Fleshman v. BibbFleshman v. Bibb
delivered the opinion of the court.
The judgment under review was obtained by W. C. Bibb upon two notes executed by W. D. Eleshman to the Compendium Company, Incorporatеd, or order, each dated May 30, 1912, and each endorsed as follows: “Eor value received, we hereby transfer and аssign to W. C. Bibb the within note without recourse. This 31st day of May, 1912. The Compendium Company, Inc.,, by J. L. Thompson, Pres.” It appears that one-hаlf of the consideration for this assignment was furnished by W. W. Smith, and that he was equally interested therein with Bibb.
The underlying grounds of all the defenses relied upon were fraud in the procurement .of the contract and failure of consideration; and the first contention of the plaintiff in error arises out of the refusal of the trial court to instruct the jury as follows: “If you shall believe from the evidence that W. W. Smith paid one-half of the purchase money for said notes, but that they were endorsed, not to him, but to W. C. Bibb, and you further believe that the notes were fraudulent, that is given because of false representation known to company’s agents to be so, or given for territory which was valueless, then as to said Smith interest in said notes you will find for the defendant, whether he had any actual knowledge of the fraud or not.”
The argument advanced to support these instructions is that, in view of Smith’s interest, Bibb could not become a holder in due course as to more than one-hаlf interest in the notes; that as Bibb took the assignment not as sole owner but in part for the benefit of another, he did not acquire the notes regularly and in due course, even as to his own half interest; and that, therefore, he took them only as chosеs in action subject to any defenses which would be good against the original payee.
There is nothing shown or claimed whiсh places Smith in any worse position than Bibb, or in any different position from him, with reference to the purchase of thesе notes, except the mere fact that the assignment is made solely to Bibb. Under this state of facts we have no hesitancy in deciding that Bibb was the holder in due course of the notes sued on, within the meaning of the act known as the “negotiable instruments lаw,” appearing as section 2841-a of the Code of 1904; that as such holder he had the right to maintain the action in his own name; and that no defense could be made in the case affecting Smith, except such as would also be good against Bibb. The statute referred to was intended to embody in one act all the statutory law of the State and all of the rules of the lаw merchant on the subject of negotiable instruments (American Bank v. McComb,
The next and only remaining assignment of error is based upon the action of the trial court in excluding from the jury, as it did, all of the defendant’s evidence on the ground that there was nothing in the ease showing or tending to show any defect in Bibb’s title to the notes.
In passing upon this assignment, we deem it unnecessary, for reasons which will presently become obvious, to set out the evidence at any great length. The notes in suit were given by Eleshmаn to the Compendium Company in consideration of the right to sell, as the sole agent of the company in specifiеd territory, certain form books for keeping farmers’ accounts. If it be conceded, as it may be for the purposes of this opinion, that the territory was sold and the notes procured upon representations which were false and frаudulent, the evidence, as we think, is nevertheless wholly insufficient to raise any question for the jury as to the good faith of the' defendant in error in his purchase of the notes. Prima facie his title was free from any taint of bad faith (Code, sec. 2841-a, 59), and nothing appears in the evidence which can be held to shift upon him the burden of proof.
The notes were sold the next day after their execution at a discount of twenty per cent.; they were made by parties who were perfectly solvent; they were sold, along with cеrtain other notes of the same date and amount to the same purchasers; the company was getting rid of all these notes preparatory to leaving the county at once; and the officer of the company who made thе sale to Bibb, though introduced to him by an agent whom Bibb knew well, was himself a stranger to Bibb. It is claimed that these facts, viewed with the further fаct that Bibb
“Those who execute negotiable paper and set it afloat are chargeable with a much higher degree of diligence and caution than those whо purchase such paper in due course of commercial transactions.” Vaughan v. Johnson,
In our view of the evidence, if the dеfendant in error can he said to have acted negligently or to have been affected by suspicious circumstances in taking the notes, this certainly is the most that.can he charged against him, and this, in the absence of proof of facts amounting to fraud on his part, is not sufficient to defeat his right of action. City Nat’l Bank v. Hundley,
There is no error in the judgment complained of,- and it will he affirmed.
Affirmed.