155 Ga. 630 | Ga. | 1923
Lead Opinion
The executors of S. H. Sanders filed their petition against J. A. Ayers and J. W. Sanders, in which they sought to enjoin the collection or disposition by Ayers of certain notes given by J. W. Sanders to S. H. Sanders, and to require Ayers to account for money collected upon these notes. They alleged that their testator, being physically unable to attend to business, transferred to Ayers, his son-in-law, said notes for the purpose of their collection, Ayers agreeing to collect them and to turn over the proceeds thereof to said testator. At different times Ayers collected from the maker various sums of money on these notes, and subsequently took from the maker renewal notes, and Ayers holds the renewal notes and various sums collected on the original notes in trust for their testator. They have demanded from Ayers said renewal notes and the money collected on the original notes, and he refuses to deliver said notes to them or to account for the moneys collected from the maker on the original notes. Ayers is insolvent. Among other prayers, they prayed for an injunction restraining Ayers from disposing of said renewal notes. The original notes were payable to the order of S. H. Sanders, and each one was indorsed as follows: “For value received I hereby transfer the within'note to J. A. Ayers, without recourse on me. This Mch. 22, 1913. S. H. Sanders. Witness B. C. Thornton, N. P.” The trial judge held that the legal effect of these transfers could not be modified or explained by parol evidence, and that such evidence was not admissible to show that the transferee held said notes for collection and not as the absolute owner thereof. For this reason, the judge declined to grant an injunction; and error is assigned upon the above ruling, and upon this refusal to grant an injunction. The sole and narrow question in this case is this: Where the payee of a note, payable to himself or order, transfers the same by writing tó a titird person without recourse, and signs the transfer, can it be shown by parol, at the instance of the original payee or his executors, that such transfer was made for collection by the transferee for the use of the assignor, and not meant to vest in the assignee the absolute title to the note and its proceeds?
This rule of the common law was somewhat changed by the Code. This change was this: “ Blank indorsements of negotiable paper may always be explained between the parties themselves, or those taking with notice of dishonor or of the actual facts of such indorsements.” Civil Code (1910), § 5796. Now it is insisted that this section excludes the introduction of parol evidence to explain a full indorsement in all cases and under all circumstances. This is not the true construction of this section. It was not intended to exclude parol evidence to explain a full or a blank indorsement, where that was permissible by the common law. The purpose was to permit the explanation of blank indorsements, between the parties themselves, or those taking with notice of dishonor, or of the actual facts of the indorsements. This section lets in parol evidence where it was inadmissible by the common law. It .takes down one of the common-law bars against' parol evidence. The purpose of the section was not to erect a new bar against the use of- parol evidence, and to make it inadmissible wheré
So the trial judge erred in refusing to permit the plaintiffs to show by parol' evidence that the transfers of these notes by their testator were for collection for his benefit, and in refusing to grant the injunction prayed.
Judgment reversed.
Concurrence Opinion
It is not the law that the terms or effect of every written assignment of a negotiable promissory note may, as between the maker and the payee or persons taking with notice, be varied by parol merely because the written assignment by the payee is put on the back of the note. The contract of assignment, though written on the back of the note, -may be so complete as to convey to the transferee for his-own use an indefeasible title to the note, and in such instance parol evidence will not be admitted to vary the terms or effect of the contract of assignment. But the