139 F.2d 169 | 5th Cir. | 1943
United States brought suit to recover on a promissory note. On a hearing the court below, without a jury, found the issue in favor of defendants.
The important facts are without dispute. Prior to the 17th day of October, 1935, the Madison Paint Company, acting through its salesman Brown went to the home of defendants, R. M. Dobbins and wife, in Denton County, Texas, and entered into a contract to sell them certain roofing material and paint to be used on their dwelling and barn, and represented such material to be first-class roofing material and paint, and agreed to apply
Decision must turn on (1) whether the claim of the United States is or can be barred by the statute of limitations; (2) whether there was material alteration of the note, and if so, whether such alteration made the note unenforceable in the hands of a person not a party to the alteration, who derives his title from a holder in due course; and (3) whether the defense of failure of consideration is available in an action on a note brought by a third party who derives his title from a holder in due course.
The court below, upon the issues presented, entered judgment for defendants. The plaintiff appeals.
The United States is not subject to the statute of limitations in this suit to collect on the note in controversy. The fact that the statute of limitations had commenced to run before the United States acquired the note does not change the rule which rests upon public policy of protecting the revenues and property of the United States. Person v. United States, 8 Cir., 112 F.2d 1; United States v. First National Bank of Prague, 10 Cir., 124 F.2d 484; United States v. Thompson, 98 U.S. 486, 25 L.Ed. 194; United States v. Nashville, C. & St. L. R. Co., 118 U.S. 120, 6 S.Ct. 1006, 30 L.Ed. 81; United States v. Summerlin, Ancillary Administratrix, 310 U.S. 414, 60 S.Ct. 1019, 84 L.Ed. 1283; Davis, Director of Railroads, as agent of the United States, v. Corona Coal Co., 265 U.S. 219, 44 S.Ct. 552, 68 L.Ed. 987; Guaranty Trust Co. v. United States, 304 U.S. 126, 132, 58 S.Ct. 785, 82 L.Ed. 1224; United States v. Thomas, 5 Cir., 107 F.2d 765.
The United States paid value for the note, purchased it in due course and without notice. The equities of defendants may not prevail as against an innocent purchaser for value. Scotland County v. Hill, 132 U.S. 107, 10 S.Ct. 26, 33 L.Ed. 261; Cromwell v. Sac County, 96 U.S. 51, 24 L.Ed. 681; Section 58 of the Uniform Negotiable Instruments Law, Article 5935, Section 58 of Vernon’s Revised Civil Statutes; United States v. Summerlin, 310 U.S. 414, 416, 60 S.Ct. 1019, 84 L.Ed. 1283; Brannon, The Negotiable Instruments Law (6th Ed.) p. 707; Herman v. Gunter, 83 Tex. 66, 18 S.W. 428, 29 Am.St.Rep. 632;
The only change in the note complained of was that of the due date; otherwise it was in all respects correct. An instrument delivered with blanks not filled in is valid and effectual for all purposes in the hands of an innocent holder in due course, even though such blanks were not filled in accordance with instructions. United States v. Novsam Realty Corporation, 2 Cir., 125 F.2d 456; United States v. Hansett, 2 Cir., 120 F.2d 121; Glasscock v. First National Bank, 114 Tex. 207, 266 S.W. 393, 396, 36 A.L.R. 320; Curlee Clothing Company v. Wickliffe, 126 Tex. 573, 91 S.W.2d 677; Hollimon v. Karger, 30 Tex.Civ.App. 558, 71 S.W. 299.
The court erred in rendering a judgment for defendants. The judgment is reversed and the cause remanded for further proceedings in conformity herewith.
Reversed and remanded.