First National Bank of Lineville v. Alexander

SIMPSON, J. This suit was by the appellant against the appellee on a noncommercial promissory note alleged to have been made by the defendant to one J. M. Minnis, and by him indorsed to plaintiff before maturity. The only assignment of error is to the ruling of the court in overruling plaintiff’s demurrer to the sixth plea interposed by the defendant, and the only point raised by said demurrer, and insisted on in argument, is that the facts set up in said plea show an agreement made by the bank, which it had no authority to make, and which was ultra vires. There is no question about the proposition that a corporation may defend against executory contracts by showing that the contract was either made by an officer of the bank who had no authority to make it or that the contract was ultra vires. — 29 Am. & Eng. Ency. Law (2d Ed.) 49. It is true that after a contract has been executed, and the corporation has received the benefit of the agreement it cannot hold the benefit and at the same [588] time claim release from the agreement on the ground that it is ultra virs or beyond the power of the officer to make it. — 29 Am. & Eng. Ency. Law (2d Ed.) p. 50; Stebbins v. Lardner, 2 S. D. 127, 48 N. W. 847; Logan Co. Bank v. Townsend, 139 U. S. 67, 74, 11 Sup. St. 496, 35 L. Ed. 107; Eastern Bldg., etc. Ass’n v. Williamson, 189 U. S. 123, 129, 23 Sup. Ct. 527, 47 L. Ed. 735; Patrick v. Petty, 83 Ala. 420, 423, 3 South. 779. But plea 6 does not show that the corporation ever received any benefit from the work which was done on the railroad. There is only an intimation that there was an agreement between the maker and the payee that the note was to be paid in work, and, if there was such an agreement, yet it would not amount to a binding agreement, so long as it was executory. — Patrick v. Petty, supra; Tuskaloosa Cotton Seed Oil Co. v. Perry, 85 Ala. 159, 167, 4 South. 635. Consequently, when the bank received the note, it was not bound to accept payment in anything but money, and no officer of the bank had the authority to agree to receive anything but money in payment thereof.- — Bank of Commerce v. Hart, 37 Neb. 197, 55 N. W. 631, 633, 20 L. R. A. 780, 40 Am. St. Rep. 479. This being the law, and there being no principle of estoppel set out in the pleading, as above stated, it results that the demurrer to plea 6 should have been sustained. The judgment of the court is reversed, and the cause remanded. Reversed and remanded. Tyson, C. J., and Anderson and Denson, JJ., concur.