Commercial Credit Co. v. Summers

• Decision Date: 03 June 1929
• Docket Number: 27528
• Citation: 122 So. 541,154 Miss. 501
• Court: Mississippi Supreme Court
• Parties: COMMERCIAL CREDIT CO. v. SUMMERS

122 So. 541

154 Miss. 501

COMMERCIAL CREDIT CO. v. SUMMERS

No. 27528

Supreme Court of Mississippi

June 3, 1929

(Division B.)

1. BILLS AND NOTES. Sales. Defenses existing between original parties were not available against bona-fide purchaser acquiring note and conditional sale contract before maturity (Hemingway's Code 1917, sections 2634, 2636).

Where a buyer of an automobile gave a note for part of the purchase money thereof, payable to a person or order, and such note together with the conditional contract of sale reserving title for security of the purchase money, was transferred to a third person for value without notice, defenses existing between the buyer and the original seller, growing out of alleged defects in the automobile, were not available against the bona-fide purchaser, who had acquired the note before maturity for value.

2. BILLS AND NOTES. Sales. Instruction precluding recovery by bona-fide purchaser of note, if buyer had paid real value of secondhand automobile sold as new, held erroneous.

In such case it is error to give the defendant an instruction setting up that, if the jury believe the automobile was sold to the buyer as a new automobile, when in fact it was a secondhand and used automobile, to the extent that its value was greatly impaired, and that, if the buyer had paid the real value of the automobile, the jury would find for the defendant.

Division B

APPEAL from circuit court of Forrest county.

HON. R S. HALL, Judge.

Replevin action by the Commercial Credit Company against Dr. F. L. Summers. Judgment for defendant, and plaintiff appeals. Reversed and remanded.

Judgment reversed, and cause remanded.

Currie, Stevens & Currie, of Hattiesburg, for appellant.

Under the Negotiable Instrument Law, Hemingway's Code of 1917, sections 2634, 2636, where a buyer of an automobile gave a note for a part of the purchase money thereof, payable to a person or order, and such note, together with the conditional contract of sale reserving title for security of the purchase money, was transferred to a third person, for value without notice, defense existing between the buyer and the original seller, growing out of alleged defects in the automobile, were not available against a bona-fide purchaser, who had acquired the note before maturity for value.

Ex parte Bledsoe, 61 So. 812; Smith v. Ellis, 107 So. 669; Chicago Railway Equipment Co. v. Commercial National Bank of Chicago, 34 Law Ed. 349.

The rules applicable to admissibility of evidence in civil actions generally apply to actions of replevin.

34 Cyc. 1504, par. 1; Hightower et al. v. Henry, 37 So. 745; Porter Hardware Co. v. Peacock, 91 So. 856.

Currie & Currie and A. A. Hearst, all of Hattiesburg, for appellee.

Where even a promissory note, which is clearly a negotiable instrument contains a note or memorandum, either on its face or on the back of it, refers to some other instrument or contract, this itself destroys the negotiability of the note and an assignee of such a note stands in the shoes of the original payee on the note and takes it subject to all conditions of the contract referred to in the note. This is true when the contract referred to by memorandum on the note is a different instrument altogether from the note itself.

Klots Throwing Co. v. Manufacturer's Commercial Co., 30 L. R. A. (N. S.) 40, 103 C. C. A. 305, 179 F. 813; Northwestern Nat. Ins. Co. v. Southern States Phosphate & Fertilizer Co. (1917), 20 Ga.App. 506, 93 S.E. 157; Titloe v. Hubbard (1878), 63 Ind. 6; McComas v. Haas (1886), 107 Ind. 512, 8 N.E. 579; Continental Bank & T. Co. v. Times Publ. Co., 142 La. 209; L. R. A. 1918B, 632, 76 So. 612; Cushing v. Field, 70 Me. 50, 35 Am. Rep. 293; Crimson v. Russell, 14 Neb. 521, 45 Am. Rep. 126, 16 N.W. 819; Riecks v. Daigle, 17 N.D. 365, 117 N.W. 346; Reynolds v. Richards, 14 P. 205; Dilley v. Van Wiee, 6 Wis. 209.

Even though the statute makes bills of lading negotiable, still the assignee of the bill of lading stands in the same position as the shipper. This too, even though the statute makes bills of lading negotiable.

Exchange National Bank v. Russell, 81 Miss. 169, 32 So. 314; Searles v. Smith Grain Co., 80 Miss. 688, 32 So. 287; Mobile Auto Co. et al. v. W. R. Sturgis & Co., 66 So. 205; L. Mark's Sons v. West Tennessee Grain Co., 81 So. 162; Citizen's Bank & Trust Company of Belzoni v. Harpett National Bank of Franklyn et al., 82 So. 329.

OPINION

ETHRIDGE, P. J.

The Commercial Credit Company, a corporation of Louisiana, sued out a writ of replevin for the possession of one automobile, 1924 model Hupmobile touring, motor R, series 127192, motor No. 127623, of the value of three hundred twenty-five dollars, the property of the Commercial Credit Company, alleged to be wrongfully detained by Dr. Summers.

The writ of replevin was issued, and the car was seized under the said writ, and Dr. Summers gave a forthcoming bond. A declaration was filed in replevin, and the defendant appeared and filed a plea of general issue, not guilty, and filed a motion for a bill of particulars, to require the plaintiff to file with its declaration a bill of particulars showing how, and in what manner, and from what source, and what interest it claimed in the same, and whether the same be equitable or legal interest, and from whom, and how, and upon what consideration it claimed to have acquired the said property, etc. The plaintiff thereupon filed a bill of particulars, setting up that on the 21st day of April, 1924, the United Motor Company, of Hattiesburg, Miss., and the defendant herein, Dr. F. L. Summers, entered into a conditional sale agreement, under the terms, conditions, and stipulations of which the United Motor Company, designated as seller in said agreement, in consideration of the payments, agreements, and conditions contained in said agreement, which on the part of the defendant, designated as the buyer in said agreement, were to be made, done, and performed by the defendant, delivered to him, and agreed to sell, and the buyer agreed to buy, upon the conditions recited in said agreement.

The note for the purchase money of the car, and the agreement reserving title retained by the motor company was made exhibit to the bills of particulars, and it was alleged that the plaintiff, the Commercial Credit Company, was the purchaser for value of the security of the said notes, without notice of any defense or claim on the part of the defendant. The note so made an exhibit to the bill of particulars reads as follows:

"Hattiesburg, Miss.

Date April 21, 1924.

"$ 957.34

Address 615 Bay Street,

"For value received, at the time or times stated in the schedule of payments hereon, I, we, promise to pay to the order of United Motor Company nine hundred and fifty-seven and 34/100 dollars, with exchange on New York, at the office of Commercial Credit Company, Inc., New Orleans, La., with interest after maturity at the highest legal contract rate.

"This note, including all installments thereof, of even date herewith, is identified with conditional sale agreement covering a certain motor vehicle and certain personal property and equipment thereon. Failure to pay this note, or any of the installments thereof, when due, shall at the option of the holder hereof mature all of said installments then unpaid. In the event that an attorney be employed to collect or attempt to collect this note, or any installment thereof, by suit or otherwise, or to preserve or protect the property described in the aforesaid conditional sale, the parties hereto agree to pay all cost incurred, including a reasonable attorney's fee, which shall not be less than fifteen per cent of the amount then due, consenting that suit be brought hereon in any county in the state wherein the holder hereof might elect to sue. The parties hereto, whether maker, surety, or indorser, hereby waive presentment, demand, protest, and notice of nonpayment, and also waive all rights of exemption which they have or may have under the Constitution and laws of this or any other state or of the United States, and the endorsers and sureties hereby agree to extensions of the time of payment hereof without notice to them of such extensions.

"No. 77501

[Signed]

F. L. SUMMERS.

"[Revenue stamp affixed.]

"Schedule of Payments.

"Months after Date.

Months after Date.

"1 mo. $ 79.77

7 mos. $ 79.77

"2 mos. 79.77

8 mos. 79.77

"3 mos. 79.77

9 mos. 79.77

"4 mos. 79.77

10 mos. 79.77

"5 mos. 79.77

11 mos. 79.77

"6 mos. 79.77

12 mos. 79.87"

To secure the payment of the several payments provided in said note, the contract or bill of particulars reserving the title as security for payment was made and signed by the United Motor Company, dealer, and by F. L. Summers, buyer. In this contract it was agreed, among other things, that "the buyer agrees and acknowledges that the within contract covers all conditions and agreements between the parties, and that the loss, injury, or destruction of said car shall not release said buyer from payment as provided herein. Buyer hereby acknowledges receipt of and accepts the car, having first examined and tested the same and found same in sound and first-class condition, and agrees to keep the car insured against loss by fire and theft with insurance companies acceptable to the seller, for not less than the amount owing, and until fully paid, payable to and to protect the interest of the seller, and the seller may place, continue, and renew said insurance for the buyer at the buyer's expense, if the seller so elects."

The contract so made was placed of record in the office of the chancery clerk, and on the following day, the 23d day of April, it was assigned to the Commercial Credit Company, who sent a check to the ...