183 Ga. 809 | Ga. | 1937
The controlling question in the present case arises out of facts which may be briefly stated as follows: P. B. Latimer executed and delivered a promissory note for $555.48, payable to the order of Barron Electric Company, for an iron stoker. ” Barron Electric Company was a tralde-name used by J. B. Barron, and the name under which he did business. Barron Electric Company, by J. B. Barron, indorsed and transferred the note for value and before maturity to Peoples Loan & Finance Corporation. It was conceded on the trial of the case (a suit bjr Peoples Loan & Finance Corporation against P. B. Latimer as maker, and J. B. Barron doing business as Barron Electric Company) that the plaintiff was a "holder in
The question to be decided by this court is, can a transferee who is the holder in due course of a negotiable promissory note given to one operating under a trade-name which has not been registered as required by law, legally enforce its collection? In other words, was the decision of the Court of Appeals in accordance with the law? It being conceded in the trial that Peoples Loan & Finance Corporation was a holder in due course of the note in question, it is important to consider what constitutes a holder in due course. The Code, § 14-502, defines a holder in due course to be one who has taken the instrument under the fol
In the Code of 1910, § 4.386, with reference to holders of negotiable instruments, it is declared: “The bona fide holder for value of a bill, draft, or promissory note, or other negotiable instrument, who receives the same before it is due, and without notice of any defect or defense, shall be protected from any defense set up by the maker, acceptor, or indorser, except the following: 1. Non est factum. 3. Gambling, or immoral and illegal consideration. 3. Fraud in its procurement.” Section 3694 of the Code of 1895 contains the same language. Section 3785 of the Code of 1883 is in language identical with that of the Codes of 1895 and 1910. Under the law in force in 1895 and previously, on down to the adoption of the negotiable-instruments law in 1934, there will be found decisions by the Supreme Court, and by the Court of Appeals, not in harmony with the act adopted in 1934. Those decisions correctly interpreted the law as it existed at that time. But we are of the opinion that the law contained in the Code of 1910, § 4386, and in the Codes of 1883 and 1895, is no longer of force in so far as it applies to what is now meant by the expression “a holder in due course” of a negotiable instrument; except, of course, that the law declared in, the Code of 1933, § 14-333, as to “forged or unauthorized signature,” gives the same right of defense as was given under the old law providing for the defense of “non est factum.” When Michie’s Code of 1936 was compiled, the editors thereof marked § 4386 of the Code of 1910 “ Superseded,” and the editor added a note as follows: “This section is superseded by the provisions of the N. I. L. . . Section 4394(33) provides that a person whose signature has been forged or made without his authority is not liable, and such instrument is wholly inoperative as against him. . . It seems that the defenses of illegal consideration (gambling or immoral contracts) and fraud in the procurement are not good as against a bona fide holder for value without notice, these defenses being available only between other holders.” And while the statement in this note is not binding authority, it should be given consideration and due weight in passing
The Court of Appeals in deciding this case cited Padgett v. Silver Lake Park Corporation, 168 Ga. 759 (149 S. E. 180), Dunn & McCarthy Inc. v. Pinkston, 179 Ga. 31 (175 S. E. 4), and Mobley v. Bailey, 52 Ga. App. 578 (184 S. E. 417). But we are of the opinion that the principles of law enunciated in these decisions are not applicable to the instant case, for the reason that the right of a holder in due course was not involved in either instance. In the Padgett case the question was between the original parties to the contract declared on; and the same is true of the cases of Bunn ,& McCarthy Inc. and Mobley, where a very distinct and different principle was involved from that in the instant case, where the rights of a holder in due course of a negotiable promissory note are involved. In the cases cited by the Court of Appeals there were controversies between the original parties to the contracts declared on. '“The holder in due course of a note executed, without consideration, to a foreign corporation doing business in the State without having complied with the statutes, can recover against the maker, although the corporate payee could not.” Weir & Craig v. Bonus, 177 Ill. App. 626; Brannan’s Neg. Inst. Law (5th ed.), 28. From the same authority (page 557) the following is taken: “A statute declared that any contract made by or on behalf of a foreign corporation failing to comply
In Farmers & Merchants Bank of Cleveland v. Miller, 37 Ga. App. 668 (141 S. E. 419), the Court of Appeals made the following ruling: “Prior to the passage of what is known as the uniform negotiable-instruments law, the holder of a promissory note was not protected from the maker’s defense that the consideration thereof was immoral and illegal, even though the holder may have purchased the note before it was due, and without notice of any defect therein or defense thereto. Thus, a promissory note given
The defendant in the trial set up a defense that would have been available between him and the original payee. The statute says, however, that the holder in due course of a negotiable instrument holds the same free from such defense. The statute contains no language declaring that a negotiable promissory note given to a business conducted under a trade-name which has not been registered is void and unenforceable in the hands of a holder in due
Judgment reversed.