142 Ga. 821 | Ga. | 1914
(After stating the foregoing facts.)
Counsel for the plaintiff contended, that there was no evidence that in fact an installment of interest was then overdue; that, if so, it was not a circumstance for submission to the jury, as bearing on the question of notice to the indorsee; that there was no evidence authorizing a finding for the defendants, and that the court should have stricken the evidence offered by the.defendants and have decided, as matter of law, that the plaintiff was entitled to recover.
We deem it unnecessary to trace at length the history of the English decisions on the subject of what facts would he sufficient to let in defenses of fraud or failure of consideration as against the indorsee of a note. Some of the eases arose in the effort to recover notes which had been lost or stolen; others, in suits upon notes or bills. In Gill v. Cubitt, 3 Barn. & Cress. 466 (10 E. C. L. 215), which was decided in 1824, where a bill of exchange was stolen during the night, and taken to the office of a discount broker, early in the following morning, by a person whose features were known, but whose name was unknown to the broker, who, being satisfied with the name of the acceptor, discounted the bill, according to his usual practice, without making any inquiry of the person who brought it, the Court of King’s Bench held, that, in an action on the bill by the broker against the acceptor, the jury were properly directed to find a verdict for the defendant, if they thought that the plaintiff had taken the bill under circumstances which ought to have excited the suspicion of a prudent and careful man; and, the jury having found for the defendant, the court refused to disturb the verdict. Abbott, C. J., Bayley, J., and Holroyd, J., each delivered an opinion. They declined to follow the statement made by Lord Kenyon in Lawson v. Weston, 4 Esp. 56. Bayley, J., after referring to certain previous cases, expressed the opinion that, as
Prom the English decisions two lines of decisions have grown up in America. Moreover, in different States of the United States more or less variant legislative acts have been adopted in regard
We will now consider the rule in this State and its development. In Matthews v. Poythress, 4 Ga. 287, decided in 1848, it was held, that the title of the purchaser of a negotiable bill, note, or other security transferable by delivery, who took it before due, bona fide, and for value, from one who himself had no title, was a good title; that such title was not defeated by the want of such caution in the purchase as a careful and prudent man would take of his own affairs, or by gross negligence; that it might be defeated by proof of mala fides in the purchase; that mala fides was notice, actual or constructive, of the fact that the security was not the property of the person who offered it, and a privity with or participation in a fraud upon the true owner; and that the want of proper caution, or gross negligence, or any fact that legitimately might go to show such notice, privity, or participation, might be submitted to the jury, subject to the direction of the court upon the law of the case. The first Code, which was adopted in 1860, but which did not go into effect until January 1, 1863, contained the following as section 2740: “Any circumstances which would place a prudent man upon his guard, in purchasing negotiable paper, shall be sufficient to constitute notice to a purchaser of such paper before it is due.” This was included in an article dealing with the rights of holders of negotiable instruments. The same action has been carried forward in the different Codes and appears in the Code of 1910 as section 4291. The first Code, that of 1895, and that of 1910 was each adopted by an act of the legislature, thus becoming statute law. Whatever may have been the discussion of the subject prior to such codification, the rule is now established in this State by legislation. It is made somewhat analogous to the equitable rule that notice sufficient to excite attention and put a
'In Merchants’ and Planters’ National Bank v. Trustees of the Masonic Hall, 62 Ga. 271, an action of trover was brought to recover certain negotiable bonds which were alleged to have been, wrongfully used by the treasurer of the trustees by depositing them as security for debts of a firm to which he belonged. It was held, that possession of a security negotiable by delivery before due is presumptive evidence of title thereto; but that when such security is proved to have been stolen ox otherwise appropriated in fraud of the rights of the owner, then the onus is upon the possessor to show that he took it bona fide and for value; and that upon his showing this, then the owner must show mala fides—that is, that the possessor had notice actual or constructive, of the title of the true owner. From the entire decision it appears that it was held that notice might be proved by circumstances as well as by direct evidence; and the trial court, on request, charged (p. 276), that “this notice must be actual or constructive; it must be based on circumstances which would place a prudent man on his guard in purchasing negotiable papers.”
In Hamilton v. Wilson, 67 Ga. 494, where a blank form was used in drawing a guano note, which contained a provision waiving the plea of worthlessness of the guano, but such provision was erased by a pen-scratch, in such manner, however, as to remain perfectly legible, it was held that this was a circumstance tending to show that the purchaser of the note was put on inquiry. Later statutes have been passed in regard to the inspection of fertilizers, but they do not destroy the effect of this ruling as to putting a purchaser on notice by circumstances. In the opinion of Jackson, C. J., it was said: “Our Code is explicit that any circumstances which would put a prudent man on his guard shall be sufficient to constitute notice to a purchaser before due.” The code section as then numbered was cited. In Roswell Mfg. Co. v. Hudson, 72 Ga. 24 (2), the rule was again distinctly declared. See also Love v. Lamar, 78 Ga. 323 (3 S. E. 90); Morrison v. Hart, 122 Ga. 660 (50 S. E. 471); Oliver v. Miller, 130 Ga. 72 (60 S. E. 254); Bank of Covington v. Cannon, 133 Ga. 779 (67 S. E. 83).
While the old statement that circumstances which ought to ex
It was argued by counsel for plaintiff in error that there was no evidence that the interest had not in fact been paid when due. But the plaintiff sought to recover interest on the note from its date, thus claiming that it was unpaid. It was further insisted that it was a question of law whether non-payment of the interest when dué would operate to dishonor the note and give notice to the indorsee. While the Code of this State (§ 4287) adopts the rule that if there be several notes constituting one transaction, but due at different times, the fact that one is overdue and unpaid will operate as notice to the purchaser of all, yet a provision in the body of the note for the payment of interest at stipulated times has never been treated as standing on the same footing as the maturity of the principal, relatively to the question of notice. Unless so provided by contract, non-payment of the interest does not mature the principal. The time for its payment remains unaffected. Failure to pay the interest may be shown, in connection-with other facts, in determining whether the circumstances were such as to put a prudent man upon his guard. Generally it is a question of fact as to what would be sufficient for that purpose. See, in this connection, Park v. Buxton, 10 Ga. App. 356 (73 S. E. 557). But if there is no evidence to support the finding that
From what has been said above, it follows that there was no error in admitting evidence as to the fraud perpetrated upon the makers of the note, or as to circumstances tending to charge the plaintiff with notice. Nor was there error in submitting the issue to the jury. There was some evidence from which the jury might have found that the horse was worth less than the amount which had been paid on the purchase-money, or-even less than the part of such payment which had been credited upon the note now in suit. Three notes were given for the balance of the purchase-price. Apparently the first which fell due had been transferred and collected by the transferee. The second was transferred, and is now in suit. Under the evidence, the jury were authorized to find that there was a failure of consideration, that the fraud practiced by filing the teeth of the horse was not discovered for a considerable length of time, and that the defendant owed nothing as a balance of purchase-price. The case, therefore, is different from that of Park v. Zellars, 139 Ga. 585 (77 S. E. 922).
Judgment affirmed.