114 Kan. 903 | Kan. | 1923
The opinion of the court was delivered by
This was an action on the following negotiable promissory note:
“$250.00. . March 3, 1921.
“Six months after date, I promise to pay to the order of Producers Consolidated Oil Co. Two Hundred Fifty Dollars at Peoples State Bank; value received, with interest at 8 per cent per annum.
(Signed) “R. A. Greathouse.”
[Revenue stamps attached.]
Indorsed: “The Producers Consolidated Oil Co.
“R. R. Sibley, Pres.”
The plaintiff alleged that before maturity one M. C. Elmore had acquired it in due course from the payee, and that Elmore had sold, assigned and delivered it to plaintiff. Plaintiff also alleged ownership and that no part of it had been paid.
The defenses pleaded were no consideration, and that it was executed and delivered to payee’s agents for a coupon book entitling defendant to a certain quantity of oil and gasoline at a filling station to be erected in Garden City but which was never built; that the payee had become bankrupt, and that the payee’s agents agreed with plaintiff at the time the note was executed and delivered that if the oil station was not completed the note should be returned to the defendant. The answer further alleged:
“That said oil company through its officers and agents violated its said agreement with this defendant by negotiating said note, and in breach of faith with this defendant indorsed said note over to the plaintiff herein, all of which the plaintiff herein well knew when iff took'and received the said note from the said oil company. . . . That said plaintiff took the said note from the said oil company for the purpose of aiding and assisting the said company and its officers in defrauding this defendant out of the amount of said note, and defendant alleges that said plaintiff is not an innocent holder of said note in due course.”
The evidence clearly showed without dispute that shortly after the note was delivered and long before it was due it was negotiated to one M. C. Elmore, from whom the plaintiff acquired it. There was no evidence tending to question the regularity of the note’s ne
“It is the law that where commercial paper passes through the hands of an innocent holder, the assignee under him takes it free of all infirmities although he may himself be fully apprised of them. (Negotiable-instruments act, § 65, Gen. Stat. 1909, §5311; 1 Daniel on Negotiable Instruments, 6th ed., §803.)”
Appellant also argues, “We think the evidence tends to show that the appellee did not purchase this note at all from the said M. C. Elmore.” There was no issue on the question of ownership. Indeed the answer admitted the bank’s ownership, alleging that it took it with notice of its infirmities. But even if the bank was not the beneficial owner, it could maintain an action to recover, since it was in possession of the note and no issue of ownership was raised as in Bank v. Amend, 107 Kan. 25, 190 Pac. 739; id. 112 Kan. 515, 212 Pac. 116. Once a negotiable instrument has been set afloat in the channels of trade in due course, the maker is absolutely liable thereon, and it is immaterial to him to whom he is required to pay, so long as in paying he extinguishes his indebtedness evidenced by the note. (Gen. Stat. 1915, §§ 6578, 6585; Hardy v. National Bank, 56 Kan. 493, syl. ¶ 2, and citations, 43 Pac. 1125; Note in 50 L. R. A., n. s., 75 et seq.; 8 C. J. 466.)
It follows that an instructed verdict was proper and the judgment must.be affirmed.