Fidelity Trust Co. v. Whitehead
| Decision Date | 04 March 1914 |
| Citation | 80 S.E. 1065,165 N.C. 74 |
| Parties | FIDELITY TRUST CO. v. WHITEHEAD ET AL. |
| Court | North Carolina Supreme Court |
Appeal from Superior Court, Halifax County; Peihles, Judge.
Action by the Fidelity Trust Company against J. D. Whitehead and others. From a judgment for defendants, plaintiff appeals. Affirmed.
In an action on a note obtained by fraud in which plaintiff claimed as purchaser without notice, the jury could consider on the question of notice the facts that one installment of interest was due and unpaid when plaintiff purchased it that plaintiff purchased at a discount and that plaintiff's president testified that the payees who indorsed the note were solvent and lived in plaintiff's town in another state.
The "Mr. Flower" referred to in the last paragraph of the opinion was the president of plaintiff company, who negotiated the purchase of the note sued on.
Clark & Clark and George C. Green, all of Weldon, and Winston & Biggs, of Raleigh, for appellant.
W. E Daniel, of Weldon, R. C. Dunn, of Enfield, and E. L. Travis of Raleigh, for appellees.
This is another action, of which we have had several, upon a note to McLaughlin Bros. as part of the purchase price of a French coach horse. See Trust Co. v. Ellen, 163 N.C. 45, 79 S.E. 263. The defendants pleaded fraud in procuring the note as a defense, and that issue is so found, and there is no exception on the part of the plaintiff.
The burden as to the second issue, whether the note was "purchased in good faith and without notice of any infirmity or defect and before maturity and for value," was on the plaintiff. Rev. 2208; Bank v. Exum, 163 N.C. 203, 79 S.E. 498.
The note was dated November 2, 1907, payable July 1, 1911 "with interest at 6 per cent., payable annually." The plaintiff purchased the note, according to its own evidence, on November 1, 1909, when at least one installment of interest was past due.
The court charged the jury that the fact that interest was unpaid on the note was a circumstance to be considered in passing upon the second issue, and that they could also consider the further circumstances that the president of the plaintiff company testified that McLaughlin Bros. were indorsees on the note and were solvent and lived in the same town, and that the plaintiff, instead of bringing suit against them, came to North Carolina to sue the defendants. The jury were also entitled to consider the further fact that upon the plaintiff's evidence it bought the note for $1,490.64, when its face value at that time was $1,624.30, and that there was no indorsement on the note of payment of past-due interest. These were circumstances which the defendants were entitled to have submitted to the jury upon the second issue, which the jury found against the plaintiff. The plaintiff earnestly contended that the nonpayment of interest when it fell due was not notice of dishonor. The court, however, simply left it to the jury, together with the other circumstances above named, for the jury to find whether or not the plaintiff was a purchaser without notice.
As to the abstract proposition, for such it was in this case "where a note is payable in a future day, with interest payable at stated periods before the maturity of the principal of the note, whether the nonpayment of the installments of interest is notice of dishonor," the authorities are divided. In Newell v. Gregg, 51 Barb. (N. Y.) 263, it is held: Tiedeman, Com. Paper, § 297. There are cases which hold to the contrary, and in Daniel on Neg. Instr. § 787 (Calvert's Ed.), it is said, "The...
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