Johnston v. Allen
Johnston v. Allen
Opinion of the Court
The Chief-Justice delivered the opinion of the court:
The appellees, R. T. P. Allen and Julia A. Allen, brought suit in the Circuit Court of Orange county against the appellant on a draft, of which the following is a copy:
“ Orlando, Aug. 12, 1881.
“ Mr. A. D. Johnston, Jr. At sight, pay to John M. Pearce two hundred and seventeen dollars.
A. D. Johnston, Sr.”
“ Accepted, Sept. 1st, 1881.
A. D. Johnston, Jr.”
The defendant filed a plea on equitable grounds, setting forth that the plaintiffs did not become possessed of said draft in the due course of trade, or for a valuable or legal consideration; that one Judson Sharpe in the year 1881 was in the employ of plaintiffs on board the steamer Mary Bell, plying on the Kissimmee river, and was charged by plaintiffs with being a defaulter in a large sum of money, and criminal proceedings were instituted or threatened against the said Sharpe, for the alleged embezzlement. Whereupon, the parties agreed to compound and compromise the said felony, and as a part of said compounding the said felony said Pearce deposited with the plaintiffs, among other things, the said draft, as collateral security to
On motion of plaintiffs’ counsel this plea was stricken by the court, and appellant assigns such action of the court as error.
There is no reason why this defence should have been set up in a plea on equitable grounds. There is nothing in it that would give a court of equity jurisdiction—if a bill had been filed for relief.
Whatever defence there was in it was available to the defendant by common law plea. This court, in the case of Spratt vs. Price, 18 Fla., 289, decided that when an equitable plea in a common law action consisted of matter which was a defence at law, that the court of its own motion should strike it out.
The appellant also assigns as error the sustaining of plaintiffs’ demurrer to his plea of payment. We think this was erroneous.
As the case must be reversed on this point, it is not improper that we should give our views for the guidance of the court in another trial of it. The draft was not a negotiable instrument. By the authorities the acceptor of such a paper had a legal right to pay the amount called for in it to the payee without demanding a delivery up to him of the draft, provided he had no notice that the payee had transferred the draft to a third person before demanding payment. Hart vs. Freeman, 42 Ala, 567 ; Story on Promissory Notes, sec. 106.
Such a payment would be a valid defence against the note, should it afterwards appear, and suit be brought on it
If Johnston had notice before or at the time of his alleged payment of the draft to Pearce, that Pearce had parted with the possession of it, either by transferring it absolutely, or by giving it to Sharpe to be used by him as collateral, his payment of it with this knowledge would not be a good defense, either as to an absolute transferee from Pearce, or the person who held it as collateral from Sharpe. The defendant says in his equitable plea that Pearce informed him that the draft was deposited as collateral and forbade his paying it unless it should be presented properly endorsed by him. If this be true, as to which we say nothing, it was a sufficient notice to him to deprive him of the right to pay the draft to Pearce, and Pearce having given the draft to Sharpe to be used as collateral could not afterwards prevent the payment of it to Sharpe’s transferee by forbidding the acceptor to pay it until he should endorse it. It would permit him, after agreeing to allow Sharpe to use the draft as collateral and delivering it to him for that purpose, and after Sharpe had passed it to another person in pursuance of such authority, to attach a condition to it, at the instance of his own will alone, which would nullify the whole transaction and opeí’ate as a fraud on the transferee from Sharpe.
The third assignment of error is that the court refused to permit evidence to go to the jury as to whether Pearce
Appellant also assigns as error the refusal of the court to give the fourth and fifth instructions asked. These instructions are as follows: “ Fourth, that the draft sued on is a non-negotiable instrument, and the defendant is entitled to defend against the plaintiffs, (not the payee,) in the same manner and on the same ground that he could against the payee, Pearce. That if they believe from the testimony that Johnston has paid the amount of the draft to Pearce in payment of the draft, they must find for the defendant.” “ Fifth, that even though Allen received the draft for a valuable consideration, the draft being a non-negotiable instrument, he took it subject to all the equities existing between Pearce and Johnston. That if, by reason of payment or off-set, Pearce could not recover by suit against Johnston, neither can Allen recover from Johnston. Hence, if the jury believes from the testimony, that Johnston has paid the draft to Pearce, Allen cannot recover, and they must find for the defendant.”
Both of these instructions were properly refused. They each asked the court to instruct the jury that they must find for the defendant, if Johnston, the acceptor, had paid the draft to Pearce. They put no limit to the time within which Pearce had a right to demand payment from John
This was as long as Pearce was the owner of the draft.. After that time, and when Pearce had transferred the-draft to Sharpe, and Sharpe had transferred it to plaintiffs, if Johnston had notice of such transfer, and paid it toPearce, it was unauthorized, and was not a payment, so far-as the plaintiffs are concerned.
The vital question is, “did Johnston, at the time he-paid the draft to Pearce, have notice that Pearee had transferred the draft to another person ?” Yet these instructions, ignore this question, and ask the court to charge that, be-, cause the paper was non-negotiable, that the acceptor had a right to pay it to the payee, regardless of the question as. to whether he knew that the payee had transferred it or-not. Supposing that the facts set up in the equitable plea, will be again brought before the Circuit Court in some-other form, it is not improper that we should state our views as to their validity as a defense to the action.
The law of contracts relating to the compounding a felony is laid down very clearly. “ In all cases of offences, which involve damages to an injured party, for which he may maintain an action, it is competent for him, notwithstanding they are also of a public nature, to compromise or settle his private damage any way he may think fit, but that an agreement for suppressing evidence, or for stifling or compounding a criminal prosecution for a felony, is void.” Chitty on Contracts, Vol. 2, p. 991. The mere fact that Sharpe was under arrest for embezzlement from, the plaintiffs would not vitiate or taint any agreement he-made with the plaintiffs for the payment of whatever sum, he might be indebted to them, unless in consideration of such agreement the plaintiffs were to abandon or suppress, the prosecution against him.
Judgment reversed and new trial granted.
Reference
- Full Case Name
- A. D. Johnston, Jr. v. R. T. P. Allen, and Julia A. Allen, his Wife
- Cited By
- 11 cases
- Status
- Published
- Syllabus
- 1. When a plea on equitable grounds consists of facts which are available to the defendant as a common law defence the court, on motion of plaintiffs, should strike out such equitable plea. 2. The acceptor of a draft—non-negotiable—may pay the same to the payee thereof, after its maturity, oven though the draft be not produced and delivered up to the acceptor at the time of payment, provided the acceptor has had no notice of the transfer of the draft by the payee to a third person, and such payment would be a valid defence against the note, should suit be brought thereon against the acceptor by another person. 3. If payment is made by the acceptor to the payee, and the draft be not delivered up at the time of payment, and suit is afterwards brought thereon against the acceptor by another holder claiming to be the transferee thereof, the 'burden of proof rests upon the plaintiff in the action—the defendant having proved the payment —to show that the defendant had notice of the transfer before the payment was made. 4. The sufficiency of the evidence to prove the facts relied on to constitute notice is a question for the jury. 5. In a suit by a transferee of a non-negotiable draft against the acceptor thereof, evidence of the existence, amount or nature of the indebtedness to such transferee, which was the consideration of such transfer, is immaterial and inadmissible. 6. A charge asked is properly refused which would instruct the jury that as the draft was not negotiable that a payment thereof to the payee by the acceptor after maturity without demanding a delivery np to him of the draft was a valid defence against a holder claiming to own the said draft, who had sued the acceptor thereon, unless such instruction limits the right of the acceptor to pay said draft to the payee prior to his being notified of the transfer thereof by the payeo to such holder. 7. Where a party under arrest for embezzlement gives a draft for the amount embezzled to the person from whom it was embezzled, such draft is not invalid unless it was agreed by tire parties that in consideration of giving said draft the prosecution should he suppressed. 8. Where a non-negotiable draft, valid in its inception, and on which the payee could have maintained an action against the acceptor, was loaned by the payee to a person under arrest for embezzlement, to enable him to compromise with the party who caused his arrest, and such draft is transferred to such party, who brings suit thereon against the acceptor, such acceptor cannot resist payment of the draft on the ground that it was transferred to the holder in consideration of his agreeing to suppress the prosecution of the person to whom it was’ loaned by the payee. 9. By our statute, Chap. 3241, February 25th, 1881, a person to whom a non-negotiable draft has been transferred by delivery thereof may maintain a suit thereon against the drawer or acceptor in his own name.