Bresee v. Crumpton

• Citation: 28 S.E. 351, 121 N.C. 122
• Case Date: November 23, 1897
• Court: United States State Supreme Court of North Carolina

28 S.E. 351
121 N.C. 122

BRESEE
v.
CRUMPTON.

Supreme Court of North Carolina.

Nov. 23, 1897.

Promissory Notes—Negotiability—Indorsement —Evidence—Notice — Bona Fide Holders — Rights —Actions —Parol Evidence—Insurance Agents.

1. The bare fact that the clerk of a general agent of an insurance company had indorsed the name of a local agent to various papers with the local agent's approval was no evidence of authority to indorse in his name a premium note made payable to the local agent, and sent by him to the general agent.

2. The transfer of a negotiable instrument payable to order does not pass the legal title, and hence the transferee is not a bona fide holder.

3. The transferee of a negotiable instrument payable to order may sue on the instrument, under Code_; § 177, providing for the prosecution of actions in the name of the real party in interest.

4. The conditions on which a note was given may be shown by the maker as against one not a bona fide holder.

5. The maker of an insurance premium note may show by parol, as against the payee, or one not a bona fide holder, that the note was given on condition that, if he preferred a policy for a smaller amount, after consulting his wife, the first policy and the note should be canceled; the condition being merely an additional agreement, and not a contradiction of the note.

6. A general insurance agent, to whom a local agent indorses a premium note, takes subject to the equities, since the note is the company's property, and the agent can stand in no better position than the company.

7. The negotiability of a note is not destroyed by the fact that it bears on its face the words and figures, "No. of Note, 2, 821. No. of Policy, 654, 971."

8. Where a note bearing the words and fig-

[28 S.E. 352]

vires, "No. of Note, 2, 821. No. of Policy, 654, 971, " was indorsed by a local insurance agent to the general agent, the latter was charged with notice that it was a premium note belonging to the company.

Appeal from superior court, Person county; Allen, Judge.

Suit by O. P. Bresee against R. W. Crumpton to recover on a note. From a judgment for defendant, plaintiff appeals. Affirmed.

W. W. Kitchin and A. L. Brooks, for appellant.

Boone & Bryant, for appellee.

CLARK, J. The note was indorsed to the plaintiff by the plaintiff's clerk signing the payee's name, and there was no evidence that such clerk had authority from the payee to make this indorsement. The bare fact that he had indorsed Parker's name to other papers with his approval, taken alone, was not evidence to submit to the jury of authority to indorse this paper, for there was no general authority shown, nor course of dealing from which it could be inferred. The plaintiff is, therefore, simply the holder of an unindorsed negotiable paper. As such, he has, prima facie, the equitable title, and can maintain an action thereon under Code, § 177. Carpenter v. Tucker, 98 N. C. 316, 3 S. E. 831; Kiff v. Weaver, 94 N. C. 274; Jackson v. Love, 82 N. C. 405. But such transfer without indorsement (except in cases where the note is made payable to bearer) does not pass the legal title (Jenkins v. Wilkinson, 113 N. C. 532, 18 S. E. 696), and the transferee, by not requiring the payee to indorse, is on notice, and "is not a bona fide holder for value, who takes the paper free from equities" (4 Am. & Eng. Enc. Law [2d Ed.] 250; Allum v. Perry, 68 Me. 23...