101 Ga. 372 | Ga. | 1897
Suit was brought in the court below against Robert Whitfield and F. Haug upon a promissory note signed by them as joint makers. The court directed a verdict in favor of the plaintiff, and Haug brings the case here for review. As his codefendant filed no defense to the action, and is not a party to the present writ of error, we shall, for convenience, deal with the case as though the plaintiff in error was the only party defendant in the lower court.
Nor is there any merit in the objection that the paper which the plaintiff was allowed to introduce in evidence, upon proof that it was a correct copy of the lost original, showed only one credit, whereas “the allegations in the declaration admitted and allowed four credits.” A plaintiff may very properly admit more payments than are actually entered upon the instrument on which he brings his action. This apparently is what-was done in the present case; for, although the exhibit attached to the plaintiff’s petition showed only one credit, it was nevertheless, according to the undisputed evidence, a true and correct copy of the lost original. This copy was simply used as evidence to show the basis of the plaintiff’s cause of action; and the amount claimed and recovered was, not that which on the face of the instrument purported to be due, but only that which was sued for.
As a matter of course, if it be true that the legal title to the note was not in Hall at the time he instituted his action, this would constitute an insuperable obstacle to the prosecution of his suit, and the defendant’s motion should have been sustained. For one who is a mere stranger to the legal title, albeit he may have possession of the instrument upon which suit is brought, can not maintain an action thereon against the maker. Dalton City Co. v. Johnson, 57 Ga. 398. In the present case, however, it unequivocally appeared that the instrument sued on was expressly made payable “to order,” and was regularly endorsed to Hall; so he certainly can not be regarded as a stranger to the note. On the contrary, so far as the instrument itself furnishes evidence as to its ownership, title thereto passed into Hall and remained in him as the last endorsee, no endorsement by him to Mrs. Brake, or to any one else, appearing either upon the back or upon the face of the note. It is claimed, nevertheless, that Mrs. Brake became the holder of the legal title by reason of the assignment to her above mentioned.
Tested by the familiar and universally recognized rules of the law merchant, this contention is not well founded. The note being payable “to order,” mere delivery of it to Mrs.; Brake certainly would not pass the legal title. Nor would a mere assignment thereof, evidenced by another and entirely distinct instrument in writing, have that effect. For “where a bill or note payable to order’ is transferred without endorsement, the transferee does not acquire the legal, hut only the equitable title. ” 1 Dan. Neg. In. § 741. Endorsement is the only method by which the legal title to such an. instrument can he transferred. Ibid. § 664 a. True, it may be transferred without endorsement; “but in such case the asr signment is not in the usual course of business, in accordance with mercantile custom, only the equitable title passing to the assignee.” Ibid. § 729. And to the same effect, see 4 Am. & Eng. Enc. of Law (2d ed.), 255,257, citing numerous cases both English and American; Norton on Bills and Notes, 94,
We believe the rule which obtains in this State is strictly in accord with what is immediately above announced. The only
In the first place, if the second proposition announced therein be sound, that which follows would seem to be a palpable non sequitur, in so far as it is susceptible of the con
It is further to be observed that the section of our code with -which we are now dealing does not undertake to prescribe the manner in which choses in action “may be assigned so as to-vest the title,” its object, as has just been seen, being merely to declare generally, by way of correcting the evil in “the old law,” that they could be legally so assigned. The term “assigned,” in this connection, is used in the sense of “transferred.”’ Indeed, in its ordinary acceptation, the word “assign” means: “to transfer to another. It is the appropriate word for a trans
In order to bring about the desired change in “the old law,” the General Assembly might have provided in general terms that “the real party at interest” should have aright to maintain an action in his own name, regardless of the question whether the legal title was or was not in him. But this was not the “remedy” adopted. On the contrary, it was doubtless thought advisable not to disturb the time-honored rule that none save the holder of the legal title could prosecute his action; and to that end, it'was in effect provided that a regular assignment, in conformity to established custom, should operate to pass the legal title, and thus enable the assignee to maintain a suit in his own name. That this is true is evidenced by numerous decisions of this court giving effect to the legislative intent in adopting the section under discussion. Thus, in the recent case of Hartford Insurance Co. v. Amos, 98 Ga. 534,
All of the cases last above cited were decided prior to that of Adams v. Robinson, and as the decision in the latter case would seem to be in the very teeth of the law as previously announced, if any regard is to be paid to the principle upon which all of these former cases rest, there is at least strong reason for doubting whether Adams v. Robinson is to be considered authoritative. Certainly, the doctrine it lays down has not been followed, so far at least as it disregards the rule of law that none other than the holder of the legal title can bring
As the law in positive and unequivocal terms declares endorsement to be the method by which a transfer of the legal title to a promissory note payable “to order” shall be evidenced, it would seem that nothing short of strict compliance with this plain mandate can operate to effect such a result. Were realty sought to be transferred by a mere scratch of the pen, or in any less formal manner than the law prescribes, it would not for a moment be doubted that the legal title could not be •deemed to have passed, no matter what may have been the intention of the parties; the test being, not what the parties intended to do, but whether they have complied with the re•quirements of the law. Is there any good reason for assuming that, although the law is imperative in regard to the mode of transferring title to real property, it does not mean what it says when it in no less positive and unequivocal terms declares what shall be the- manner in which the legal title to a particular kind of personal property majr be transferred?
Although the reasoning employed in Adams v. Robinson seems anything but satisfactory, and conflicts with the views
It is to be observed that the defendant in this case, while contending that the legal title was in Mrs. Brake and not in Hall, did not undertake to urge, or even suggest, any defense against the former. This being so, and Hall, according to the terms of the instrument and the formal entries thereon, being the ostensible holder, his title to the note could not be inquired into. Civil Code, §3698; Atkins & Co. v. Cobb, 56 Ga. 88; Greer v. Woolfolk, 60 Ga. 623; Davis & Bro. v. Baker, 71 Ga. 33, 34. This rule evidently proceeds upon the theory that the instrument itself is to be looked to in determining the question of ownership; that. the maker will be fully protected in treating the holder and ostensible owner as the party to whom payment is due (if at all), and therefore is not concerned with the question as to who may be equitably entitled to the proceeds, as between such holder and third persons, unless some defense be shown which would be good as against the real party at interest.
Thus it will be seen that while there is not unanimity of opinion upon the question whether or not a bill or note on which grace is allowable, negotiated on the last day of grace, is taken subject to existing equities, etc., the entire current of authority is to the effect that the time for payment expressed on the face of such an instrument is not to be regarded as fixing the day upon which the same will become due, but that days
No proof whatever was offered as to the circumstances connected with the transfer of the note to Hall, nor was there any evidence showing that he had any knowledge or even an intimation that the note had been paid, or had any reason to suspect that Whitfield & Allen were not at liberty to negotiate it. Plainly, then, the defense set up by Haug was not made out; for, in the absence of proof showing that Hall had notice of the defendant’s true relation to the paper and of the fact that,
Although Whitfield & Allen may not have occupied the position of a bona fide holder for value, yet if Hall purchased the note from them in perfect good faith, he would be fully protected against the defense interposed by Haug. It can not be questioned that “one may be a bona fide holder, despite bad faith on the part of his endorser. ” 2 Am. & Eng. Enc. of Law (1st ed.), 390. Nor would the mere fact that Whitfield was a member of the firm having possession of the paper be notice to Hall that it had been paid. Indeed, it has been held that even though the maker himself may be in possession of a note before it has fallen due, this fact will not charge a purchaser with notice that it has been paid off and discharged. Mishler v. Reed & Henderson, 76 Pa. 76. And in that case, although it appeared that the note had been discounted at the instance of the maker himself and its proceeds placed to his credit, the plaintiffs were allowed to recover in a suit against one signing as endorser, notwithstanding the latter’s agreement with the maker was that the proceeds should be placed in bank to the credit of himself as endorser.
As a general rule, “payment before maturity is at the risk of the party making it, and constitutes no defense against a subsequent bona fide holder for value before maturity.” 3 Rand. Com. Paper, §1470. “Payment can only be made before maturity by consent of both debtor and creditor. And it can only be made with perfect safety at or after the maturity of the instrument, unless the payor receives it in his hands and cancels it; for a payment before maturity is not in the usual course of business; and should the bill or note afterward, and before maturity, reach the hands of a bona fide holder for value, without notice, such holder could enforce a second payment.” 2 Dan. Neg. In. § 1233. And to the same effect, see Paris v. Moe, 60 Ga. 90. Thus it will be seen how strictly are the rights of a bona fide purchaser guarded; and rightly so, for otherwise commercial paper could not possibly serve the great beneficial purpose for which it is intended.
Judgment affirmed.