Opinion
6 Div. 367.
January 11, 1934.
Appeal from Circuit Court, Jefferson County, Bessemer Division; Gardner Goodwyn, Judge.
Action on promissory notes by O. D. Perkins against John Skates. From a judgment for plaintiff, defendant appeals.
Affirmed.
Plaintiff's replications 9 and 10 are as follows:
"9. That said defendant can take nothing thereunder for that after the execution of the notes herein sued on and after the plaintiff is alleged to have made the fraudulent representation set out therein, the defendant was notified by the First National Bank in Bessemer, in which bank the said notes had been placed by the plaintiff for collection, and that the plaintiff was demanding payment of the same, and that thereafter the plaintiff with full knowledge of such facts and with full knowledge that said alleged representations were fraudulent and untrue, acting solely on his own account, and not in behalf of or for the alleged partnership, which he well knew and now knows did not in fact exist, received and accepted one hundred one-two-three gum vending machines, with 2,500 balls of gum with each machine, which said gum sold at retail price at $12.50 per machine full, and placed the said machines, and sold the gum therein and received the proceeds from said sale of said gum and still retains the same. The plaintiff further avers that because of such acts of the defendant, he is now estopped to have any thing by said plea.
"10. That said defendant can take nothing thereunder for that at the time of the execution of said notes the plaintiff was and for a long time prior thereto had been employed by Joseph Barnett Company, a corporation, with its home office in Iowa, selling for the said company gum vending machines on a commission. That the plaintiff sold to the defendant for said company 100 1-2-3 gum vending machines for the sum of $2,400.00 and the defendant being unable to pay for the same the plaintiff agreed to loan him said sum, if the defendant would give to the plaintiff the notes herein sued on secured by a mortgage on certain land in Shelby County, Alabama, and a mortgage on the said gum vending machines. Plaintiff further avers that this was agreed to and said notes and mortgages were duly executed and delivered to him, and the plaintiff gave to the defendant a receipt for $2,400 for said machines; the plaintiff remitted to the company its part of the purchase price and retained the balance as his commission. The plaintiff further avers that in all of their dealings and negotiations they acted solely in their individual capacities and not for or in behalf of any alleged partnership, which alleged partnership did not exist at that time and never has existed. The plaintiff further avers that thereafter the said notes were placed in the First National Bank in Bessemer for collection by the plaintiff, and the said Bank thereupon notified the defendant that they held the same for collection and the plaintiff was demanding payment of the same. The plaintiff further avers that thereafter the defendant with full knowledge of such facts and the fact that the alleged fraudulent representations made by the plaintiff to him were untrue, acting solely on his own behalf and for his own benefit, and not for or on behalf of the alleged partnership which the defendant well knew did not in fact exist and never had existed received and accepted the said 100 1-2-3 gum vending machines, with 2,500 balls of gum with each machine and distributed and placed the machines in and about the City of Bessemer and in and over the County of Jefferson, Alabama, and sold the gum therein which sold at a retail price $12.50 per machine and received the proceeds therefrom and still retains the same, and is now estopped to avail himself of the matters alleged in said plea."
Defendant's rejoinder 5 is as follows:
"5. That at the time the defendant received and accepted the said machines and paid the freight charges thereon, placed same for service, sold the gum and kept the money received from such sale, that defendant had already executed twelve negotiable notes to plaintiff which were not all due and placed the notes here sued on being said negotiable notes the greater number not then due in the hands of plaintiff relying on the false and fraudulent statement made to him by plaintiff which is set out in pleas 6 and 9 of defendant, and defendant took possession of said machines and held them for his protection and was always ready, and willing to surrender same to plaintiff on the surrender by him to defendant of the notes here sued on and the mortgages given to secure said notes and defendant so notified the plaintiff of his willingness to surrender said machines before any suit was entered on the notes or for the possession of said machines."
L. Herbert Etheridge, of Bessemer, for appellant.
Counsel argues for error in rulings on the pleadings, citing Skates v. Perkins, 225 Ala. 33, 141 So. 687; Hayes v. Woodham, 145 Ala. 597, 40 So. 511; Rand v. Oxford, 34 Ala. 474; Dean v. Brown, 201 Ala. 465, 78 So. 966; Hafer v. Cole, 176 Ala. 242, 57 So. 757; Comer v. Franklin, 169 Ala. 573, 53 So. 797; 55 C. J. 1092.
Huey, Welch Stone, of Bessemer, for appellee.
Formal written contract controls all matters involved therein, and excludes any prior agreements relating to the same matters. Navco H. Co. v. M. G. N. R. Co., 214 Ala. 176, 106 So. 862; Hamilton F. Co. v. Brenard, 215 Ala. 187, 110 So. 153; Lost Creek Co. v. Hendon, 215 Ala. 212, 110 So. 308. The burden is on appellant to show that errors complained of were prejudicial. King v. Scott, 217 Ala. 511, 116 So. 681; Rule 45, Sup. Ct.; Henderson v. T. C. I. Co., 190 Ala. 126, 67 So. 414; Sovereign Camp, W. O. W., v. Ward, 201 Ala. 446, 78 So. 824.
The suit was on a series of promissory notes given by defendant to plaintiff.
This is the third appeal. Decisions on former appeals are Perkins v. Skates et al., 220 Ala. 216, 124 So. 514, and Skates v. Perkins, 225 Ala. 33, 141 So. 687.
The present appeal, as on last appeal, seeks to review rulings on pleadings.
There is no bill of exceptions.
The oral charge of the court, as well as given charges, appearing in the record, discloses the cause was tried on numerous pleas and special replications.
Among the pleas on which the cause was tried was plea 8, the same as plea 9 set out on former appeal ( 225 Ala. 33, 141 So. 687, 688). This plea sets up the facts showing the relation of the notes to the alleged unliquidated partnership between the parties.
Pleas 10 and 12 on present appeal present the same defense as plea 8, to the effect the notes were given for machines purchased for the use of the partnership, and not as defendant's contribution to the capital of the firm.
If not subject to demurrer for lack of certainty, failure to disclose in substance the transaction which would give them a status not imported by the notes themselves, it does not appear but that defendant had the full benefit of this defense under plea No. 8.
Besides the oral charge of the court on this issue, the court gave the following charge in writing for defendant: "The court charges you, gentlemen of the jury that if the defendant has reasonably satisfied you from the evidence that the notes here sued on were given for the purchase price of certain gum vending machines for a partnership then existing composed of plaintiff and defendant and did not constitute defendant's contribution to the partnership you cannot find a verdict against the defendant, unless the plaintiff has reasonably satisfied you from the evidence that defendant was not acting as a partner of said partnership when he paid the freight on the machines and exercised the other acts of dominion over them."
In the state of the record, no injury to defendant appears from sustaining demurrers to pleas 10 and 12, and we need not consider whether they were subject to the demurrer. Henderson v. Tennessee Coal, Iron Ry. Co., 190 Ala. 126, 67 So. 414.
Plea 6 on present appeal is the same as plea 6 set out on former appeal ( 225 Ala. 33, 141 So. 687, 688). Plea 9 on present appeal is a duplicate of plea 6. To these pleas plaintiff interposed replications 9 and 10. As will be seen by reference to the decision on the second appeal, supra, these replications meet the criticisms of replications 7 and 8 then before the court.
Clearly, if, with full knowledge that he was being called upon to pay the notes as per the terms of his written contract, which more fully appears from the decision on first appeal ( 220 Ala. 216, 124 So. 514), the defendant accepted the shipment, proceeded to devote same to his personal use and profit, abandoning and ignoring any partnership, he became liable for an individual purchase as per his written contract, including the notes he had given.
The demurrers to these replications were properly overruled.
Defendant filed rejoinders 1 to 5 to these replications to which demurrers were sustained. This ruling is assigned as error.
These rejoinders 1 to 4 seek to avoid liability, notwithstanding the facts set up in the replications, because he had outstanding negotiable notes which might pass into the hands of bona fide holders in due course. They show no offer to rescind, with readiness to surrender the property, putting the vendor in status quo at the same time the latter put him in like position.
Rejoinder No. 5 is that most insisted upon as being sufficient. It can hardly be said this rejoinder either traverses or avoids the allegations of the replications that defendant took possession of the machines and merchandise, devoted same to his personal use, selling the merchandise, keeping the proceeds, etc.
True, merely holding possession as bailee after offer to rescind, standing ready to surrender same, does not prevent an effective rescission. Hayes v. Woodham, 145 Ala. 597, 40 So. 511.
But it would seem needless to cite authority to the proposition that, even after notice of rescission, the holder could not proceed to use the machines as his own for individual profit, and make merchandise of the portion intended for that purpose, all for his own benefit, and still claim a rescission.
Construed most strongly against the pleader, it can hardly be said the defendant ever gave notice of a wish or purpose to rescind. It merely says defendant notified plaintiff of "his willingness to surrender said machines before suit was entered," etc. This shows no offer to surrender the entire property. For all that appears, defendant had sold and pocketed the proceeds of the merchandise before he ever notified plaintiff of a willingness to return the machines.
Without discussing other features of these rejoinders, we hold the demurrers thereto were properly sustained.
Affirmed.
ANDERSON, C. J., and GARDNER and FOSTER, JJ., concur.