156 A. 707 | Pa. Super. Ct. | 1931
Argued March 11, 1931. Plaintiff Lycoming Trust Company claiming to be a holder in due course, brought suit against the maker of a $2,000 promissory note alleged to have been made by him to the order of Park Amusement Corporation, and bearing the following indorsements: "Park Amusement Corp., N.E. Watson, Treas.; James V. Bennett Co., by Sherman E. Bennett; West End Lbr. Supply Co., Inc., C.E. Updegraff, Pres." It alleged that it acquired the note from the last indorser before maturity for a valuable consideration. In his affidavit of defense defendant admitted the execution of the note and its delivery to the payee, but averred that the Park Amusement Corporation never indorsed and delivered, or authorized the indorsement and delivery of, the note to the James V. Bennett Company; that N.E. Watson, who indorsed and delivered the note to the latter company, had no authority to make the indorsement and delivery; that Sherman E. Bennett had no authority *186 to indorse and deliver the note to the West End Lumber and Supply Company; that C.E. Updegraff had no authority to indorse and deliver the note to plaintiff. He also averred want of consideration and fraud in the procurement of the note by the Park Amusement Corporation, and that plaintiff had knowledge of the fraud when it took the note.
At the trial counsel for plaintiff began the presentation of his case by offering the note in evidence. An objection to the offer was sustained on the ground that the note was not admissible in evidence until plaintiff proved that the indorsements on the note had been made by persons having authority to make them. The first assignment of error is to this ruling.
Where the action is by the payee against the maker of a note, the plaintiff, ordinarily, has only to produce the instrument and prove the signature of the maker. But where the plaintiff is an indorsee and has derived his title by means of some intermediate transfer, the steps of this transfer become to some extent material to be proved. See Greenleaf on Evidence, Vol. 2, 16th Ed., Sec. 163. In so deciding in McCormick v. Trotter, 10 S. R. 94, the Supreme Court said: "The bona fide holder of a note, payable to bearer, may recover on his possession, but where payable to order, he must prove the order, which can only be done by proving the endorsement by the payee. ..... Here, it was necessary to set out the indorsement, and to prove it; the averment of indorsement could not, as the court supposed, be stricken out without destroying the plaintiff's right of action. It was a material, necessary averment, the very foundation of the action, a necessary allegation, traversed by the defendant's plea of non-assumpsit, and without proof of which, the plaintiff had no standing in court." The rule in this State is in harmony with the general rule that where the genuineness of the indorsements through which plaintiff claims title are *187
properly put in issue, he must prove these indorsements. See 8 C.J. 999, 1010; Daniel on Negotiable Instruments, 6th Ed., Par. 812; Boles v. Harding,
Plaintiff offered to prove by its witness, N.E. Watson, who was treasurer of the Park Amusement Corporation, that it was the custom of the corporation in the prosecution of its commercial business to have its commercial paper indorsed by him as treasurer; that he indorsed the note as treasurer of the corporation; and that the corporation received the benefit of the note. The sustaining of objections to these offers is the subject of the second and third assignments of error. We think that the rulings were erroneous. Plaintiff had the right to show that Watson was the company's agent for indorsing commercial paper, and that the corporation received the benefit of the note. The evidence offered tended to prove that the corporation constituted its treasurer a general agent to make such indorsements; that it acquiesced in his acts in indorsing its commercial paper; and that it held him out to the public as having authority to do so. As stated in First National Bank v. Hotel Co.,
But it offered to prove by its witness, C.E. Updegraff, who was president of the West End Lumber and Supply Company, and indorsed the note for that corporation, that he had authority to indorse it; that it was his general custom to indorse notes for the corporation; and that the officials of the corporation had never raised any question as to his authority to do so. The sustaining of an objection to this offer is challenged by the fourth assignment of error. Little need be added to what we have said in discussing the second and third assignments, to show why this assignment must be sustained. If the president of the corporation *191
was in the habit of acting for the corporation with its knowledge and without objection in indorsing its commercial paper, actual authority might be inferred from such acts and the corporation would be bound by them. See Dougherty v. Hunter,
The fifth assignment is to the exclusion of plaintiff's offer to prove by the president of the plaintiff corporation at which the note was made payable, that it discounted the note for the West End Lumber and Supply Company, is the holder of the same, and that defendant did not pay on demand. That the evidence should have been received is so clear that no discussion is necessary.
The sixth assignment is to the exclusion of plaintiff's offer to prove, by the member of the partnership of Bennett Company who indorsed the note for the partnership, that the partnership received a benefit from the transaction and used the note for partnership purposes. The ruling was wrong. A partner may negotiate notes received by the firm in the course of its business with the firm name and may even confess judgment against the firm for the amount of a firm *192
debt: Boyd v. Thompson Coxe,
The seventh assignment complains of the direction of a verdict for defendant, and the eighth assignment is to the refusal of plaintiff's motion "to take off the non-suit." The trial judge seems to have regarded the directed verdict as an entry of a nonsuit, because his final order was that "the motion to lift the nonsuit is refused." The reasons for sustaining these assignments appear in our discussion of the others.
The judgment is reversed and a new trial awarded.