Credit Alliance Corporation v. Bryan
| Decision Date | 08 April 1930 |
| Docket Number | No. 20988.,20988. |
| Citation | 27 S.W.2d 441 |
| Parties | CREDIT ALLIANCE CORPORATION v. BRYAN. |
| Court | Missouri Court of Appeals |
Appeal from Circuit Court, Cape Girardeau County; Frank Kelly, Judge.
"Not to be officially published."
Action by the Credit Alliance Corporation against E. W. Bryan. Judgment for defendant, and plaintiff appeals.
Affirmed.
Elmer A. Strom and Oliver & Oliver, all of Cape Girardeau, for appellant.
Spradling & Dalton, of Cape Girardeau, for respondent.
This is an action in equity to recover on thirty promissory notes, in amounts aggregating $4,362, given by defendant to Armand-May, Inc., as a part of the purchase price of laundry machines sold by said Armand-May, Inc., to defendant, and to subject said machines to the payment of said notes.
Plaintiff alleges in its petition that it is a corporation having its chief office in the city of New York; that on the 5th day of February, 1927, a written agreement was entered into between Armand-May, Inc., and defendant, whereby it agreed to sell and deliver to defendant at Cape Girardeau, Mo., certain laundry machines, for the sum of $6,015; that defendant paid said Armand-May, Inc., $1,203 on said purchase price, and executed and delivered twelve notes in the sum of $75 each, and twenty-four notes in the sum of $163 each, payable monthly, with interest at 6 per cent., aggregating $4,812; that by said written agreement, it was agreed that the machines were to remain the property, and subject to the order, of Armand-May, Inc., until paid for in full; that said machines were duly delivered in accordance with said agreement; that six of these notes, aggregating $450, were paid by defendant to said Armand-May, Inc.; that the remaining notes were transferred by successive indorsements and delivery by said Armand-May, Inc., to the American Factors Company, and by said company to the plaintiff; that plaintiff acquired said notes before maturity, and in regular course of business, for value received, and is a holder in due course thereof; that said notes on their face read that they are a series of thirty-six notes given in part payment for said machines, and that the title to the same shall remain in Armand-May, Inc., until the full amount of the purchase money is paid; that on the 9th day of December, 1927, the American Factors Company assigned and transferred to plaintiff, for value received, and in regular course of business, all their right, title, and interest in and to said contract and notes; and prays judgment for $4,362, with interest, and for a special execution to be levied upon said machines, and to such other relief as may be just, equitable, and proper.
The answer denies generally the allegations in the petition contained, and sets up, by way of affirmative defense, that Armand-May, Inc., breached its warranty of said machines, in that said machines were wholly unfit and useless for the purpose for which they were intended to be used; that defendant tendered the return of the machines; that plaintiff took said notes with full knowledge of defendant's refusal to pay said notes and of his denial of all liability thereon on account of such breach of warranty and failure of consideration; and denies specifically that plaintiff is a purchaser for value before maturity and without notice of defendant's rights, claims, and equities.
The trial resulted in a judgment for defendant, and the plaintiff appeals.
The notes sued on are made payable to the order of Armand-May, Inc. Indorsements appear on the notes, as follows:
"Armand May, Inc
"L. Kimmell, Treas
"American Factors Company
"By L. Kimmel
Secty., & Treas."
Plaintiff's assistant secretary testified that on December 13, 1927, he purchased from the American Factors Company the notes in suit, and that to his knowledge plaintiff at the time of the purchase of the notes had no notice of any defenses, defects, infirmities, counterclaims, or reason why the notes should not be paid. The witness stated that the notes at the time they were received by plaintiff bore the indorsements of Armand-May, Inc., and American Factors Company, but he stated this merely as descriptive of the notes, and he did not claim to have any knowledge relative to the making of the indorsements. He did not say that he personally purchased the notes on behalf of the plaintiff from the American Factors Company, nor did he say what consideration plaintiff paid for the notes.
The breach of warranty and failure of consideration pleaded by the defendant were abundantly sustained by the undisputed facts shown in evidence. Plaintiff contends, however, that it purchased the notes for value before maturity and without any notice of infirmities or defenses to the notes, and that it holds the notes free of prior equities in favor of defendant. Defendant contends (1) that there was no proof of plaintiff's ownership of the notes, and (2) that there was no proof of the indorsements on the notes, or that the indorsements were authorized. Plaintiff contends that its possession of the notes is prima facie evidence of the genuineness and authenticity of the indorsements appearing thereon, and makes out a prima facie case that plaintiff had become the holder of the notes for value before maturity in the usual course of business and without anything to impeach its title, and contends, moreover, that defendant's answer admits plaintiff's ownership of the notes.
In Wade v. Boone, 184 Mo. App. 88, 168 S. W. 360, it was said to be well settled that, where a promissory note is payable to the order of the person therein named, the possession of such note by one other than the payee, where the same is unindorsed, is no evidence of ownership in the holder, and that the possession of an unindorsed note does not relieve the holder from the presumption that the note still belongs to the payee. Accordingly, it was held error to admit in evidence a note with an assignment indorsed thereon without proof of the assignment. In Bosse v. Weik, 144 Mo. App. 468, 129 S. W. 417, it was held that the possession by a third party of bonds payable to the order of a person therein named is not prima facie evidence of ownership, but such party is required to prove the assignment of the bonds and his title. In Federal Discount Co. v. Becker, 138 Mo. App. 54, 119 S. W. 981, certain bills of exchange bearing indorsements were held not admissible in evidence against the acceptor without proof of the indorsements, and the possession of the bills by the plaintiff, with the indorsements thereon, was held not sufficient to prove ownership in plaintiff. In Dunlap v. Kelly, 105 Mo. App. 1, 78 S. W. 664, it was stated that, as a general rule, a plaintiff should be required to make proof of indorsements on a note by evidence aliunde the indorsements themselves. In Worrell v. Roberts, 58 Mo. App. 197, it was held that a general denial in an action on a promissory note by an alleged indorsee thereof puts in issue the plaintiff's title to the note and the genuineness of the indorsements, and that the plaintiff failed to show a prima facie title to the note sued on by reading the...
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