Farrar v. Bank Of N.Y.

• Citation: 17 S.E. 87,90 Ga. 331
• Parties: FARRAR et al. v. BANK OF NEW YORK. JONES. v. SAME.
• Decision Date: 28 April 1892
• Court: Supreme Court of Georgia

17 S.E. 87

90 Ga. 331

FARRAR et al.

v.BANK OF NEW YORK.

JONES.

v.SAME.

Supreme Court of Georgia.

April 28, 1892.

Negotiable Instruments—Transfer—Consideration—Conflict of Law.

A note payable to a named person or order, and indorsed by the payee, though under seal, and therefore not negotiable, according to the strict commercial law prevailing in Alabama, if made and indorsed for the accommodation of a person not a party thereto, and by him put in circulation for value, is not without consideration as between the holder who paid value and the accommodation maker or indorsee The consideration which the parties contemplated when the note was executed and indorsed was realized, a consideration moving to the person intended to be accommodated being of as much efficacy as if it had moved directly to the accommodation maker or indorser.

(Syllabus by the Court.)

Error from city court of Atlanta; Howard Van Epps, Judge.

Action on a note by the Bank of New York against R. M. Farrar and one Jones, and an action by the same plaintiff against defendant Jones. Plaintiff had judgment In each case by direction of the court, and defendants bring error. Affirmed.

Rosser & Carter, for plaintiffs in error.

Abbott & Smith, for defendant in error.

BLECKLEY, C. J. Two separate cases are governed by the same principle. In both of them the bank was the plaintiff below. In one the suit was against Farrar as maker and Jones as indorser; in the other the suit was against Jones alone as maker. In each of them the court directed a verdict for the plaintiff. On the undisputed facts this direction would have been correct if the sealed notes declared upon and the indorsements thereon had been Georgia contracts, for in that event they would have been negotiable, and the plaintiff, being a bona fide holder for value, and acquiring title before maturity and without notice, would have been protected. The trial court, on the facts in evidence, held and decided that they were Georgia contracts, and this decision was probably erroneous. But the error was harmless, for, treating them as Alabama contracts, the plaintiff had an equitable, if not also a legal, right to recover, although by the law of Alabama such notes are not negotiable as commercial paper, but only assignable "subject to all payments, set-offs, and discounts had or possessed against the same previous to notice of assignment or transfer." In order to abbreviate the discussion, wo may allow the case against Jones as maker to fall into the background, as a decision of the other will decide it also. The note made by Farmland Indorsed by Jones purports on its face to have been executed at Sheffield, Ala. It matured four months after its date, and was payable to Jones or order, who indorsed it in blank. Both maker and indorser affixed their signatures in Georgia, and the instrument was sent by them, or one of them, through the mail, to one Woodson, who resided at Sheffield, Ala. This was done at Woodson's request, and it is admitted that the instrument was an accommodation paper relatively to both the maker and indorser, and thus the doctrine that a seal imports consideration is not involved. The...