Bradley, Wilson & Co. v. Patton, Donegan & Co.

B. F. SAFFOLD, J. Section 1833 of the Revised Code expressly subjects bills of exchange, and promissory notes payable in money at a bank or private banking-house, to the government of the commercial law, except so far as the same is changed by the said Code. On all contracts assigned by writing, except such commercial paper, when the amount due is over fifty dollars, to charge the indorser or assignor, suit must be brought against the maker in the county of his residence, to the first court to which suit can properly be brought after making the indorsement or assignment. R. C. § 1851. The holder of such indorsed or assigned contract is excused from bringing the suit, when the maker has no known place of residence in the State. R. C. § 1854, cl. 1. In Goggins v. Smith’s Adm’r (35 Ala. 683), the note was executed in this State, by a resident of the State, and seems to have been payable generally. The túne and place of the indorsement are not mentioned, but it is fair to presume that the place was also in Alabama. The maker, shortly after his execution of the note, removed from the State, and, it may be concluded, no more had any known place of residence within the State. The court, construing sections 1851 (1543) and 1854 (1546), held the indorsee excused for not having made demand of the maker, or given notice to the payee indorser, before bringing suit against the latter. Woodcock v. Campbell (2 Port. 456) was a similar case, and was decided in the same way, though at that time the statute (Acts of 1828-9) prescribed no such ground of excuse as the one mentioned above. The court supplied the excuse, because “the very language of the enactment would imply that this requirement of suit has reference to our own internal judicial and geographical economy.” In both of these cases, it was considered that the commercial requisition of demand and notice of the non-payment of a negotiable note was modified by the state law to a suit to the first court against the maker, when such note was not payable at a bank or private banking-house. [113] In Ivey v. Sanderson (6 Port. 420), the court distinguished it from Woodcock v. Campbell, supra, by the knowledge which the indorsee had, at the time of the indorsement, of the maker’s place of residence in another State. Judgment was given against the assignee, because he had made no effort to collect the money out of the maker, and had assigned no reason for his neglect to do so. Bristow & Rosser v. Jones (1 Ala. 159) is to the same effect. The contract of an indorser, with and in favor of his indorsee, and every subsequent holder to whom the note is transferred, under the commercial law, is, that if, when duly presented, it is not paid by the maker, he will, upon due and reasonable notice given him of the dishonor, pay the same to the indorsee or other holder. Story on Prom. Notes, § 135. In respect to the immediate indorsee of a non-negotiable note, the indorsement will, ordinarily, create the same liabilities and obligations on the part of the payee, as the indorsement of a negotiable note. The indorser’s liability is collateral only, and he cannot be treated as the maker thereof. Story on Prom. Notes, § 128, and note. In the present case, we must presume the contract of the parties to have been, either that the indorser should become primarily liable to pay the note, or that the indorsee undertook to make some effort to collect the money out of the non-resident maker. Neither of these suppositions is consistent with a suit against the maker to the first court of our State, and a return of execution “No property.” Sections 1854 and 1851 of the Revised Code evidently contemplate the practicability of a suit against the maker in the State, in preserving the collateral character of the indorser’s liability, and in excusing the suit, when the maker has no known place of residence in the State, or when, by the use of ordinary diligence, such residence cannot be ascertained. A person may reside in the State, without having a known place of residence; and he may have a known place of residence, which the holder of the contract may not be able to find in fime for the first court. These statutes manifestly refer to notes made, assigned, and held by our own citizens, as was said about the requirement of the suit in Woodcock v. Campbell, supra. If not, as an indorsement is governed by the law of the place in which it is made, we might have one indorser defeated of his suit, because he had not sued the maker to the first court, and another, because he had done so, instead of giving timely notice, on like instruments, under the same statutes, without reference to the personal jurisdiction of the court. The grounds of excuse for not suing the maker, enumerated in R. C. § 1854, are not different from those previously decided by this court to be sufficient. It is fair to presume that they were intended to be the [114] same in substance. If so, the former distinctions of cases are preserved, and the authorities above quoted are applicable now. The charge refused ought to have been given. 2. The exclusion of Bradley’s testimony, on the ground of his incompetency as a witness to testify to a conversation between himself and the deceased partner, Patton, under R. C. § 2704, was erroneous. A transaction with, or statement by one partner, embraces all of the partners. Bragg v. Clark, at January term, 1874. We say nothing about the admissibility of the testimony as affecting the contract. The judgment is reversed, and the cause remanded. Brickell, J., not sitting, having been of counsel.