ions of section 2094 of Code of 1876; second, whether the defendant is estopped by his conduct, shown by the evidence, from setting up against the plaintiff the defense of failure of consideration. Section 2094 declares: "Bills of exchange and promissory notes, payable in money at a bank or private banking-house, or a certain place of payment therein designated, are governed by the commercial law." The statute is an innovation of the common law, and should not be construed as infringing its rules and principles, further than is expressed or may be fairly implied, to give its terms full effect, and to accomplish its purpose. At common law, sealing was an essential and distinctive requirement to constitute a bond; and, under the mercantile law, sealing an instrument, though otherwise corresponding in form, deprived it of the character of a promissory note. Though an instrument under seal for the payment of money, without condition, at a specified time, is sometimes designated as a note under seal, there is a well-defined distinction between such instrument and a promissory note. Early after the Code of 1852 took effect it was said substantially that the distinction between sealed and unsealed instruments is not altogether destroyed by the Code. In Reed v. Scott, 30 Ala. 640, the complaint described the instrument sued on as a promissory note. The instrument offered in evidence under the complaint was in form a promissory note, except that it was under seal. It is said: "A bond cannot, with strict legal propriety, be termed a promissory note, and they have always been distinguished in the incidents which attach to them. The instrument sued upon, being described as a promissory note, was not the instrument offered in evidence, because the latter is a bond." The same ruling was reaffirmed in McCrummen v. Campbell, 82 Ala. 566, 2 South. Rep. 482. The instrument

sued on, not being a promissory note in the legal sense of the term, is not exempted, by the provisions of section 2094, in the hands of the plaintiff, though he may have acquired it before maturity without notice, from defenses of the maker against the payee growing out of the original contract. Merritt v. Cole, 9 Hun, 98; Sayre v. Lucas, 2 Stew. (Ala.) 259.

The estoppel on which plaintiff relies is based on the following facts: The defendant gave Philpot & Co. a promissory note for $300, as the consideration price of the exclusive right to sell a certain patent in several counties in the state. A week or ten days after this note was given, Philpot, one of the payees, called on defendant, and told him that he was anxious to trade the note for a pair of mules, but that the owner of the mules would not trade for the note unless it was payable in bank, and contained a clause waiving exemptions of personal property, and requested defendant to take back the first note, and execute "a waiver note in bank." In order to accommodate Philpot, defendant executed the instrument sued on, and took up and destroyed the first note. Soon thereafter Philpot traded the instrument sued on to plaintiff for a pair of mules. An estoppel in pais, as generally defined, occurs when a party, by his acts, words, or silence, causes another to believe in the existence of a certain state of things, and such person, on the faith thereof, acts, or omits to act, or alters his previous condition. The doctrine rests on considerations of equity and good faith, of fair dealing. An owner of property, who is present, and knowing his claim and concealing it, passively causes another to purchase and part with his money, will not be allowed, because of the fraud and injustice, to assert afterwards his right against such purchaser. To create an estoppel by representation or suppression, ordinarily the representation must have been made, or the concealment committed, with knowledge of the material facts, and the other party must have been induced to act thereby with confidence in its truth. Leinkauff v. Munter, 76 Ala. 194. The special charge requested by plaintiff recites substantially the facts stated above, and concludes, by asserting the legal proposition, that on these facts, without more, the defendant is estopped from setting up a failure of consideration, if the payee thereupon traded the instrument to plaintiff for a pair of mules. The charge

omits from its hypothesis the essential elements that defendant had knowledge of the defense at the time, and that plaintiff was induced to purchase the note by such representation. All the facts stated in the charge may be true, and all the essential elements of an estoppel by conduct not be present. But the plaintiff also asked an affirmative charge, which brings the question whether, as matter of law, the undisputed facts estop the defendant from setting up a failure of consideration. It may be regarded as a settled rule that, when a note is purchased on the faith of a promise by the maker to pay it, the latter is estopped from asserting the invalidity of the note as between himself and the payee, whether on the ground of fraud in the original contract, or of subsequent failure in the consideration. Cloud v. Whiting, 38 Ala. 57. If the bond sued on had been made payable to the plaintiff with a view to its delivery to him, or the defendant had promised in any other manner to pay it, the case would have come under the influence of the rule established in the case last cited. Allen v. Maury, 66 Ala. 10. But the bond was made payable to Philpot & Co.,-a promise to them to pay it. It had no greater effect, as a promise to pay the plaintiff, than the first note would have had if he had traded for that. The plaintiff did not apply to defendant for a promise to pay, or for information as to any defenses. They had no personal interview. The instrument in writing being the only medium of communication between them, its terms must be looked to, and from them ascertained the character and extent of the declarations, admissions, and representations made by defendant. It is an acknowledgment of indebtedness, and a promise to pay to the order of the payees at the time specified. It has the same, and no other or greater, force than would have been accorded to the statements contained therein, if they had been directly communicated to plaintiff in answer to an inquiry before acquiring the note. Prickett v. Sibert, 75 Ala. 315. The bond, speaking by itself, constitutes an admission of indebtedness, and under the circumstances, a representation that there is no defense. A well-defined distinction exists between cases where one purchases a note on the faith of a promise of the maker to pay it and where it is purchased on the faith of a mere representation of the maker as to the defenses. When the maker is applied to for information by one intending to purchase a note, and represents that there is no defense, he will be precluded from setting up against the purchaser any defense which existed at that time, and was within his knowledge; but will not be estopped from making a defense, which subsequently arises out of the original contract, and was unknown to him at the time he made the statement. Clements v. Loggins, 2 Ala. 514; Maury v. Coleman, 24 Ala. 381; Cloud v. Whiting, supra. There is no evidence tending to show that the defendant knew of the defense now set up when he executed the instrument sued on. Moreover, it cannot be deduced, as a legal conclusion from the facts and circumstances, that the plaintiff regarded the execution of the bond as a promise to pay him, or as a representation that there was no defense against it. He merely required a paper payable at bank, and containing a waiver of exemptions, evidently supposing that, if so payable, all defenses of the maker against the payees would be cut off, and that the waiver would increase the security. These were the considerations which moved him to accept a transfer and assignment of the paper. The act of defendant in executing the instrument sued on in lieu of the first note does not, of itself, under the circumstances, estop him from setting up the defense of failure of consideration which subsequently arose out of the original contract, and was unknown to him at the time. The several motions to exclude evidence were properly overruled. It was competent for the defendant to show the consideration of the bond, and its total failure. Properly construed, the bill of exceptions does not show that the worthlessness of the machine was proved by the opinion of the witness, but that facts were shown which tended to establish its worthlessness. Affirmed.

MOSES et al. v. NOBLE.

(Supreme Court of Alabama. December 11, 1888.)

1. EQUITY-OPENING ACCOUNTS-SURCHARGING.

Plaintiff's intestate agreed to assume liability for certain advances to be made by defendant to her and her father, to enable her to carry on farming operations. At the close of the year a settlement was had, and a note and mortgage executed by her for the balance due, on which judgment was entered by consent. On a bill filed by intestate in her life time, in which she conceded liability for advances made according to the agreement, but sought to eliminate certain erroneous charges and usurious interest, the judgment was annulled, because of the fiduciary relation between intestate and her father. Held, that, in the absence of allegations and proof of intentional fraud by defendant, infecting the whole account, the account would not be opened, but leave would be given to surcharge and falsify.

2. PAYMENT-APPLICATION.

The bill charged that the intestate's father acted as her agent, but it appeared that the farming was conducted in her name because of his insolvency. Money drawn by him and used for his individual purposes, was charged to intestate, and crops grown by him on farms other than those covered by the agreement were delivered to defendant, and credited on the general account; the entire account being kept in intestate's name. Held, that intestate and her father occupied the relation of surety and principal, and that, in the absence of specific direction, payments should be applied to the discharge of items as they accrued, without reference to the fact that one item was better secured than another.

Appeal from chancery court, Montgomery county; THOMAS W. COLEMAN, Chancellor.

Bill by Benjamin F. Noble, administrator of Lucy B. Noble, to vacate judgment, and for account, etc. On a former appeal (81 Ala. 530, 1 South. Rep. 217) the equity of the bill was upheld, and the cause remanded for an order of reference. From the decretal order of reference defendants appeal.

Tompkins, London & Troy, for appellants. Gunter & Blakey and Watts & Son, for appellee.

CLOPTON, J On the former appeal (81 Ala. 530, 1 South. Rep. 217) it was held that the transactions mentioned in the bill, being between complainant's intestate, who was then unmarried, and her father, with whom she resided as a member of his family, are to be regarded as transactions between persons occupying a fiduciary relation to each other, and that pecuniary obligations assumed by her for his benefit will not be sustained unless the presumption of undue influence is rebutted; also that the defendants, who advanced money to the father on the daughter's credit, with knowledge of the facts, occupy no higher or better position then the father; and, it not being shown that she acted with full knowledge of the material facts, or on independent legal advice, complainant was entitled to relief. Because of the resultant hardship and the importance of the question, the case was carefully and maturely considered by each member of the court. On re-examination of the record, the majority find no reason to justify a departure from the conclusion then reached.

The other questions presented for consideration arise on the decretal order of reference made after the remandment of the cause, and relate to the nature and extent of the relief to which complainant is entitled on the pleadings and proof. The transactions mentioned extended through the years 1875 to 1879 inclusive, but a separate and distinct arrangement was made at the beginning of each year. The dealings originated in an agreement made March 3, 1875, between Mrs. Noble, complainant's intestate, then Miss Micou, and Moses Bros., by which she assumed liability for certain advances to be furnished by them to enable her to carry on certain planting operations; also advances for the support of her father, B. H. Micou, and his family, during the time of his attention to the business, and to pay necessary taxes and expenses, the advances not to exceed $500 per month. At the close of the year 1875, a settle

ment of the accounts for that year was made, and a balance of $13,460 ascertained to be due Moses Bros., for which Miss Micou executed, February 7, 1876, her note and a mortgage on real and personal property; and in March, 1877, a judgment was rendered against her on this note. When this case was last before us it was declared that the judgment should be annulled and set aside, the effect of which is to remit the parties to the note and mortgage. The bill, which was filed by complainant's intestate in her life-time, concedes her liability for all advances falling within the terms of her agreement, and does not controvert the correctness of the items. Its main object is to eliminate from the debit side of the account of 1875 certain alleged erroneous charges, and the usurious interest charged on the advances, the liability for which is admitted, and which entered into the note. In respect to the judgment, the special prayer of the bill is not that it be annulled in toto, but opened for the purpose of allowing all credits to which she is justly entitled, and contains an offer to pay whatever amount may be found to be due on an accounting. The bill does no allege any intentional fraud or undue advantage on the part of Moses Bros., and none is proved, which infects the items of advances coming within the terms of the agreement of March 3, 1875. In the absence of allegation or proof of fraud or undue advantage, which taints the entire account, the court will not open and unravel as if no accounting had been made. If a fiduciary relation exists between the parties, the transaction will be more jealously scrutinized, and the account opened on less proof, than when between parties who sustain to each other no relation of trust or confidence; but in such case the entire account must be so infected with fraud or undue influence that it would be inequitable to permit it to stand even in part. When only errors or mistakes are alleged and proved,-wrong charges which should be deducted, or omissions of credit which should be aliowed,—the court will give the party complaining permission to surcharge and falsify the account, and limit its authority to a correction of the errors or mistakes; for this accomplishes the ends of equity. Cowan v. Jones, 27 Ala. 317; Paulling v. Creagh, 54 Ala. 646. It is evident from the frame and prayer of the bill that its chief purpose is to surcharge and falsify the account. It was so regarded on the former appeal, and on this theory the relief, and extent of relief, in regard to the account of 1875, and the note and mortgage of February 7, 1876, was declared as follows: "We have declared above that Miss Micou, then Mrs. Noble, did not and does not by her bill claim or pray to be relieved of the entire liability incurred by her agreement of March 3, 1875, and by her mortgage of February 7, 1876. The purpose was to eliminate from the account the balance of $2,000 brought from the account of 1874, and charged to her at the beginning of 1875, with its interest; also the balance of Boykins' account for advances made for the Shorter place for 1875, charged to Miss Micou at the close of that year; also all items of the account from the beginning, which are not provided for in the agreement of March 3, 1875; and all interest and charges on moneys and other things advanced, loaned or forborne, over and above eight per cent. per annum. To this extent she is clearly entitled to relief, with this qualification." The qualification referred to will be hereafter mentioned. According to the principles of the opinion, permission is granted to complainant to surcharge and falsify the account, and on him rests the onus to show the erroneous charges complained of.

The qualification, to the extent of the relief, is that, if any part of the crop grown on the Shorter place in 1875 went to Miss Micou's credit with Moses Bros., or to her advantage in the continued cultivation of the plantations after that time, the credit of $5,012, deficit of the Boykin crop, must be reduced to that extent. The decretal order of reference so directs; but it further orders that if B. H. Micou drew and used money for his own purposes which was charged to complainant's intestate, and his own money not excecu ing the amount so used was received by Moses Bros., and by direction or con

sent of B. H. Micou was placed to the credit of complainant's intestate, such credit will be regarded as a repayment to her pro tanto, and will be to that extent a proper credit. In determining the equity of Miss Micou to such credit, the true relation which existed between herself and father is an important and controlling factor. The theory of the bill is that he acted as her agent, but the evidence clearly shows that the arrangement was to conduct the farming operations in her name because of her father's insolvency; to loan him her credit; and that they were so conducted for his benefit. Personal property was transferred to her, not to become her property, but to enable her to mortgage it to obtain advances for her father's benefit. The true relation, as between themselves, was that of principal and surety. B. H. Micou was the primary debtor, and the crops grown on the plantations were, in legal contemplation, his property. Her equity is no other or higher than the equity of a surety similarly circumstanced. This was the view taken of the true relation on the first, and conceded on the second, appeal. 74 Ala. 604. The advances made to B. H. Micou, and used for his individual purposes, were charged to Miss Micou; the entire account for all advances being kept in her name, and all payments made were credited on general account. There is no evidence that B. H. Micou directed that any payments should be applied to any particular items or part of the account. The appropriation of payments, therefore, should be made on equitable principles. Complainant's intestate denies her liability for advances drawn by B. H. Micou and used for his individual purposes, other than the support of his family. Her equity is to have all payments made with the personal property covered by her mortgage of March 3, 1875, and with her private means applied in discharge of her just liability. If the charges of such advances are eliminated from the account, and complainant's intestate receives credit therefor on the note of February 7, 1876, there remains no debt due her by B. H. Micou on account of moneys drawn and used for his individual purposes,, not contemplated by her agreement, to which such payments can be applied as a repayment, and she should not be allowed a credit on the account for payments made by her father with funds, other than her private funds, or the crop grown on the plantations cultivated in her name, or the other property covered by the mortgage, in the absence of special appropriation by B. H. Micou or Moses Bros. Under the circumstances, the general rule should be applied that when a general payment is made on a running account, with funds not covered by a mortgage or other lien, in the absence of application by the parties, and of other circumstances showing a different intention, it will be applied to the charges in the order of time in which they accrued, without reference to the fact that one item may be better secured than another. Harrison v. Johnston, 27 Ala. 445.

The bill prays that an account be stated between complainant's intestate and Moses Bros. of all dealings between them since the execution of the note and mortgage of February 7, 1876. On the same day on which the note and mortgage were made, complainant's intestate executed an obligation for the sum of $4,500 for advances to make a crop during the year 1876, and a mortgage on real and personal property to secure the same. Advances were made to a large amount during the year, and charged to her. The account was closed and balanced at the end of the year, and defendants assert no claim against complainant's intestate on account of the advances. At the beginning of each of the years 1877, 1878, obligations of a similar kind, though differing in amounts, and similar mortgages, were executed. The accounts for these two years were settled, April 28, 1879, by agreement by which Moses Bros. released complainant's intestate from all liability therefor, except for the advances made in 1879 up to the date of the agreement, being about $654, which sum was carried to a new account, and accepted, in satisfaction of the balance, B. H. Micou's individual note for $3,620. Miss Micou agreed to guaranty the interest on the note, and to pay the premiums on the life in