Andrews v. Meadow

SHARPE, J. We preface with the statement that the sufficiency of the pleading will be passed on only so far as the same is questioned by specific objections and that the assignment of error based on exceptions cannot be considered for the reason that the bill of exceptions does not purport to have been signed as required by section 616 of the Code, within the term at which they were taken, or thereafter by any order or agreement extending time for signing. If the pleas set up defenses good to defeat the plaintiff in case he knew of or ivas a party to the transaction in which the instrument in suit originated, they were sufficient to devolve on the plaintiff the necessity of replying his ignorance of those defenses at the time he became an indorser. That the pleas did not affirm plaintiff had notice of or participated in the original transaction was not ground for demurrer. The demurrers to the replications should have been overruled. In respect of rights as well as liabilities, an accommodation indorser of negotiable paper is in a situation analogous to that occupied by those who indorse in the regular course of its transfer from one holder to another. If compelled to pay it in whole or in part he may maintain an action against the maker for the amount paid — Perry v. Tuscaloosa, etc., Co., 85 Ala. 158. This is so whether the indorsement be for the accommodation of the payee or maker. It is true one may not make another his debtor without the other’s consent and, therefore, a recovery against the maker cannot be founded on an indorsement made officiously or at request of a stranger to the instrument. A decision to that effect was rendered in Willis v. Hobson, 37 Maine, 403. But in view of usages recognized and sanctioned by commercial law, indorsements made for the payee’s accommodation are held to have been impliedly invited [446] by the maker, and one who for such purpose and in good faith indorses negotiable paper which the payee also indorses, may if compelled to pay, maintain an action against the maker upon the same rights he could have asserted had the instrument been indorsed to him regularly, and will accordingly be protected as against defenses of which he was ignorant when indorsing. The theory upon which a suit proceeds is stated in Breckenridge v. Lewis, reported in 84 Maine, 349, and in 30 Am. St. Rep. 353: The plaintiff in that suit indorsed the defendant’s promissory note for the accommodation of the payee who then negotiated the same, and when it fell due the plaintiff paid it, and - afterwards sued to recover from the defendant the amount of the note. It was denied that plaintiff was a bona fide holder of the note so as to shut out equitable defenses. The court held that position untenable, saying: “When the plaintiff indorsed the note for the accommodation of the payee, he became liable thereon, subject to mercantile usage; and held the same relation to the maker as if he had discounted the note himself, instead of indorsing it. The payee received the money on the note from the holder, to whom the plaintiff became contingently liable for its payment; and when the plaintiff became absolutely liable to pay the note, and did pay it, the promise of the maker, negotiable in form, transferred by the payee’s indorsement, ran to him; and it could make no difference to the maker by what means or for what consideration the plaintiff gained title to the note. He then held it with the same rights in regard to it as if he had given the payee the money on the note, instead of an accommodation indorsement that afterwards compelled the payment of money, or an equivalent agreed to between him and the holder, to whom it had been negotiated.” A similar decision upon like principles was made in Sheahan v. Davis, reported in 27 Oregon, 278, in 28 L. R. A. and in 50 Am. St. Rep. 722. In Laubach v. Pursell, 35 N. J. Law Rep. 434 and in Beckwith v. Webber, 78 Mich. 390, the same principles ruled. We regard these decisions as sound and as authority applicable to the present case, for within the meaning of our ' [447] statutes specifying what instruments are governed by commercial law a bank check is in effect a bill of exchange. — First Nat. Bank v. Nelson, 105 Ala. 180; Morris v. Enfaula Nat. Bank, 122 Ala. 580. Reversed and remanded.