Riddle v. McLester-Van Hoose Co.

TYSON, J. This appeal is prosecuted from an order granting the defendant’s motion for a neAv trial. The plaintiff’s cause of action is based upon his right to recover the proceeds of certain checks and a lot of shingles, which were misappropriated by defendant after deduct [311] ing certain indebtedness admitted to have been dne by Mm to it. The main defense relied on is res acljv,dicata. The pivotal point is whether the plea involving this defense was proven. If it was, confessedly the order appealed from should not be disturbed. It appears from the evidence that the plaintiff was a member of the firm of Smitherman & Co., and that his firm was justly indebted to the defendant in a sum of money evidenced by four promissory notes. Suit was brought on each of these notes before a justice of the peace, and judgment was rendered in favor of the plaintiff, the defendant in this action. An appeal was prosecuted to the circuit court in each of the cases by Biddle and Smitherman & Co., and by agreement the four cases were consolidated and tried by the presiding judge without a jury. A written memorandum of the testimony introduced upon that trial Avas made by the judge and filed in the cause. The pleas of the defendants, of which the plaintiff in this action Avas one, AArere the general issue, non ost factum,, payment, and set-off. The evidence is undisputed that the claim here asserted and sought to be recovered on was asserted and proven as a defense to that action, Avhich resulted in a judgment for the defendants. This claim, it appears, arose in this manner: Smitherman had, prior to his partnership Avith Biddle, become indebted to the defendant, for which he gave, after the formation of the partnership, promissory notes executed in the firm name. These notes Avere paid and discharged by checks draAvn on the funds of the partnership and the proceeds of shingles belonging to the partnership, under agreement had with Smitherman that they should be so applied by defendant. All this was done AA’itliout the consent of Biddle. On the trial in the circuit court Biddle, repudiated Smitherman’s right to divert the firm assets to the payment of his individual debts, and succeeded in setting off the proceeds of the checks and shingles to the extent of the debt claimed against him, which he admitted were justly OAving by him and Smitherman & Co. Indeed, under the unidsputed facts established on that trial, the judgment rendered in favor of defendant, Biddle, is necessarily referable to [312] his plea of set-off, and to no other that was pleaded by him. The execution of the notes was not denied, nor was Smitherman’s authority to execute them in the firm name questioned. The debt evidenced by them was admitted to be the debt of the firm. The proceeds of the checks and of the shingles were not payments upon the notes in any proper sense of the term. Their application to Smitherman’s individual indebtedness was wrongful only against Riddle, his partner, and not subject to be set aside, except at his instance and election. Until he disaffirmed Smitherman’s agreement with the defendant to apply the proceeds to his debt and directed their application to the partnership debt, they did not, in any sense, constitute payments on such debt. — 4 May-field’s Dig. p. 425; 22 Am. & Eng. Ency. Law (2d Ed.) uu. 575, 576 and notes. That Riddle had the right to set off these claims to the extent of the debt sought to be recovered of him cannot be doubted. He was not entitled, it is true, to a judgment over in his favor for the excess. — Locke v. Locke, 57 Ala. 473, and cases there cite. He was, of course, not bound to plead set-off as a defense. It was entirely optional with him; but having done so, and offered evidence to support his defense, and having defeated the plaintiff’s recovery against him, he must be held to a release or remittur of the residue of his demand. This, precise point was decided in S. & N. R. R. Co. v. Henlein, 56 Ala. 368, in a well-considered opinion, and whatever view we might have entertained if the question was res integra in this state is foreclosed by that case, which has been the law unchallenged for many years. Affirmed. Haralson, Anderson, and Simpson, JJ., concur.