112 Va. 51 | Va. | 1911
delivered the opinion of the court.
The City National Bank of Roanoke, Va., gave notice of a motion for judgment against H. B. Hundley, T. N. Bar
The case presented by the record is as follows: It is conceded that as between the makers and the payees of the note in question there was fraud in its procurement which would defeat an action upon it as between the original parties. The City National Bank claims, however, that it was a holder in due course for value and without notice of any fraud or infirmity in the note. The circumstances attending its purchase by the City National Bank of Roanoke are given in the testimony of Taylor and Greer.
Taylor, who was a witness for the bank, says that one. Jerry Bunting came to the bank with a stranger, whom he introduced as T. J. McChesney; that McChesney then showed him this note for $800, together with two others for the same amount, made by the same parties, payable two and three years from date, respectively, saying that he had purchased them from Bauhaud Brothers and that he wished to sell them and would take $1,750; that McChesney left the notes with him that he might make investigation with respect to the parties to the notes, and said that he would call again the next morning; that Taylor did not know McChesney, but that he knew Bunting who introduced him very well; and that McChesney’s conduct was so fair that he had no suspicion whatever that anything was wrong. After McChesney left the office, he wrote to Mr. Greer,' cashier of the First National Bank of Martins-ville, Va., describing the notes and asking for information concerning them; that he also went out of his office and made inquiry of several residents of Roanoke who had
Greer says that in a conversation with Taylor over the ’phone in September, 1908, he told him that the notes were perfectly good, that any two or three of the signers were good for the amount, but that he did not wish to buy them at any price; that his impression was that he told Taylor that there were some irregularities about the notes and that he might have trouble in collecting them; they were
After the testimony was closed the plaintiff demurred to the evidence, the defendants joined therein, and the jury rendered the following verdict:
“Upon the plaintiff’s demurrer to the evidence, we, the jury, assess the plaintiff’s damages at $800.00 with lawful interest thereon from December 11, 1907, until paid, subject to a credit of $132.00 as of December 11, 1907, and further credit of $106.50 as of this date, subject to the opinion of the court upon said demurrer.”
And the circuit court gave judgment for the defendants, to which a writ of error was awarded.
In Frank & Adler v. Lilienfeld, 33 Gratt. 377, Judge Burks speaking for this court says: “To invalidate the title of the holder of a negotiable instrument, endorsed in blank, acquired in due course of trade, and before maturity, it is not sufficient to show circumstances in the acquisition of the note affecting the holder with mere suspicion, or that he was guilty of gross negligence; but it is necessary to show that he was guilty of fraud.”
Such was the established law of this State at the time the negotiable instruments act was adopted, which is in this respect merely declaratory of the law as it existed at the time of its passage. That act provides that a holder
Clause 56 of section 2841-a of the Code provides, that “To constitute notice of an infirmity in the instrument or defect in the title of the person negotiating the same, the person to whom it is negotiated must have had actual knowledge of the infirmity or defect or knowledge of such facts that his action in taking the instrument amounted to bad faith.”
In this case the note was acquired before it was due, for value. The purchaser having no reason to suspect any infirmity in the note made inquiry as to the solvency of the makers, and it will be observed that while Greer says, that he has the impression that in his telephone conversation with Taylor, “I told him that there were irregularities and he might have trouble in collecting the notes,” he also says, “but I may have confused this with my letter which I wrote him on that day,” and refers to the fact that they were joint notes and that such notes often give trouble because of the fact that some of the makers want you to wait for others to pay their proportion, and that he would make further inquiries and write in regard to them. Taylor, ascertaining that the makers of the notes were solvent, and being willing to suffer any inconvenience that might result from the fact that the makers were numerous, purchased the notes and paid the consideration before receiving a letter from Greer, which did not reach him until September 7, four days after the transaction was completed. We attach no importance to the fact that there were certain small credits upon the notes and that McChesney was not required to endorse them.
We are, therefore, of opinion that the judgment of the circuit court must be reversed, and this court will enter such judgment as the circuit court should have rendered.
Reversed.