cases cited by the plaintiff’s counsel, so far as we have had opportunity to examine them, do not reach the case of a set off, but show, that when the consideration of the note fails, or is illegal, this may sometimes excuse the omission to give notice, and by analogy, the omission to sue. [Gee v. Williamson, 2 Stew. 512; S. C. 1 Porter, 313; Carl v. McDougall, 9 Mass. 1.] We say may sometimes excuse, because it is by no means clear, that it will be so when the suit is against an indorser who, as here, is not the payee. There is a very strong reason why set off should not stand on the same ground with failure of consideration, illegality or other defence, inherent to the note, and that is, the party is not obliged to avail himself of the privilege of set off, but may, when he chooses, resort to his cross action. Upon the best consideration we can give this question, we think the existence of a set off against the payee who is not the indorser, does not relieve the holder from his obligation to .sue at the first term. 2. In this connection, we shall notice the argument that the finding of the jury is for the entire sum of the note, from which we are called to infer the erroneous charge, did not .in fact enter into the verdict which, as the counsel insists, must have been returned on the contested point as to the residence of the maker, when the suit was instituted against him.in Tallapoosa county. It may be the jury determined' so, but the answer to the present argument is, that the fact .cannot certainly appear to us, and even in the event the verdict was improper, the court below might not have felt bound to award a new trial. As error is clearly shown in one part of the case, it can only be relieved by other disclosures in the record, showing, beyond a reasonable doubt, that injury did not result from the error. [Shehan v. Hampton, at this term.] 3. Upon the other point in the case, we omit to scrutinize the correctness of the charge .asked for, as well as that given [572] in lieu of it, and shall deem our duty discharged, in stating what rules govern the remedy against the indorser, when the assignee fails in maintaining his suit against the maker, com'menced in accordance with the statute. If the analogy between the suit under the act, and demand and notice, is carried to the extent of holding, that the mere want of success against the maker, will authorize a recovery against the indorser, and preclude him from showing that the defence was improperly allowed, in cases where no notice was given of the pendency of the action, it would possibly introduce mis-, chiefs which never were contemplated by the framers of. the law, and permit a recovery, when the loss of the suit against the maker is entirely the result of either negligence or mismanagement. On the other hand, the remedy will be almost valueless, .if the party is compelled to enter into a new contest with the indorser, and be obliged to prove over again the defence of the maker. 'Warranties of personal property will more appropriately furnish the analogies by which the remedy of the indorsee is to be governed in the absence of direct decisions, or statutes similar to our own. The general rule is, that when a suit is commenced by a stranger, and notice is given to the warrantor, he is responsible for the damages recovered, and is concluded by the verdict. We think the same rule must apply when the indorser is notified of the pendency of the suit against the maker, or advised of any defence interposed; as, with respect to the action, he occupies a very similar position with a vendor. [See Salle v. Light, 4 Ala. R. 700, and cases there cited; Gardner v. Goodloe, 2 Hayw. 351.] But what is the rule when no notice has been given ? In Scales v. Wilson, 9 Leigh, 473, the assignee of a bond in Yirginia, submitted his action against the obligor to arbitration, and it was awarded in favor of the obligor, on account of sets off against the assignor. On a suit against the assignor, he insisted he was not bound by the judgment on the arbitration; but the court held, it was prima fade obligatory on him. In Train v. Gold, 5 Pick. 380, one not connected with a suit, had undertaken to indemnify an officer for a levy, and he was held prima fade bound by a judgment against tRe officer, although obtained without notice to the indemni [573] tor. These cases will authorize us in the conclusion, that the judgment in favor of the maker, upon the merits of the note, is in all cases prima facie evidence against the indorser, and that it rests with him to show, the defence then interposed was invalid. Without further extending our opinion, it is likely what we have said will suffice for the decision of this cause when tried again. For the error noticed, the judgment is reversed and the cause remanded.