67 S.E. 253 | N.C. | 1910
The facts are stated in the opinion of the Court. This action was brought to recover the amount of a note for $499.20, payable in fixed installments to the Equitable Manufacturing Company. There was written, on its back, an indorsement to the plaintiff, but there was no proof introduced by the plaintiff of the genuineness of the indorsement, the court ruling that the production of the note was sufficient to show that the plaintiff was its equitable owner, without any proof that the note had been indorsed in writing to it, as the plaintiff does not claim as an innocent purchaser or a holder in due *138 course. The note was originally signed by the Boddie-Perry Drug Company, by C. B. Avent, manager. The name of the Boddie-Perry Drug Company was changed to that of the Scroggin Drug Company, the defendant in this case, and the case must be considered with reference to the liability of the defendant to the plaintiff, as if the note had been signed in the name of the Scroggin Drug Company, by C. B. Avent, manager. The execution of the note by the defendant, or its (143) predecessor, was alleged in the complaint and denied in the answer. It was shown that the note had been presented for payment to the defendant, and that payment was refused. This was the substance of the plaintiff's testimony. The defendant moved to nonsuit the plaintiff; the motion was overruled, and the defendant excepted. The defendant thereupon introduced testimony for the purpose of showing that C. B. Avent was not authorized to execute the note in its behalf. The defendant was engaged in the drug business and the note was given in consideration of jewelry and a piano, either sold or consigned to the defendant. The contention of the defendant was, that as these were not articles used in the drug business, it was beyond the scope of the authority of C. B. Avent to execute a note for the same which would impose any liability upon it. We think, though, the evidence tends to show that C. B. Avent was the general manager of the defendant's business, that he was secretary and treasure of the company, and had full authority over and control of its affairs, and more especially it tended to show that the defendant, through its proper officers, had notice of the purchase of the piano and jewelry and failed to repudiate the alleged unauthorized act of Avent, even if it did not ratify the same, with full knowledge of the facts.
As the plaintiff did not allege that it was an innocent holder of the note, but only the equitable owner, it can recover against the maker without showing a written indorsement, and, therefore, the ruling of the court, as to the proof of the indorsement, becomes immaterial. Having produced the note, the plaintiff was entitled to recover upon it as the holder thereof, subject to any defenses which the maker had against the Equitable Manufacturing Company, the original payee. Tyson v. Joyner,
It is now contended by the defendant that the doctrine which permits the plaintiff to recover upon his equitable ownership of a note, by the production of it at the trial, which is prima facie proof of his ownership, nothing else appearing, applies only to negotiable instruments, and counsel cite Gregg v. Mallett,
In Trust Company v. Bank,
But the other question now under consideration is considered in 1 Daniel Neg. Instr. (5 Ed.), sec. 574, and that able and learned text-writer states the principle thus: "When, however, a bill or note unindorsed by the payee, or indorsed by the payee specially and unindorsed by his indorsee, is in the possession of another person, the question whether or not its bare possession is evidence of his right to demand payment is of a different character. Without the indorsement of the payee or special indorsee, such possession would clearly not entitle the holder to the privileges of a bonafide holder for value, as, at best, he would only hold the equitable title to the instrument, and could not sue at law upon it as a ground of action." Referring to this extract from the treatise of Mr. Daniel, we said, inTyson v. Joyner, supra, at page 73: "The signature of indorsers, where indorsement is required to vest the legal title, must be proved. Norton on Bills and Notes, 331. In the case of an assignment of a bill or note, which transfers only the equitable ownership, as distinguished from an indorsement according to the law-merchant, which transfers the legal title, the equitable owner being the party in interest may now sue in his own name (Code, sec. 177), and he may recover subject to prior equities. Spencer v.Tapscott and Breese v. Crumpton, supra. When it is said in the cases that `there is a prima facie presumption of law in favor of every holder of negotiable paper to the extent that he is the owner of it, that he took it for value and before dishonor and in the regular course of business,' it will be found that reference is made to a holder by indorsement or to an instrument which, under the law-merchant, was not required to be indorsed, but which was negotiable by delivery. The expression was used in Treadwellv. Blount,
As to the authority of C. B. Avent to bind the drug company, it is very true, as argued by defendant's counsel, that where a party deals with an agent with limited authority, he must ascertain, at his peril, the extent of his power to act for his principal, and in some cases this doctrine may extend to what are sometimes called general agents, under certain *141
circumstances. Bank v. Hay,
We have examined Witz v. Gray,
No error.
Cited: Steinhilper v. Basnight,
(147)