79 Tex. 185 | Tex. | 1890
Lead Opinion
This suit was brought by appellant, against appellee Wilson, to recover the amount of a promissory note payable to Walker Fore or bearer and to enforce a vendor’s lein upon a tract of land for the purchase money of which it had been given. Appellee Garrison intervened in the suit, claiming to be the owner of the note, and prayed judgment in his favor for the amount of the debt with a decree for the enforcement of the lien. He obtained a judgment in accordance with the prayer of his plea in intervention, and the plaintiff alone appeals.
The facts as shown by the testimony were that appellee Garrison became the owner of the note by transfer from the payee very soon after its execution, and that he delivered it before maturity to one Jacobson, under an agreement that if Jacobson could use it in making a certain improvement upon his residence he would pay Garrison. Jacobson died without having been able to make use of the note in accordance with the agreement. After his death, and after the maturity of the debt, the widow of Jacobson, who had then married a second time, joined by her husband, transferred the note to .the plaintiff for other notes, without notice of the agreement under which the intervenor delivered the possession to Jacobson.
The case of Weathered v. Smith, 9 Texas, 623, is very similar to the case before us. There the owner of a note payable to bearer had sent it to an agent to be presented to the legal representative of the maker, who was dead, for allowance by him and for approval by the Probate Court. It was allowed and approved, but the agent died. Subsequent to his death a third party got possession of the note and transferred it to the defendants for a valuable consideration. The true owner, Weathered, sued the defendants for" the possession of the note and was held entitled to recover. In the opinion Chief Justice Hemphill says: “ That the holder of a note transferable by delivery, or if payable to order endorsed in blank, . is prima facia its owner and holds it on valuable consideration, is a principle too xvell established to be questioned; and although the note may have come into the hands of a former holder by duress, fraud, theft, or finding, yet that does not defeat the right of a present holder, but only imposes upon him the necessity of proving that he holds -bona fide and for value. * * * This rule, in the latitude of its operation in favor of the actual holder, is subject to the important modification that the instrument must have come into his hands previous to its being due (Chitty on Bills; Story on Promissory Notes, section 210); otherxvise it is taken subject to all the equities betxveen antecedent parties. When acquired after overdue it is subject to all the objections affecting it in the hands of the party who first became wrongfully possessed of it or by whom it was tortiously transferred. And such is the rule in relation to the note which is the subject of this controversy. It was transferred after due. It is affected by objections against it in the hands of Abbott or other previous holder, and if recoverable from them is likexvise recoverable from the de
The judgment is affirmed.
Affirmed.
L. S. Schluter and J. L. Whittle, for appellant, filed a motion and an argument for a rehearing.
Rehearing
ON MOTION FOR REHEARING.
The earnest insistence of the counsel for appellant in his argument 6n the motion for a rehearing in this case, together with his commendable zeal and industry displayed by his citation of authorities, have induced us, out of abundance of caution, to give a more extended examination of the questions presented by the appeal.
The result of that examination has been to confirm our former opinion without modification.
We still think that the opinion in Weathered v. Smith, 9 Texas, 622, is decisive of the present case. The title to the note in controversy was directly involved in that case, and it was held that Smith, though a purchaser for value without notice of the plaintiff’s right, acquired no title as against the latter, because the note was transferred to him after maturity. The principle is that the transferee of overdue commercial paper gets no better title than that of his transferrer. The holder of such paper for value before maturity takes it discharged of every defense against it; but when dishonored it is, in respect to the title acquired by a subsequent holder, degraded to the rank of a personal chattel, the purchaser of which acquires only such title as the seller had. It was expressly so held in the case of Ashurst v. The Royal Bank, decided by the King’s Bench of England and reported at length in 2 Ames on Bills and Notes, 773. The same doctrine is announced in the following cases: Thomas v. Kinsey, 8 Ga., 421; Dans v. Bradley, 26 La. Ann., 555; Emmerson v. Crocker, 5 N. H., 159; Clarke v. Sigourney, 17 Conn., 571; Dow v. Halling, 4 Barn. & Cress., 330; Foley v. Smith, 6 Wall., 492. The same doctrine is recognized in National Bank v. Texas, 20 Wall., 72; Texas v. Hardenburg, 10 Wall., 68; Gordon v. Wansey, 21 Cal., 77. See also 1 Ameson Bills, 748, note, and cases cited; Teid. on Com. Paper, sec. 295, and notes. There are cases which hold that negotiable paper transferred for value after maturity is not subject to equities as against the transferee in favor of third, par ties, but we do not understand that by third parties are meant, however, intermediate holders. Hence we need neither affirm nor deny their correctness.
Counsel in argument claims that the opinion misconstrues the testimony as to the consideration paid by plaintiff for the note. The testimony of plaintiff was: i£I bought the note sued on from J. J. Seigal and wife, Theresa Seigal, and paid for it with other notes the sum of $550.” It is not clear whether he meant that he paid other notes amounting to $550 or that he paid that sum in money for the note in question and others. Counsel is probably correct in claiming that the latter is the true construction. But the construction is unimportant. In either view the plaintiff paid value, and the case was so treated in the former opinion.
The motion for a rehearing is overruled.
Motion refused.
