Campbell v. Morgan

• Decision Date: 10 July 1900
• Citation: 36 S.E. 621,111 Ga. 200
• Parties: CAMPBELL v. MORGAN. MORGAN v. CAMPBELL.
• Court: Georgia Supreme Court

36 S.E. 621

111 Ga. 200

CAMPBELL v. MORGAN.

MORGAN v. CAMPBELL.

Supreme Court of Georgia

July 10, 1900

Syllabus by the Court.

1. When the payee of a negotiable promissory note sold it outright to another, the mere fact that the seller indorsed the paper did not place him in the attitude of a borrower of money from the purchaser; nor, as between the latter and the maker of the note, was the transaction usurious because the discount amounted to more than the maximum lawful rate of interest.

2. Even if a promissory note was usurious, yet, if this fact did not appear on its face, the maker, who induced another to sign the note as surety in ignorance of the usury, and in good faith believing that the payment of the note was secured by a bill of sale to personalty which the maker had executed, was estopped from setting up the usury in defense to an action of trover brought by the surety for the personalty after he had paid off the note and taken an assignment of the same and of the bill of sale.

3. Nor could the defendant, in such a case, for the purpose of defeating the plaintiff's action, set up as outstanding title a duly-recorded bill of sale which the defendant had executed to a third person after making the bill of sale relied on by the plaintiff, which was not so recorded.

Error from city court of Atlanta; A. E. Calhoun, Judge.

Action by J. A. Campbell against W. A. Morgan. From the judgment plaintiff brings error, and defendant assigns cross error. Affirmed on cross bill and reversed on main bill of exceptions.

Tompkins & Alston, for plaintiff in error.

John C Reed, for defendant in error.

LEWIS J.

Campbell brought bail trover against Morgan in the city court of Atlanta. The case was submitted to the judge upon substantially the following agreed statement of facts Hardaway held three notes dated August 16, 1897, signed by one Morgan, payable to the order of Hardaway,--one for $100 due 60 days after date; one for $100, due 90 days after date; one for $125, due 120 days after date. Hardaway applied to one Jackson for a loan, and offered him these notes made by Morgan, but Jackson refused to discount them. Hardaway than asked him if he would discount the notes in case they were indorse by Campbell, the plaintiff. Jackson agreed to do so. Campbell indorsed the notes, and Jackson let Hardaway have thereon $275. At the same time a bill of sale from Morgan to Jackson of the personal property herein involved was delivered to Jackson in order to secure the notes. Campbell, the plaintiff, did not know at what price the notes were sold, to whom they were sold, and did not know who held the same, until about the time the first note became due, when he was informed who held the notes, but not what had been paid for the same. Campbell called upon Morgan and asked him to pay each of said notes as they became due. Morgan told Campbell that he (Morgan) did not have the money to pay off the notes, and asked Campbell to pay the same; and, upon Campbell paying same, Morgan stated that he would pay back to Campbell the money so expended. In pursuance of this request of Morgan, Campbell paid to Jackson the sum of $325, the full face of the notes, without knowledge of what sum had been paid for the notes by Jackson. The three notes were introduced in evidence, indorsed on the back by "J. A. Campbell, Scty.," and transferred to J. A. Campbell by Jackson as follows: "Without recourse, this note is transferred to J. A. Campbell, for value received." The bill of sale was also introduced in evidence. It was made for the purpose of securing the payment of these notes, under section 1969 et seq. of the Code of 1882, and in accordance with the act of the legislature approved December 17, 1894. It was properly signed by Morgan, legally attested, and was filed for record on December 24, 1897, and recorded on January 3, 1898. On September 16, 1897, Jackson transferred to Campbell, in writing, the bill of sale. Jackson swore upon the trial that he took the notes which were secured by the bill of sale from Morgan to himself, and transferred by himself to Campbell, in the regular course of business,--discounted them as commercial paper, that they were represented to him as such; that he took the bill of sale, and upon payment of the notes by Campbell, the security, transferred the bill of sale to Campbell, the plaintiff in this case. Defendant then introduced R. P. Bush, who was surety upon defendant's bond in the bailtrover action. Bush testified that Morgan had executed to him a bill of sale upon the property described in the petition, and in the bond which he had signed, for a valuable consideration, and which was taken without notice of the outstanding title claimed by plaintiff in this case, and that his bill of sale was recorded prior to the date of recording the bill of sale under which Campbell, the plaintiff, claims. This evidence was objected to by plaintiff as being irrelevant and immaterial, in that the outstanding title could not be pleaded or shown by the defendant, Morgan, to defeat a bill of sale which he had previously executed, and in which bill of sale he had warranted the title to the property attempted to be sold or conveyed; that Morgan was estopped to defeat the title which he had conveyed in the bill of sale, which contained his warranty, and which had previously been introduced by the plaintiff in this cause, by showing an adverse title created by himself. This objection was overruled. The bill of sale from Morgan to Bush was then admitted in evidence. The court rendered a judgment deciding that the defendant, Morgan, could not set up the outstanding title of Bush in his defense, and that the defendant is estopped to plead usury as against Campbell, holding the notes; but he ruled that the evidence showed that the bill of sale under which plaintiff claimed was void for usury, and that the plaintiff could not bring this kind of action (that is, trover), as he had no title; and that his action therefore failed. Plaintiff in error in his bill of exceptions assigns error upon the admission of the evidence of Bush and of the bill of sale from Morgan to Bush, and also assigns as error the judgment of the court finding...