Fed. Land Bank Op Baltimore v. Carl T., (No. 6915)

• Decision Date: 05 May 1931
• Docket Number: (No. 6915)
• Citation: 110 W.Va. 433
• Court: West Virginia Supreme Court
• Parties: Federal Land Bank op Baltimore v. G. W. Neely et als.Carl T. and Mary A. Wiant, Appellants(Rehearing denied)

110 W.Va. 433

Federal Land Bank op Baltimore

v. G. W. Neely et als.Carl T. and Mary A. Wiant, Appellants(Rehearing denied)

(No. 6915)

Supreme Court of Appeals of West Virginia.

Submitted April 29, 1931.

Decided May 5, 1931.

June 9, 1931.

Bills and Notes

A stranger who acquires a negotiable instrument is a purchaser, under section 119 of the Negotiable Instrument Law, unless the acquisition is "on behalf of the principal debtor."

Appeal from Circuit Court, Gilmer County.

Suit by Federal Land Bank of Baltimore against George W. Neely, Carl T. Wiant, and others. From an adverse decree, defendant Wiant and wife appeal.

Reversed and remanded.

J. J. JJendrick, for appellants.

J. D. Jones and B. W. C ruddock, for appellees.

Hatcher, Judge:

This appeal presents the single question, was the payment of a note by a stranger to it, a discharge or a purchase of the note?

Carl T. Wiant and wife, Mary, owned a tract of 120 acres, upon which they gave a mortgage in 1923 to secure the Federal Land Bank of Baltimore the payment of $1,000.00. On January 9, 1924, the Wiants conveyed the tract to Iva Miller, reserving one-half the oil and gas. As consideration for the conveyance, the vendee assumed the payment of the mortgage and executed to the Wiants four negotiable notes of $338.75 each, payable in 1, 2, 3 and 4 years from date, respectively. A vendor's lien was reserved to secure the payment of the consideration. Iva Miller conveyed her one-half interest in the oil and gas to Everett Miller on February 4, 1924, who on the same day conveyed the one-half interest to John E. and J. Erie Arbuckle. On August 9, 1924, Iva Miller conveyed all the 120 acres except the oil and gas to G. W. Neely, who assumed payment of the mortgage and the four purchase money notes given by her to the Wiants. About that time the Wiants assigned those notes to Willa A. Hardman, to whom Neely paid the first note when it became due. Mrs. Hardman was paid the amount due on the second note by J. W. Ross in August 1926, and that note is the one involved in this appeal. Some time later Ross took a judgment against the Wiants as endorsers of the note. Neely made no other payments, and this suit was brought in December, 1926, by the Land Bank to foreclose the mortgage on the 120 acres, etc. The suit was later converted into a creditors' suit, and the 120 acres were sold. After satisfying the mortgage and paying off the other two Iva Miller notes held by Mrs. Hardman, there remained $676.41 from the proceeds of the sale. Ross and the Wiants claimed that the Iva Miller note acquired by Ross from Mrs. Hardman should be paid out of this remainder. The circuit court rejected their claim and awarded the entire balance to John E. and J. Erie Arbuckle. The Wiants appeal.

There was no written assignment of the note by Mrs. Hardman, who testified that she was referred to the National Exchange Bank of Weston by Neely after the note became due, that she approached Mr. Ross as an official of his bank, and that he told her the banks "were taking care of Mr. Neely" and "were going to try to keep Mr. Neely on his feet."

Mr. Ross testified as follows: that he was cashier of the National Exchange Bank; that in August, 1926, Mrs. Hardman came to the bank and said suit would be brought against Neely on the note in question if it were not paid; that his bank and The Citizens Bank had, a short time before, taken a mortgage on the lands of Neely to secure debts owing to the two banks; that Mrs. Hardman informed him that the note was in the possession of the Kanawha Union Bank of Glenville; that he had the latter bank send the note to the National Exchange Bank, and that he personally gave his bank a check for the amount of the note; that his bank "as an institution" had no knowledge of the payment until some time after it was made; that Neely did not confer with him about the note prior to his connection with it, and did not know of that connection until long afterwards; that Mrs. Hardman told him there was a vendor's lien to secure the note and the note '' was good''; and...