Bank v. Michael

• Decision Date: 12 April 1887
• Citation: 1 S.E. 855,96 N.C. 53
• Court: North Carolina Supreme Court
• Parties: FIRST NAT. BANK v. MICHAEL.

96 N.C. 53

1 S.E. 855

FIRST NAT. BANK

v.MICHAEL.

Supreme Court of North Carolina.

April 12, 1887.

Appeal from superior court, Rowan county.

W. C. Blackmer, for plaintiff.

D. G. Fowle, for defendant.

MERRIMON, J.

The plaintiff alleges in its complaint that it is the owner of a single bond duly indorsed by the obligee therein, whereof the following is a copy: “$750. Six months after date I promise to pay Chas. L. Heitman, or order, seven hundred and fifty dollars, for value received, with interest from date at eight per cent. per annum, payable annually until paid; it being the balance of the purchase money for one hundred and forty-three acres of land on Reedy Creek, in Davidson county, North Carolina, sold this day by said Charles L. Heitman to me, and for which I hold a bond for title from said Charles L. Heitman. Witness my hand and seal this twenty-sixth day of October, 1885.” (Signed, “P. W. MICHAEL,” and indorsed by Charles L. Heitman.) It is further alleged that no part of the money due upon this bond has been paid. Judgment is demanded for the same, etc.

The following is a copy of the material part of the answer of the defendant: “(7) For further answer, and as a defense to this action, defendant avers that on the twenty-sixth October, 1885, he executed the note referred to and mentioned in the complaint to C. L. Heitman, being the balance of purchase money for a tract of land; that on the thirtieth day of December, 1885, defendant paid to the said C. L. Heitman the principal and interest specified in said note, and took his receipt for the same on the following day, which receipt defendant will produce on the trial; that, upon the payment of the said note, one Alfred Wood, administrator of John Mosely, executed a deed for the land to this defendant; that, when the administrator of Mosely sold the land, Heitman became the purchaser, and assigned his bid to defendant, who thereupon executed his note to Heitman, and, upon the payment of the note, and at the request of the said Heitman, the said Alfred Wood, administrator as aforesaid, executed the deed for the land to the defendant.”

Upon issues submitted to them, the jury, at the trial, found by their verdict that the bond, a copy of which is set forth above, was deposited by Charles L. Heitman with the plaintiff as collateral security for a debt due from him to the plaintiff; that the defendant had never paid the same to the plaintiff; and that he paid the same to the said Heitman on the thirty-first day of December, 1885.

The following are the parts of the case stated on appeal material to be set forth here:

Plaintiff introduced as a witness J. H. Foust, cashier of the bank, who testified that on the twenty-eighth of October, 1885, one Charles L. Heitman discounted his note for $750 with plaintiff, and on the same date indorsed the Michael note to plaintiff as a collateral to secure his note; that the Heitman note was discounted on the strength of the collateral, and said Michael note has been in the constant and uninterrupted possession of plaintiff from October 25, 1885, until suit was brought thereon. The note executed by Michael was then introduced.

The defendant was next introduced as a witness, who testified that he paid the amount of the note in full to Heitman on the thirty-first of December, 1885, and took his receipt for the same; that Heitman told him the note had been misplaced. The receipt was as follows: “Received of Philip W. Michael full payment of a note for seven hundred and fifty dollars given by him to me on October 25, 1885, to secure the balance of the purchase, money for 143 acres of land, known as the ‘Purcell Tract,’ which note is lost or misplaced, and which is to be delivered to said Philip W. Michael when found. This thirty-first December, 1885.” (Signed by “Chas. L. Heitman.“)

Plaintiff insisted that the note executed by Michael was a negotiable instrument, and that the bank was a bona fide holder for a valid and valuable consideration, that is, was acquired in the usual course of business; that no equity existed between the defendant, Michael, and Heitman until December 31, 1885, while plaintiff became the owner of, and Heitman parted with his interest in, the note on October 28, 1885. Plaintiff further insisted the answer of defendant admitted that Heitman had conveyed to him the land for which the note was given.

Defendant contended that the note was not a negotiable instrument, and that the plaintiff took the same with notice of defendant's equity, since the note expressed upon its face that it was given for land for which the defendant had a bond for title from Heitman; that sufficient...