Carter v. Haralson

• Decision Date: 14 December 1916
• Docket Number: 179.
• Citation: 91 S.E. 88,146 Ga. 282
• Parties: CARTER v. HARALSON.
• Court: Georgia Supreme Court

91 S.E. 88

146 Ga. 282

CARTER v. HARALSON.

No. 179.

Supreme Court of Georgia

December 14, 1916

Syllabus by the Court.

In an action upon a negotiable promissory note payable to the order of a corporation, a plea that the note was given for certain stock in the corporation, and that the defendant was induced to buy the stock by false statements as to the solvency of the corporation and the value of the stock, made by a named person who was not alleged to be the agent of the corporation making sale of the stock, was insufficient. The case differs on its facts from Bank of Lavonia v. Bush, 140 Ga 594, 79 S.E. 459.

When a suit is instituted by an alleged transferee of a negotiable promissory note against the maker, the defendant can inquire into the title of the plaintiff when "necessary for the protection of the defendant, or to let in the defense which he seeks to make." Civ. Code 1910, § 4290.

(a) Payment of a negotiable promissory note to a supposed transferee holding it by virtue of a forged indorsement will not protect the maker against payment to the true owner, and consequently the maker of such a note when sued by an alleged transferee may avail himself of the defense that the alleged transfer by the payee was not genuine. Bruce v. Neal Bank, 134 Ga. 364, 67 S.E. 819.

This was an action by Haralson as transferee against the maker and indorser of the note. It was alleged in paragraph 2 of the petition: "That said defendants are indebted to your petitioner as owner and holder before maturity of the note hereinafter described, * * * executed by said defendant L Carter, * * * payable to the order of said Southern Guarantee & Investment Company, and indorsed by said Southern Guarantee & Investment Company by C. M. Hitch, secretary and treasurer said note being now held and owned by your petitioner as aforesaid." The separate answer of the maker stated "Defendant denies the second paragraph of plaintiff's petition." Held:

(a) Construed in connection with the allegations of fact made in paragraph 2 of the petition, this answer was, in substance, a denial, among other things, of the genuineness of the alleged transfer.

Allegations in the eighth and ninth paragraphs of the answer to the effect that the existence of certain facts "at the date of the transfer" were sufficient to put the plaintiff on notice, etc., and that "the transfer of said note" was fraudulently made and without authority, etc., are not to be construed as so qualifying the...