Grayson v. Glover

RICE, C. J. Under section 1530 of the Code, a promissory note is “assignable by endorsement, so as to authorize an action thereon by each successive endorsee.” When not payable at a bank or private banking-house, it is, under section 1531 of the Code, “ subject to all payments, sets-off, and discounts, had or possessed against [184] the same previous to notice of the assignment or transfer.” It may, under section 2240 of the Code, be pleaded and relied on asa set-off by the assignee, in a suit brought after it became due, and after the assignment, where, as here, the suit against him is founded upon a note made by him and another. And when it is so pleaded and relied on in defense, the assignor or endorser, if released from all liability on account of the promissory note or the transfer thereof, is, under the Code, a competent witness for the defendant—the endorsee—to prove the time when the endorsement was made.—Code, §§ 2290, 2302; Todd v. Hardy, 9 Porter’s Rep. 346; Tipton’s Adm’r v. Robinson’s Adm’r, 31 Ala. R. 595; Commonwealth v. Cooley, 10 Pick. R. 37. Although a plea of set-off is in the nature of a cross action, it certainly is not a suit within the meaning of section 2290 of the Code; nor does the defendant become “the plaintiff ” in the suit, by'merely pleading thereto as a set-off a promissory note made by the plaintiff to a third person, and endorsed by that third person to the defendant. ■ Section 2290 makes “the transferror, or party with whom the contract was originally made,” an incompetent witness “for the plaintiff, to prove the cause 'of action ; ” and that, only “ when suit is brought by the transferree.” It does not exclude the endorser of a promissory note, when he is fully released by the defendant endorsee, and offered as a witness for that defendant. These views bring us-to the conclusion, that the court below erred in ruling that Tuller was not a competent witness for the defendants. And that conclusion makes it probable, that it is unimportant to the parties that we should decide expressly whether “the memorandum, or note in pencil made by 'William Glover, (the payee of the note sued on,) on the note claimed by defendants as a set-off in this case,” was admissible. It is deemed sufficient to say, that if it was made before he transferred the note sued on, it was clearly admissible, as it was the first step towards proving a partial payment of the note sued on; and was relevant to an issue in the case.—Cuthbert v. Newell, 7 Ala. R. 457; Laroque v. Russell, 7 Ala. R. 798. [185] Such declarations of the payee of a note, when made before he has transferred it, are, beyond all question, evidence against the transferee, in favor of the makers of the note. Whether the declarations of the payee are not admissible against the transferee in favor of the makers, in the absence of all proof as to the time when they were made, we deem it unnecessary to decide, and therefore decline to decide.—See Sally, use &c. v. Gooden, 5 Ala. 78. Eor the error above pointed out, the judgment is reversed, and the cause remanded.