Commercial Bank v. Crenshaw

McCLELLAN, J.

This is an action of detinue-, prosecuted by Randall Crenshaw against the Commercial Bank of Selma, for the recovery in specie of a certain note and mortgage executed by said Crenshaw to the H. C. Keeble Co., and by said company assignbd and transferred to said bank for value before maturity. The note was executed January 21st, 1890, for $150, and payable October 15th, 1890, to £<H. C. Keeble Company at the Commercial Bank of Selma.” The mortgage, cotemporaneously executed, covered certain live stock and farming implements, a wagon &c., and all the crops grown &c., by the said Crenshaw on the J. L. Crenshaw place in Dallas county, Alabama, or on any other land in said county or State, and was conditioned for the payment of said' note and the other indebtedness thereafter to be incurred for plantation supplies. The mortgage contains also the following, among other stipulations : “And the undersigned does hereby covenant and agree to and with the said H. C. Keeble Co. as follows, namely : * * * * * * * * * * 2nd. That the undersigned will deliver all the cotton grown, raised, received or controlled by him during said,-year to the H. C. Keeble *501Co. at the said city of Selma as rapidly as the same can be prepared for market, the same to be sold by said corporation, as the agent and factor of the undersigned, at the usual commission 'of $1.00 per bale ; and the net proceeds thereof shall be applied to the payment of the debts and liabilities herein secured ; the same to be first applied, however, to any debts or liabilities of the undersigned arising out of the premises other than the debts evidenced by said note.” Crenshaw, having no notice of the transfer of this note and mortgage to the Commercial Bank, delivered cotton to the Keeble Co. of sufficient value to pay all except about eighteen dollars of his indebtedness; the cotton was sold by the company, as his agent and factor, and the net proceeds of sale credited to him on its books, but no part of such proceeds was paid to the bank on, or otherwise applied to. the payment of, said note, and the bank has never received any thing in that behalf. The Keeble Co. having failed, and plaintiff, then coming to a knowledge that his note and mortgage had been transferred, tendered the bank $18.44, as in payment of the balance conceived to be due from him on the note, and demanded that the papers be delivered to him. The tender and demand were refused, and he thereupon instituted this suit, and some days afterwards paid the sum of $18.44 into court. It is not controverted that the note and mortgage were at the same time assigned to the bank, nor that the papers were pinned together when delivered into the hands of the officials of the bank.

The important question presented for our consideration on this appeal manifestly is, as to the negotiability of the note executed by plaintiff to the Keeble Co., and assigned to the defendant. In determining this question tifo note and mortgage are to be construed and looked to as one instrument-, and the bank must be holden on the facts we have stated to a knowledge of every stipulation in the mortgage — and, among the rest, that quoted above — affecting or having reference to the note to all intents and purposes as if such stipulation had been embodied in the note itself. — 1 Rand. Com. Paper, § 197 ; 1 Dan. Neg. Instr., § 156 ; Chambers v. Marks, 93 Ala. 412.

Of course the mere fact that the note is secured by a mortgage exerts no influence upon the question of its commercial character. Leaving that circumstance out *502of view, the case presented in this connection is this : Crenshaw promises in a writing signed by him to pay the Keeble Co. $150 on October 15, 1890, at the Commercial Bank of Selma. Here are all the elements of a promissory note — a written promise to pay a named person a sum certain on a stated date and at a bank therein designated. — Code, § 1756. In this promissory note is embodied, however, a stipulation, which is not essential either to its efficacy as a promise to pay or to its negotiability, to the effect that the promissor will deliver all cotton produced or controlled by him to the payee as rapidly as the same can be prepared for market, to be sold by the latter as the agent and factor of the former on the usual factor’s commission, the net proceeds of such sales to be applied, by the agent or factor, of course, to the payment of the note. And the question recurs : Does this stipulation destroy the negotiability of the note, which without it is confessedly commercial paper in the -hands of the bank, in the sense of not being affected by any equities that might obtain between the original parties thereto? And the answer to this inquiry depends upon whether the additional stipulation introduces any element of uncertainty in the sum to be paid, or the time of payment, or the place at which payment is to be made. Yery clearly the absolute promise to pay the definite sum of one hundred and fifty dollars was in no wise affected by the superadded agreement as to the delivery and sale of cotton and application of the proceeds. It is most manifest that this specific sum was to be paid whether any cotton was delivered and sold or not. So far as the certainty of the amount is concerned, therefore, the special stipulation is entirely innocuous, and without effect upon the negotiability of the paper.

Is the requisite certainty as to the time of payment affected or eliminated from the contract by the additional stipulation? I think not. There is in truth and in fact but one stipulation entered into by the parties in this connection, and that is that payment should be made on the 15th day of October, 1890. This is the express provision of the note and there is, I undertake to say, nothing. in the mortgage to the contrary. And the sum then to be paid was the amount of the note in full. There is no intimation, no stipulation in the note or in the mortgage from which it can be inferred, or which affords any *503basis for an inference, that partial payments could, as a matter of right, be made at any time before October 15th, or that the holder of the note was under any duty to re-' ceive prior to that time anything short of full payment of it, or indeed that he was under any obligation to accept even full payment before the stipulated day. The stipulations in the mortgage that the payor is to deliver cotton to the Keeble Co., as factors and agents for sale on account of the payor on the usual commissions, and that the proceeds of such sales shall be applied to the payment of this note and other indebtedness of the payor, furnish no ground for a different conclusion. By the note, Crenshaw undertook and obligated himself absolutely to pay $150 to H. C.Keeble Co. on October 15th, 1890, at the Commercial Bank of Selma. The stipulations in the mortgage just stated were at most only an agreement that the proceeds of cotton delivered to Keeble Co. for sale on commission, and sold by the company as the payor’s agent, should be applied to the payment of this note according to its terms, that is, to the payment of $150 on October 15th, 1890, at the Commercial Bank of Selma. But even if it be conceded that the stipulations of the mortgage with reference to the application of the proceeds of cotton had any effect upon the time of payment set down in express terms in the note — for which concession I can find no warrant in the contract the parties have entered into — the utmost operation they could possible have in the premises would be to invest the payor with the right to pay-tlie amount before the day named, if the necessary funds should be sooner realized from the sales of cotton delivered by him to the Keeble Co. According this effect to the special agreement we have a contract to pay $150 on October 15th, with a right reserved in the payor to pay that sum before that time if the money necessary to that end, namely, $150, should arise or be acquired from a certain source. The authorities uniformly support the- proposition that such a stipulation does not affect the commercial character of an otherwise negotiable instrument. Thus, in Walker v. Woollen, 54 Ind. 164, s. c. 23 Amer. Rep. 639, the promise was in these words : “Six months after date, or before, if made out of the sale of Drake’s Horse Hay-Fork and Hay Carrier, I promise to pay James B. Drake or order,” &c. &c.; and it was held that this was an absolute promise to pay *504at a certain time, coupled, with a conditional promise to pay sooner upon the happening meantime of a certain event, which might or might not happen, and that this stipulation for earlier payment in a certain contingency did not destroy the negotiability of the note. The court said: “Such conditional promise embodied in a note containing an absolute promise to pay at a time specified does not destroy the negotiable qualities of the paper, or take it out of the operation of the law merchant.” The Supreme Court of Pennsylvania declared the same doctrine on a like stipulation, the promise being to pay twelve months after date, or before, if the amount of the note should be made out of the sale of a certain seeding machine. — Ernst v. Steckman, 74 Pa. St. 13, s. o. 15 Am. Rep. 542. And upon similar considerations, thelawhas come to be well settled that a note payable by its terms on or before a future day therein named, though the maker thereby is invested with the right to pay such a note at any time after its date, is yet, for all purposes of negotiation, to be regarded as payable solely on the day therein named. — Jordan v. Tate, 19 Ohio St. 586; Mattison v. Marks, 31 Mich. 421; Tiedeman Com. Paper, § 24. So, in Charlton v. Reed, 61 Iowa 166, s. c.47 Am. Rep. 808, a note payable twelve months after date, or before, if the money is received from a certain source, was held to be negotiable. And to the same effect are the following cases and texts : Capron v. Capron, 44 Vt. 410 ; Palmer v. Hummer, 15 Am. Rep. 353; Cota v. Buck, 7 Met. 588 ; Gardner v. Barger, 4 Heisk. 669 ; Cisne v. Chidester, 85 Ill. 523; McCarty v. Howell, 24 Ill. 341; 1 Rand. Com. Paper, § 112; 1 Dan. Neg. Instr., §§ 43, 44, 45.

This right to pay the note before October 15th out of the proceeds of cotton, conceding its existence for argument, does not involve a right to make partial payments on the note any more than there would be a right to make partial payments before maturity on a note payable absolutely on a specified day. The special agreement, granting its effect to be that Crenshaw could pay the note prior to October 15th with proceeds of cotton, would operate to mature the note, in the sense of giving him the right to discharge it, when the necessary funds from this source were in hand to pay it in full.

Not only so, not only is the contract of the parties, evidenced by the note and mortgage, without any stipu*505lation, express or implied, for partial payments, the law-being clear that without such stipulation no right exists to make partial payments, but there is an equal absence of stipulation, and all basis for inference of intention,that payment was to be made or might be made elsewhere than at the Commercial Bank of Selma. The promise in the note is to pay at that bank. There is nothing in the mortgage to the contrary. The instrument, indeed, itself recites that the note is payable at that place. If its further stipulations are to be taken to authorize payment before October 15th, which I deny, they are yet wholly barren of any stipulation, or the remotest intimation or implication, that there is any right existing in or duty resting upon Crenshaw to make payment at any other place whatever. Conceding his right to pay the note before October 15th, if the necessary funds should arise from the sales of cotton, that right was to make payment at the bank. On the concession mentioned, the note and mortgage were notice to all holders of the former with notice of the latter of Crenshaw’s right to so pay at that place prior to October 15th, in the contingency named, and it was, therefore, upon such holder to receive payment there made when so made in full of the note. And neither Crenshaw nor his agent, Keeble Co., would have been under any necessity or obligation to run down such holder and make even full payment to him. In the very nature of things payment elsewhere would have been in the teeth of the plain terms of the contract, could have been made only by mutual consent whereby those terms were in effect modified; and if made before maturity, whether in full or partially, would have been at the risk of Crenshaw, affording him no protection against the note in the hands of a purchaser with notice only of the stipulations of the note or mortgage. Of course a holder of contracts to pay money, whether they be negotiable instruments or not, may accept payment at any time or place, but neither has he the right to demand, nor has the payor the right to make, payment except at the time and place stipulated. The question here is not as to the place any holder might accept payment, but as to the place at which any such holder had the right to expect and demand payment, the place of presentation for payment and for non-payment, at which the paper might be protested. This place in *506this case was as certainly the Commercial Bank of Selma, under the language of the note with the mortgage stipulations, as by the terms of the note without these stipulations .

But it is insisted, that the rights and duties of the parties under these writings are to be determined by reference to the customs of the country in which the contract was made, common knowledge thereof and of the course of the seasons and habits of husbandry of the people. It is said that the court judicially knows that the cotton crop is harvested in the latitude of Perry county for the most part at least prior to October 15th ; that the mortgage requires the delivery of cotton as rapidly as it can be gotten ready for market; and that, therefore, it must have been the intention of the parties that this note should be paid off in instalments as cotton was received, at uncertain times before that date. Conceding the facts thus assumed to be within common knowledge, shall such knowledge of the customs and habits of a country, the course of the seasons and the maturity of crops, the supposition that contracting parties meant this or that because this or that would best fit in with the habits of the people, be looked to or indulged against the words they have used to express their meaning? Shall we take what they say, the plain terms they have expressly agreed upon, or some vague and shadowy idea evolved out of their surroundings as to what they meant, to reach, fix and declare their intention? The law is too well settled and too obviously supported by every just consideration obtaining in the premises, to require discussion or citation of authority to the establishment beyond cavil of the proposition, that a plain and unambiguous contract can not be controlled, varied, modified, construed or interpreted by reference to the customs, habits or surroundings of the contracting parties, whether such customs, habits and surroundings be within the judicial knowledge of courts, or be brought to their knowledge through the mouths of witnesses. But if this contract were ambiguous, I deny that deductions from common knowledge lead to the conclusion insisted upon as to the intention of the parties. It is manifest from the-mortgage that it was in contemplation of the parties that Crenshaw’s whole crop of cotton would be about five bales. He binds himself to deliver only five bales. *507He in fact did deliver only five bales. If it is common knowledge that the gathering of cotton commences some time before October 15th, it is also common knowlege that it is never completed in this latitude, rarely indeed half completed, prior to that time ; and it would, I think, be entirely safe to say that as a rule not one-half of a given crop is gathered, prepared for and put on the market as early as the middle of October. These parties recognized this. The mortgage contains no stipulation for the delivery of the cotton or any specific part of it by October 15th, but to the contrary, the mortgagee had until January 1st, to make the deliveries contracted for. Moreover, it is to be borne in mind, if we are to grovel in the labyrinths of judicial knowledge as to the seasons and customs of the country, that where cotton is delivered to a commission merchant or cotton factor for storage and sale for and on account of the producer, the delivery is not necessarily for immediate sale; but the factor, in the absence of special instructions, has a discretion as to the time of sale. Indeed, one of the chief reasons for his existence and employment is that, having the cotton ready for sale and delivery at any time, and being always in the market, he may hold it,' sometimes indeed for months, until an opportune moment, in the interest of his principal. It is also to be remembered that the secured debts were to be paid not in cotton, but in the proceeds of cotton, and the proceeds of the cotton first sold were to be applied to debts and liabilities of Crenshaw to Keeble Co. other than that evidenced by this note, which other debts, it is fair to presume the parties then contemplated, would amount to the sum actually incurred afterwards, which was something over one hundred dollars. How it can be inferred that parties intended that the whole of Crenshaw’s crop would be gathered, prepared for market, delivered to Keeble Co., and sold prior to October 15th. surpasses my comprehension. How it can be concluded that it was their purpose to pay this note and the debt of one hundred dollars out of the proceeds of the sale of say two bales of the cotton, which was all they had any reason to expect would have been delivered prior to October 15th, I can not conceive. That they expected to pay any part of the note before October 15th, the other indebtedness having to be first paid out of the cotton first delivered *508and sold, it is unreasonable to suppose. It is shoym in this case that the total proceeds of Crenshaw’s crop, the total proceeds of all the cotton he bound himself to deliver to Keeble Co., and of all the cotton he did deliver, were insufficient to pay this note after the application of a part of the proceeds to the other debt. To say, therefore, that it was the intention of the 'parties to pay off this note in instalments prior to October 15th out of the proceeds of cotton, when they had no reason to expect that any cotton would be received and sold before that time, the proceeds of which could be applied to this note, and when indeed the whole contemplated proceeds of cotton to be delivered up to January 1st were insufficient to pay off the other debt and the note, would be to arrive at an intention controlling and varying the express terms of a plain contract in a way and by a process a'nd upon data, which not only furnish all the illustration needed of the wisdom of the law in forbidding ambiguous contracts to be thus emasculated, but which also demonstrate the incorrectness and unsoundness of the conclusion as to the intentions of the party insisted upon, considered wholly apart from the terms they have set down as expressing their objects and purposes.

But it is said the Keeble Co. was by the same instrument both the factor and creditor of Crenshaw, and entitled in the latter capacity to the net proceeds of sales of cotton as soon as realized. This is the assumption of the point in issue. That Keeble Co. was not the creditor of Crenshaw in respect of the amount evidenced by the note after that had been transferred to the Commercial Bank seems to me to be too clear for discussion. That company was paid its debt in consideration of the transfer of the note. Thereafter the company had no claim on this note against Crenshaw, but the latter owed the amount of it to the bank, and the bank, not Keeble Co. at all, was entitled to receive from Crenshaw, or from his agent, the net proceeds of the sale, not indeed as realized, but at the maturity of the note whether that was, as I think, absolutely on October 15th, or, as I have conceded for the discussion, at such prior day as should find a sufficiency of the proceeds of cotton applicable to this debt in the hands of Crenshaw or his agent, Keeble Co., to pay the note in full. The mortgage in *509terms provides for and thus evidences that the parties contemplated an assignment of it and the note secured by it, and it would be anomalous to say that the assignment, when made as thus contemplated, in which event it is stipulated in effect that Crenshaw shall pay the secured sums to the assignee, was not to and did not constitute the relation of debtor and creditor between him and the assignee. There áre cases in which an assignment of the evidence of a debt does not deprive the payee of the right to make payment to the promisee, or rather more accurately, there are evidences of debt which can not be assigned at all so as to impose an obligation on the promissor to pay the . assignee. Thus a paper, otherwise negotiable, but containing an express condition that it should be given up to the maker as soon as the amount of it was received by the person to whom the promise was made, was held to be non-negotiable, the court saying : “The defendant by the terms of the note had a right to pay it in full at any time before maturity to the persons to whom it was made payable. Such payment to them would have been a good discharge of the contract, although it had passed over to a third person, if the promissor had no notice of such transfer. The stipulation or condition, therefore, was inconsistent with its unlimited negotiability, and takes away from the contract the essential feature of a promissory note. — Chitty on Bills, 134 et seq.” — Hubbard v. Mosely, 11 Gray 170, s. c. 71 Am. Dec. 698. And partly on the same principle, it is ruled that a written promise to pay A. B. a sum due to O. D. unless paid to O. D. by a day certain, and if paid to the latter the writing to be surrendered to the maker, is not commercial paper. — Chapman v. Wight, 79 Me. 595. But neither of these is the case at bar. Here there is no stipulation that the note is to be surrendered to Crenshaw when he shall pay the amount of it to Keeble Co. To the contrary, as we have seen, Crenshaw expressly undertook to pay any assignee of Keeble Co. Moreover, he executed a note having in itself all the requisites of commercial paper. He expressly agreed to pay a sura certain at a certain time and bank. Had the intention been that he was to pay only to Keeble Co., there would have been no sense in undertaking to pay at the bank. That provision is consonant only with a purpose to pay *510the note at that bank to the holder of it at maturity, whether the holder should be Keeble Co. or not. There is absolutely nothing in the special stipulations in the mortgage supposed to bear on this matter, which are at all inconsistent with this view, or afford any ground, in my opinion, for holding that any right was reserved by Crenshaw to pay to Keeble Co., regardless of the fact that the latter no longer held the paper.

I am miable to interpret the special stipulation otherwise than as creating the relation of principal and agent or factor between Crenshaw, on the one hand, and the Keeble Co., on the other, both in respect of the cotton to be, and which was, delivered and in respect of the net proceeds of the sales thereof. By the express terms of the agreement the Keeble Co. was to receive and sell 'the cotton as Crenshaw’s agent and factor, and not as his creditor. The sales being made as agent and factor, the proceeds necessarily came to the - hands of the company, and were held by it, not in its own right as creditor, for in respect of this note it had long ceased to be Crenshaw’s creditor, but in the right of Crenshaw and as his agent. Taking the matter at this point, we have money in the hands of the Keeble Co. held for and as the agent of Crenshaw. Then follows the agreement between the parties — between Crenshaw, the principal, and the Keeble Co., the agent — as to the disposition the agent shall make of the money to the effect that it shall be applied — by the agent necessarily and obviously, since the company no longer sustains any other relation to Crenshaw so far as the note is concerned, and in that capacity — to the debts secured by mortgage, first the advances, and afterwards the debt evidenced by the note. The delivery of the cotton was not a payment; it was delivered for the purposes of sale and was to be sold at the usual commission of one dollar per bale. The receipt of the net proceeds of sale by the agent was not intended to be and was not a payment. After such receipt the contract required that the proceeds should be applied to the debts, and such application alone constituted payment. The act of applying the proceeds to the debts, of payment thereof on the debts, was essentially the act of Crenshaw, whether intended to be performed and performed by his own hand or by the hand of the company; and this is equally true, and mani*511festly so, whether the debts were still due the company, or had been assigned to third parties. And, moreover, this act of application of proceeds, this duty resting on the company to pay the note out of the proceeds, could be as well performed, it was as appropriate to the agency, as much incumbent on an agent to perform it, by payment to any holder of the paper, the same having been assigned, as it would have been right and proper for the company, as agent, to credit such proceeds on the note, if it had continued to be the holder of it. This then, so far from being a reservation of the right to pay the Keeble Co. in any event, and thereby be entitled to a surrender of the note, whether then held by that company or not,' was in reality a renewed assurance of payment to any holder of the note ; and the special stipulation, thus importing only that the net proceeds of cotton should be applied by Crenshaw through his agent, the company, to the payment of the note at maturity did not, in my opinion, destroy the negotiability of the note. The bank took it with notice only of Crenshaw’s right to apply the cotton money to its satisfaction, and of the duty which the Keeble Co. was under to Crenshaw to so apply the same as his agent but it was no concern of the bank whether Crenshaw’s agent was faithful to its trust or not, and of no consequence to it whether the company applied the cotton proceeds as i't had agreed to do, other than would have been the case had there been no agency at all, and Crenshaw had stipulated for the application by his own hands of the net proceeds of the cotton to the note, in which case, obviously, Crenshaw’s failure to so apply such proceeds would in no wise have affected his absolute obligation to pay one hundred and fifty dollars to the holder of the paper on October 15th, 1890. Crenshaw should have seen to it that his agent pei'formed the agency. That the agent was unfaithful is his misfortune, the cause of whiclx lies with him rather than the bank. The latter havixig his unconditional promise to pay, with notice only of a right and duty on his part to pay out of the special fund, but to pay at all events out of some fund, was xxnder no obligation to notify him that it held the paper. To the contrary, in view- of the fact that he had sethis hand to andissxied a note which •-was in form negotiable, it had' a right to assume that he, knowing that the note was payable on a certain day at *512the Commercial Bank of Selma, would have funds there on that day to meet it.

This conclusion gains ' support when the futility or inutility of notice to Crenshaw is considered. The mortgage recites in the paragraph next succeeding that we have quoted, “that the H. C. Keeble Co. is engaged in the business of selling cotton on commission ; and the main purpose of the above advances is to promote that business by securing the sale of cotton.” The stipulation for the delivery of cotton to the company was in promotion of this commission business. Crenshaw had contracted to deliver cotton in consideration of advances, and to pay the company the usual commission of one dollar a bale for selling it. He had received the advances in consideration of which he had thus obligated himself. There is no intimation of a condition in this contract to the effect that it should not hold in the event the note in question was assigned. The fact that the note was assigned to the bank could not possibly have relieved him from the obligation to deliver the cotton to the company, nor have taken away the company’s right to sell it, receive the proceeds and charge for its services in that behalf. Of what avail, therefore, would notice of the transfer have been to him? None whatever that we can conceive of. With or without such notice he had no choice but to deliver the cotton-as he did do, and with or with-, out notice to him of the transfer, the company had precisely the same right to sell the cotton and receive the proceeds. A notice which involves no legal consequences can not be a notice which the law requires. Confessedly, if after notice of transfer he had delivered the cotton to the company and allowed it to receive the proceeds of sale, he would be liable to the bank for the face of the note. The whole case was tried below on the assumption of the correctness of that pxtoposition. Then how can the absence of such notice protect him froxxx liability, when had it been givexi him, he would still have rested under precisely the same duty and obligation as without it to deliver cotton to the company fox-sale axxd receipt of proceeds by it? Manifestly, I think, no x-ight or obligation of Crenshaw ixxvolved in this case depoixded on his knowledge of the transfer of the note to the Commercial Bank, and he is liable now oxx that note just as he woxxld be had he been fixlly advised of its transfer'from the moment it was made<

*513My own conclusion, therefore, is that the fact that Keeble Go. received the proceeds of Crenshaw’s cotton, which the latter intended to go in payment pro tanto of this note, is no defense.against the bank’s claim of the full amount of the note against Crenshaw, and of consequence the latter had no right to recover the note and mortgage in this action, not having paid or tendered the full amount to the bank. I believe this conclusion is not only that which alone is justified on the law and facts of the case, but tha,t the contrary view will lead to the most disastrous . consequences in the destruction of the negotiable quality of almost every promissory note the payment of which is secured by a mortgage. The court, however, is equally divided on the question, Chief Justice Bbjckell concurring in the foregoing* opinion, and Coleman and Head, JJ. taking a different view as shown in the opinion of Head, J.

The only other matter necessary to be considered arises on the sufficiency of the plaintiff’s replication (No. 7) to defendant’s 4th plea. The complaint claims “one mortgage and note executed by Randall Crenshaw [the plaintiff] to H. C. Keeble Company for the sum of one hundred and fifty dollars, and.due on, towit, October 15th, 1890, and dated January 22d, 1890; said mortgage being on one bay mule, one two horse wagon and two cows with the value of the' hire thereof,” &c., &c., without more. Defendant’s 4th plea alleged, inter aim,the purchase of said note for value before maturity by it, that the same was commercial paper being payable at a bank, and that said note has not been paid to the defendant. To this was replied facts which, according to the opinion of my associates, rendered the note non-negotiable, and further that the plaintiff prior to notice of transfer to defendant had paid, to the H. C. Keeble Co. one hundred, thirty-one and 56-100 dollars of the amount evidenced by the note, and “that plaintiff, as' soon as informed of the transfer and delivery of the note and mortgage to the defendant and before the commencement of this suit, tendered the defendant in legal tender of the United States eighteen and 44-100 dollars, which sum the plaintiff has paid the clerk of this honorable court, which sum together with the amount paid Ii.'C. Keeble Co. is the amount of said mortgage. ” This replication was filed June 12, 1891, a cousiderable time after *514the institution of the suit'. Defendant demurred to this replication on the ground — among others — that it appeared thereby that the money alleged to have been tendered was not paid into court at the time of complaint filed, but was so paid when the replication was interposed, a date long subsequent to the institution of the suit. The court overruled this demurrer ; and in so doing erred to the manifest prejudice of the defendant. The replication confesses that the plaintiff, conceding all he claims in other respects, owed the defendant a balance of $18.44 on the note and mortgage. Clearly until this sum was paid, or efficaciously tendered, the plaintiff could not demand the surrender of the note and mortgage, the evidence of his obligation to pay and the security for the enforcement of that obligation. The tender was made and refused. This entitles plaintiff to 'sue for the recovery of the papers provided he kept the tender good, so that at any time the defendant, upon surrendering the papers, could take what was confessedly due it upon them. The only way in which the tender could have'been kept good on and after the institution of suit was by the payment of the amount tendered to the clerk of the court at the time of -filing the complaint. This was not done. The plaintiff, therefore, had no title to the property he seeks to recover when the suit was instituted. The title, on- plaintiff’s own showing, was then in the defendant, and could not be divested for any purpose of this action by the subsequent attempt to make the tender good. — Frank v. Pickens, 69 Ala. 369 ; Nelson v. Loder, 132 N. Y. 288 ; Jones Chat. Mortgages, § 636 ; 2 Jones Mortgages, § 893 ; Pingrey on Chattel Mortgages, §§ 948 et seq. and 1135.

The judgment of the city court- must therefore be reversed. The cause is remanded.

Reversed and remanded.

Haralson, J., not sitting.