Planters Chemical & Oil Co. v. Stearnes

MAYFIELD, J. Appellant sued, appellees on a promissory note which was in words and figures as follows : “1638.76 Guntersville, Ala., May 20, 1910. “On the first day of January, 1911, the Farmers’ Union Warehouse & Mfg. Co-, promise to pay Planters’ Chemical & Oil Company, or order, the sum of six hundred thirty eight & 76/100 dollars, value received. And for the faithful payment of this note and attorney’s fees, we hereby waive any and all rights we have under the laws of Alabama and of every state to claim any property exempt from levy and sale or choses in action from garnishment. Should this note be not paid at maturity and be placed in the hands of an attorney for collection we agree to pay the holder or assignee such reasonable sum as said attorney may charge as a fee for the collection thereof. It is agreed by the maker and indorser hereof that this note is negotiable and not subject to offsets, recoupments, discounts and equities of nonnegotiable paper. Protest and notice as well as suit against the maker and indorser or indorsers is hereby by each of us severally waived. It is further agreed by the maker and indorsers that upon failure to pay this note at maturity all other obligations owing by them jointly or severally to said payee may at once, at the option of said payee, become due. “Payable at the Talladega National Bank, Talladega, Ala. “J. B. Stearnes, Pres. [L. S.] “J. H. Wood, Vice President. [L. S.] “J. W. Nelms, Sec. & Treas. — 505 — “J. M. Dodd. “W. S. Wiles. ' [Seal.] Farmers’ Union Warehouse & Mfg. Co., Gunterville, Ala.” The defendants pleaded specially: (1) Non est factum; (2) that the consideration for the note was commercial fertilizer, and that it was not tagged; (3) that no statement was filed with the commissioner of agriculture as required by law; (4) that the bags were not properly branded; (5) that there was no consideration for the note; and (6) that the fertilizer did not contain the amounts or percentage of phosphoric acid, nitrogen, and potash, required by law. It was not contended on the trial that the note was not actually signed by the defendants, but it was contended that they did not sign in their individual capacities, but signed’ only as officers of the Farmers’ Union Warehouse & Manufacturing Company, and that the corporation alone was bound. Whether the plea of non est factum raised this issue as to the capacity in which the defendants signed is not contested on this appeal. i The note on its face is ambiguous as to the capacity in which these defendants signed. The promise, in the body of the contract, is that of the corporation, and not of the officers or parties signing; but in the conditions, as to the payment of attorney’s fees, etc., and as to waiver of' the rights of exemption, it appears that the signers are bound, and not the corporation, for the reason that the corporation, or the officers, as such, had no exemption rights to waive; and, if the officers were not made liable individually, what was the occasion or use of their waiving their rights to exemptions and promising to pay attorney’s fees and costs? Parol evidence was therefore admissible to explain or clear this — 506 — apparent ambiguity. Sucb evidence, in cases of this kind, does not contradict or vary tbe writing, but explains it, and so aids in the ascertainment of tbe real contract between tbe parties. But, from tbe fact that parol evidence is admissible in sucb cases, it does not follow that tbe signers can testify as to tbeir undisclosed intentions in signing tbe notes. Nor are conversations between or among tbe signers, when the payee or other parties to tbe note are not present, binding on the payee or bolder; and they are therefore not admissible, unless they form a part of tbe res gestae of tbe execution of tbe note.. Any conversation by and between tbe parties to the instrument, at tbe time of, or prior to, tbe making of tbe note, which will tend to explain tbe ambiguity on tbe face of tbe note is admissible; but conversations between tbe makers, bad in tbe absence of tbe payee or other parties interested in tbe making of tbe note or contract, are not admissible. Tbe other parties must be bound by tbe declarations or acts, for them to be admissible; they must have bad tbe opportunity to deny tbe statements or declarations, before they are bound thereby. It was-likewise not admissible for tbe signers of tbe notes to prove that they never beard any of tbe makers say that they signed tbe notes individually, except in so far as sucb testimony might tend to contradict evidence offered by tbe plaintiff to show that sucb makers signed tbe notes individually. When negotiable instruments, like tbe one in question, on tbeir face are free from ambiguity as to tbe capacity in which tbe signers or indorsers executed them, parol evidence is not admissible to make that fact uncertain; but when, as in this case, tbe note on its face is uncertain as to that fact, then parol evidence is admissible to make it certain. But sucb parol evi — 507 — deuce is governed by tlie general rules of evidence as to mere opinions, conclusions, motives, intentions, self-serving declarations, etc. An agent signing a bill or note as agent, but not showing any intent to bind the principal, except by the use of mere words of description, is personally liable. The decisions, however, of the various courts, upon the effect of instruments signed by the agent as such without more to show the intent to bind a given principal, and as to competency of evidence to show the intent of the parties, are so conflicting that the Supreme Court of the United States (in the cast of Falk v. Moebs, 127 U. S. 597, 8 Sup. Ct. 1319, 32 L. Ed. 266) says: “It amounts almost to anarchy of the authorities.”—See 1 Daniel on Negotiable Instruments, §§ 401, 408; Bigelow on Bills, p. 47; and the host of English and American authorities collected and reviewed in 4 English Ruling Cases, p. 278 et seq. “A promissory note which reads: ‘Four months after date we promise to pay to the order of George Moebs, Sec. & Treas., ten hundred sixty-one & 24/100 dollars, at Merchants’ & Manufacturers’ National Bank, value received . [Signed] Peninsular Cigar Co., Geo., Moebs, Sec.' & Treas.’ — and indorsed, ‘Geo. Moebs, Sec. & Treas.,’ is a note drawn by, payable to, and indorsed by the corporation, and without ambiguity in the indorsement ; and evidence is not admissible to show that it was not the intention of the indorser in making the indorsement to bind himself personally.”—Falk v. Moebs, supra, headnote. “In Keen v. Davis, 1 Zab. (21 N. J. Law) 683, 47 Am. Dec. 182, a bill of exchange of the following purport, addressed to William Thompson, Esq., Somerville, N. J., and indorsed, ‘The Elizabethtown & Somerville Railroad Company, by John Kean, President’: — 508 — ‘$500.00. Elizabethtown, Sept., 1841. Six months after date, please pay to the order of the Elizabeth-town & Somerville Railroad Company, five hundred dollars, value received, and charge as ordered. Your obed’t serv’t, John Kean, President Elizabethtown & Somerville R. R. Co.’ — was held to be ambiguous on its face, not clearly showing whether John Kean individually or the railroad company was the drawer, and proof was admitted, in the language of the court, ‘not to aid in the construction of the instrument, but to prove whose instrument it is.’ To the same effect, see Chadsey v. McCreery, 27 Ill. 253; Vater v. Lewis, 36 Ind. 288, 10 Am. Rep. 29; Hood v. Hallenbeck, 7 Hun (N. Y.) 362. Mechanics’ Bank v. Bank of Columbia, 5 Wheat. 326, 5 L. Ed. 100, is also claimed to be an authority in favor of the position taken by the plaintiffs in error. This was an action of assumpsit brought by the bank of Columbus against the Mechanics’ Bank of Alexandria on the following check: ‘NO'. 18. Mechanics’ Bank of Alexandria, June 25th, 1817. Cashier of the Bank of Columbia: Pay to the order of P. H. Minor, Esq., ten thousand dollars ($10,000.00). Wm. Patou, Jr.’ It was contended by the defendants that the check on its face was the individual check of Patón, and that evidence could not be received to show that it was in fact the check of the bank and signed by Patou as cashier. On the other hand, the plaintiffs contended that the check upon its face did not purport to the private check of Patón, but the check of the bank, drawn by him as cashier, and that the presumption was that it was an official act. The court, however, decided that the check was ambiguous upon its face; that the marks indicating it to be the check of the bank predominated; and that the only ground upon which it could be contended that the check was the pri — 509 — vate check of Patón was that it had. not below his name the initials for cashier. It was accordingly held that in such case testimony was admissible to explain the ambiguity and establish who was in fact the drawer of the check.”—Falk v. Moebs, supra. In the leading English case of Dutton v. Marsh, L. R. 6 Q. B. 361-365; s. c., 4 Eng. Rul. Cas. 278, it was decided that words of description, importing that the person signing the bill is an agent, without anything to show clearly that he makes himself liable in that character and not otherwise,” do not exempt that person from being charged as personally liable on the bill. “Lord Ellenborough says in Leadbitter v. Farrow, 5 M. & S. 345, 349, 17 R. R. 345, 348: “Is it not a universal rule that a man who puts his name to a bill of exchange thereby makes himself personally liable, unless he states upon the face of the bill that he subscribes it for another, or by procuration of another, which are words of exclusion?’ And, in all the cases in which the defendant has been held not liable, there has been some equivalent expression so as to exclude personal liability. On the other hand, the defendant has always been held liable, unless some such words of exclusion have been used, although it may be apparent on the face of the instrument that he is signing as a director or other officer of a company. Thus in Price v. Taylor, 5 H. & N. 540, 29 L. J. Ex. 331, the defendants were held liable, although they were described as the trustees and secretary of a building society.”—Dutton v. Marsh, supra. The same rules. are announced by Mr. Randolph (Com. Paper, vol 1, § 133 et seq.). The author (section 133) says: “The signer of a bill or note is no less liable individually because he adds the word ‘Agent’ to his name. And his individual liability is not affected — 510 — by his having ceased to be the agent before the maturity of the note, or by the fact of no demand having been made of the principal when disclosed. But it has been held, in New York, that a person signing a draft simply ‘A. B., Agent,’ and disclosing his principal to the payee,- cannot be held individually; and that a principal who has not been named in giving such a note in his business may be held, and may be shown by parol to be the principal, although not indicated by anything in the note but the signature ‘A. B., Agent.’ In like manner the mere addition of an official title, without naming or otherwise indicating, either in the signature or in the body of the instrument, the person or corporation in whose behalf the instrument is given, leaves the maker or drawer in general individually liable. Such words are ‘President,’ ‘Secretary.’ ‘Treasurer,’ ‘Trustee,’ ‘Supervisors.’ ” There was no evidence tending to prove any of the special pleas, except as to the capacity in which the parties signed. There was no evidence to show that the fertilizer was not tagged, branded, etc., as the pleas alleged. It was error, however, to allow tetimony that three sacks of the fertilizer were not tagged at a time long after the plaintiff had lost control of it. The plaintiff’s duty was wholly discharged in this respect if the fertilizer was tagged when it was sold to the defendants; it was not responsible for the losses of the tags thereafter. There was no attempt to prove that any of the sacks were not tagged when the plaintiff sold to the defendants and when the fertilizer Avas delivered on the cars at Talladega. The only proof offered on this subject was that three of the sacks had no tags when sold by the defendants to third persons, at Gun — 511 — tersville. If there had been any proof to show that the fertilizer was not so tagged when sold and delivered by the plaintiff, this evidence of the absence of tags at Guntersville might be admissible as corroborative of the evidence that it was not tagged when delivered at Talladega; but, standing alone as it did, it was not admissible as original evidence that tie goods were not tagged when sold by the plaintiff. If any original evidence had been subsequently introduced, it might have cured the error, by making the evidence admissible as corroborative; but no such evidence was ever offered, and the error was not cured. It was ruled in Kirby’s Case, 105 Ala. 529, 17 South. 38, that proof that- the sacks were tagged prior to the time of sale was not admissible; that the law required that they be tagged at the time of sale. For a stronger reason, it is not admissible to prove that it was not tagged long after the sale, and after it had been shipped and handled several times, and resold, by the original vendees. The object and purpose of the statutes was explained in the case of Steiner & Sons v. Ray, 81 Ala. 93, 1 South. 172, 5 Am. St. Rep. 332. It follows that the trial court erred to the injury of the plaintiff in allowing the defendant to prove conversations between themselves, in the absence of the plaintiff, or of any agent of the plaintiff, as to the capacity in which they intended to sign and did sign the note. These were self-serving declarations and were not admissible. Such statements might be admissible against the defendants, but not for them. A practice to admit such self-serving declarations would allow parties to make their evidence in advance and to preclude the other party to the contract without his knowledge or consent. — 512 — It follows that the judgment must be reversed, and the cause remanded. Reversed and remanded. Anderson, C. J., and McClellan and Gardner, JJ., concur.