Dexter v. Lakeshore City Sanitation Dist.

• Decision Date: 10 May 1971
• Docket Number: No. 9175,9175
• Citation: 484 P.2d 1266,1971 NMSC 57,82 N.M. 556
• Parties: Loula DEXTER et al., Plaintiffs-Appellants, v. LAKESHORE CITY SANITATION DISTRICT, Defendant-Appellee.
• Court: New Mexico Supreme Court

Page 1266

484 P.2d 1266

82 N.M. 556

Loula DEXTER et al., Plaintiffs-Appellants, v. LAKESHORE CITY SANITATION DISTRICT, Defendant-Appellee.

No. 9175.

Supreme Court of New Mexico.

May 10, 1971.

John B. Speer, Albuquerque, for appellants

Marron, Houk & McKinnon, Albuquerque, for appellee.

OPINION

McMANUS, Justice.

This was an action in the District Court of Sierra County on bonds and interest coupons issued by defendant Lakeshore City Sanitation District. John B. Speer brought the action on behalf of himself pro se and as attorney for the other three plaintiffs, James B. Speer II, as trustee, Loula Dexter and D. G. Bell. After the cause was at issue, plaintiff John Speer moved for summary judgment, which was denied. By stipulation of the parties, an amended complaint was filed and the case proceeded to trial without a jury, which resulted in a judgment for John B. Speer and a denial of the claims of the other three plaintiffs.

Plaintiff claims as error the failure of the trial court to grant summary judgment in plaintiffs' favor. The trial court's ruling on this motion was based substantially on the same reasoning as was his ruling after a full hearing on the case was concluded. Consequently, these will be covered together.

John B. Speer offered evidence as to the ownership of the bonds and coupons which were the subject of the trial. The bonds in question were bearer bonds and the other plaintiffs were neither present at the trial nor did they testify. The court accepted John B. Speer's testimony as to those bonds and coupons owned by himself, but refused his testimony as to the ownership of other bonds and coupons allegedly owned by the other three plaintiffs and dismissed their cause with prejudice.

A bearer bond is a negotiable instrument, whose mere possession is sufficient evidence upon which to predicate a right to sue, the presumption being that the holder of a negotiable instrument becomes its holder for value. See, Coler v. Board of County Com'rs., 6 N.M. 88 at 127--128, 27 P. 619 (1891). Numerous other cases have held that the title or interest of the holder of commercial paper cannot be disputed or inquired into unless necessary to establish a legitimate and meritorious defense. See City of Lakeland v. Select Tenures, Inc., 129 Fla. 338, 176 So. 274 (1934); Mid-State Homes, Inc. v. Hockenbarger, 192 Kan. 505, 389 P.2d 760 (1964); john Davis & Company v. Cedar Glen # Four, Inc., 75 Wash.2d 214, 450 P.2d 166 (1969). Defendant in our case asserted no such defenses as discussed above, but filed a general denial of most of the allegations on the basis of lack of information or knowledge sufficient to form a belief as to the truth of the allegations. The burden of establishing a defense is upon the maker of negotiable promissory paper. The trial court erred in refusing to accept John B. Speer's testimony as to the other plaintiffs' ownership of bonds and coupons, as his mere possession and tendering of these instruments into evidence was sufficient.

Plaintiff, John B. Speer, also alleges error in that...