382 F.2d 290 (5th Cir. 1967), 22996, Billingsley v. Mackay

Docket Nº:22996.
Citation:382 F.2d 290
Party Name:Henry E. BILLINGSLEY, Appellant, v. Richard L. MACKAY, Appellee.
Case Date:July 05, 1967
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit

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382 F.2d 290 (5th Cir. 1967)

Henry E. BILLINGSLEY, Appellant,


Richard L. MACKAY, Appellee.

No. 22996.

United States Court of Appeals, Fifth Circuit.

July 5, 1967

Rehearing Denied Aug. 4, 1967.

Sol Goodell, Dallas, Tex., for appellant, Thompson, Knight, Simmons & Bullion, Dallas, Tex., of counsel.

Philip I. Palmer, Jr., Dallas, Tex., for appellee, Palmer, Green, Palmer & Gilmore, Dallas, Tex., of counsel.

Before JONES and COLEMAN, Circuit Judges, and HEEBE, District Judge.


The appellant, Henry E. Billingsley, sued the appellee, Richard L. Mackay, upon a promissory note for $15,000 given by Mackay to B. D. Fitzgerald from whom Billingsley purchased the note for $12,000. Federal jurisdiction is based upon diversity of citizenship. On a trial without a jury the district court rendered judgment for Mackay. The judgment is affirmed. Fitzgerald procured the note from Mackay through fraud. At the time Mackay

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gave the note to Fitzgerald he placed upon the back of it a notation which he asserted, as one of his defenses, put Billingsley under a duty to make inquiry and inquiry would have disclosed that the giving of the note was a conditional delivery. Mackay also contended, and the district court found that Billingsley had actual notice from Mackay that 'the validity of the note depended upon defendant's receiving' an assignment. This finding, in the light of the pleadings and the testimony, we regard as a finding that Billingsley had been informed that the delivery of the note was conditional. The evidence sustains the finding. Since the court found that there was actual notice, no necessity exists for considering the effect of the notation on the back of the note. Billingsley moved for a new trial for the purpose of bringing in another witness. The motion was denied. No error was committed by the denial of the motion.

The judgment of the district court is affirmed.

HEEBE, District Judge (dissenting):

I must respectfully dissent.

The maker of the note, defendant-appellee, never received the agree-upon consideration for the note, and thus raised the defense of failure of consideration against plaintiff-appellant's claim as holder of the note. This defense is valid only if plaintiff is not a holder in due course under §§ 52 and 56-58 of the Negotiable Instruments Law, contained in Art. 5935...

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