Boxell v. Bright Nat. Bank of Flora

• Decision Date: 31 March 1916
• Docket Number: No. 22811.,22811.
• Citation: 184 Ind. 631,112 N.E. 3
• Parties: BOXELL et al. v. BRIGHT NAT. BANK OF FLORA.
• Court: Indiana Supreme Court

184 Ind. 631

112 N.E. 3

BOXELL et al.

v.BRIGHT NAT. BANK OF FLORA.

No. 22811.

Supreme Court of Indiana.

Jan. 7, 1916.

Rehearing Denied March 31, 1916.

Appeal from Superior Court, Delaware County; Robert M. Van Atta, Judge.

Action by the Bright National Bank of Flora against Andrew J. Boxell and others. Judgment for plaintiff, and defendants appeal. Transferred from Appellate Court under Burns' Ann. St. 1914, § 1405. Reversed, with directions to grant new trial.Meade S. Hays, of Marion, and George H. Koons and George H. Koons, Jr., both of Muncie, for appellants. J. Earl Fouts, Joseph G. Leffler, Walter L. Ball, and A. E. Needham, all of Muncie, for appellee.

LAIRY, J.

This was an action brought by appellee to recover on a promissory note; the action being commenced before the Negotiable Instruments Law of 1913 (Acts 1913, p. 120) became effective. The complaint was in one paragraph, to which a general denial was filed, and also an affirmative answer in six paragraphs, the fourth of which was an answer in non est factum. The trial court sustained a demurrer addressed to the fifth and sixth paragraphs. The issues were closed by a reply in general denial and an affirmative reply addressed to the second and third paragraphs of answer. The issues thus formed were tried by a jury, which returned a verdict in favor of appellee, upon which verdict judgment was entered.

[1][2][3] The action of the trial court in sustaining the demurrer to the fifth paragraph of appellants' answer is the first alleged error presented for consideration. An intelligent consideration of this paragraph of answer requires a brief reference to the complaint to which it is addressed. The complaint shows that the note in suit was executed by appellants and was payable to one William M. Doty, who died within a few days after its execution, and that Minnie Doty was appointed administratrix of his estate. It further appears that Minnie Doty, as administratrix, procured an order of court to sell the note in suit, and that, in pursuance of such order, she did sell, assign, and deliver said note to appellee before the same was due. The complaint shows that the note was payable at a bank within this state, and that the transfer was made for a valuable consideration, but it does not allege that appellee at the time of the transfer had no notice of existing equities or defenses as between the original parties to the instrument. As the facts stated in the complaint do not show that appellee was a bona fide holder, appellants might plead in answer thereto any defense which would have been available against the original payee. An answer to such a complaint stating a defense of this character is sufficient without any averment that the holder of the note took it with notice of the defense. Where a defense of this kind is made, the burden is upon the holder of commercial paper to allege and prove that he is a bona fide holder; and, if he does not assume that burden in his complaint, he must do so by an affirmative reply. Johnson v. Harrison, 177 Ind. 240, 97 N. E. 930, 39 L. R. A. (N. S.) 1207.

[4][5] It seems to be conceded on appeal that the facts averred in the fifth paragraph of answer are sufficient to show a defense against the payee of the note. That being true, such facts are sufficient to constitute a defense against the holder under the allegations of the complaint in this case. However, the defense stated in the fifth paragraph of answer was the same as that stated in the third paragraph, which was held good. It is not reversible error to sustain a demurrer to a good paragraph of answer where the facts stated therein can be proved under another answer which is permitted to stand. Appellants in their reply brief contend that, in order to sustain the third paragraph of answer, they were required, not only to prove the defense stated therein, but also to prove that appellee, at the time it acquired the note, had notice of such defense, and that the fifth paragraph could have been established without proving that appellee had notice of the defense. This position cannot be sustained. Appellants were not required under either paragraph to offer any evidence to prove that appellee had notice of the defense, as the averments in both paragraphs on that subject were surplusage which need not be proved. The burden was upon appellee under its reply to prove facts showing that it was a bona fide holder of the note in suit. First National Bank v. Ruhl, 122 Ind. 279, 23 N. E. 766;Giberson v. Jolley, 120...