Elkin Henson Grain Co. v. White

• Decision Date: 14 January 1924
• Docket Number: 23767
• Citation: 134 Miss. 203,98 So. 531
• Court: Mississippi Supreme Court
• Parties: ELKIN HENSON GRAIN CO. v. WHITE

98 So. 531

134 Miss. 203

ELKIN HENSON GRAIN CO. v. WHITE

No. 23767

Supreme Court of Mississippi

January 14, 1924

Division B

APPEAL from circuit court, of Lauderdale county, C. C. MILLER Judge.

Suit in justice court by the Elkin Henson Grain Company against T. J White and another. From a default judgment, defendant White appealed to the circuit court. From a directed verdict in that court, plaintiff appeals. Affirmed.

Judgment affirmed.

W. C. Sams, for appellant.

The record shows that the appellant was a holder in due course of check in question. Therefore, it took said check free from defenses available to prior parties among themselves, and had a right under the law to enforce payment of said check. The Negotiable Instruments Act is founded upon a broad principle of public policy to foster lawful businesses, enterprises, and institutions, including, of course, banking business, mercantile establishments, and commercial life and business in general.

The defendant relied, in the lower Court, on section 1743, Code 1906, as amended by Acts of 1908, chapter 115, and section 2085, Hemingway's Code. But this statute was superseded, certainly as to the appellant herein and all persons similarly situated, by the Negotiable Instruments Acts passed by the state legislature in 1916, and especially by sections 2603, 2604, and 2635 of Hemingway's Code. The evident purpose of the Negotiable Instruments Law, as enacted, was to get rid of all impediments and hindrances to the circulation of negotiable instruments theretofore existing under former statutes, and to embody in said Negotiable Instruments Act the entire law touching such instruments. Wirt v. Stubblefield, 17 App. D. C. 283. Goodman v. Sweatt, 66 So. 535, was decided two years prior to the adoption of the Negotiable Instruments Law in Mississippi.

Merchants, bankers, manufacturers, in fact the entire commercial world, would be subjected to the inconvenience of stopping in their business to investigate and ascertain what the consideration of the check was. They would have to trace the check to its source to determine whether it was for a gaming debt, whisky, or for some other unlawful purpose. See the case of First National Bank of Morristown, Penn., v. C. W. Leeton and Brother, 95 So. 445. Also Higgbotham v. McGready, 105 Am. St. Rep. 467, 468.

F. V. Brahan, for appellee.

The "Uniform Negotiable Instruments Act," in Laws of 1916, page 355, was intended, generally, to repeal our "Anti-Commercial Act" in the Code of 1906, section 4001, but section 197 of said law, on page 382, provides that "all laws and parts of laws inconsistent with this Act are hereby repealed." This section does not repeal all previous statutes and parts of statutes about bills, checks and notes, but only such as are "inconsistent" with the Act. This Act does not, therefore repeal section 1743 of the Laws of 1908, chapter 115, pages 116 to 119, entitled "Debt for Liquors Not Collectible."

This court has repeatedly held that it would not lend its aid to the enforcement of an illegal contract, and the reason given for its repeal is found in 73 So. 883. The contract at bar was an illegal one. Goodman v. Sweatt, 66 So. 535; Cotton v. McKenzie, 57 Miss. 418; Whitehead et al. v. Coker, 76 So. 484. Appellee should be protected from executing an illegal contract which it would be against morals and public policy to enforce.

OPINION

COOK, J.

The appellant, Elkin Henson Grain Company, instituted this suit in a justice court against W. S. Whitehead, as payee and indorser, and against T. J. White as maker, of a certain check for the sum of fifty-five dollars, of which it had become the holder in due course, and which had been dishonored upon presentation for payment. There was a judgment by default against both defendants, and from this judgment T. J. White, the maker of the check, prosecuted an appeal to the circuit court. At the trial in the circuit court the plaintiff offered evidence to establish the fact that it had acquired the check from the payee thereof in due course of trade, and that it had no notice of any defect or infirmity in said check, and no knowledge of any defense of the maker thereof as against the payee and indorser. The defendant, T. J. White, testified that the check was given for the purchase of a quantity of whisky. This testimony was undisputed, and at the conclusion of all the testimony the court granted an instruction to the jury to return a verdict for the defendant, and, from this verdict and the judgment entered thereon, this appeal was prosecuted.

Section 2085, Hemingway's Code, provides that, "If any person shall trust or give credit to another for intoxicating liquor sold, he shall lose the debt, and be forever disabled from recovering the same or any part thereof; and all notes or securities given therefor, under whatever pretense, shall be void."

It is undisputed that the check here involved was given for the purchase price of whisky, and the only question to be determined is whether, in view of the provisions of the Negotiable Instruments Law, payment of such a check can be successfully defended by the maker thereof, when it is owned and held by an innocent purchaser for value without notice of any infirmity in the instrument or defect in the title of the person negotiating it. As we understand the contention of the appellant it is, first, that a check given for the purchase price of whisky does not come within the provisions of section 2085, Hemingway's Code, and second, that this section of the Code has been superseded and repealed by the Negotiable Instruments Law (chapter 244, Laws of 1916).

The contention of appellant that the sale of the whisky was a cash sale, and consequently that the check given as a payment therefor is not rendered invalid by reason of the provisions of section 2085 of Hemingway's Code, cannot be maintained. This section provides that all notes or securities given for the purchase price of intoxicants, under whatever pretense, shall be void. Under the provisions of the Negotiable Instruments Law a check is simply a bill of exchange drawn on a bank payable on demand. Unfortunately a check is not always the equivalent of cash, and until it has been paid by the bank oh which it is drawn it would come within the meaning of the term "securities given for the debt."

The next point for consideration is whether section 2085, Hemingway's Code, has been superseded or repealed by the Negotiable Instruments Law; and, if not, does the illegality of this check constitute a real defense under the Negotiable Instruments Law?

Section 55 of the Negotiable Instruments Law (section 2633, Hemingway's Code), provides:

"The title of a person who negotiates an instrument is defective within the meaning of this act when he obtained the instrument, or any signature thereto, by fraud, duress, or force and fear, or other unlawful means, or for an illegal consideration, or when he negotiates it in breach of faith, or under such circumstances as amount to fraud."

Section 52, Negotiable Instruments Law (section 2630, Hemingway's Code), provides that a holder in due course is one who has taken an instrument, complete and regular on its face before it was overdue, in good faith and for value, without notice of its previous dishonor, and without notice of any infirmity in the instrument or defect in the title of the person negotiating it.

Section 57 of the act (section 2635, Hemingway's Code), provides that "a holder in due course holds the instrument free from any defect of title of prior parties, and free from defenses available to prior parties among...