First Nat. Bank of Chattanooga v. Stockell

• Court: Supreme Court of Tennessee
• Citation: 21 S.W. 523,92 Tenn. 252
• Parties: FIRST NAT. BANK OF CHATTANOOGA v. STOCKELL.
• Decision Date: 22 February 1893

21 S.W. 523

92 Tenn. 252

FIRST NAT. BANK OF CHATTANOOGA v. STOCKELL.

Supreme Court of Tennessee.

February 22, 1893

Appeal from chancery court, Davidson county; Andrew Allison Chancellor.

Bill by the First National Bank of Chattanooga against C. H Stockell. Decree, from which defendant appeals. Affirmed.

James S. Pilcher, for appellant.

John Ruhm & Son, for appellee.

WILKES J.

The bill in this cause was filed to recover the amount of two notes made by C. H. Stockell to John F. Haskins, and by him indorsed to plaintiff. The notes are as follows:

(1) "$1,000. Chattanooga, Tenn., April 8, 1890. Four months after date I promise to pay to the order of John F. Haskins one thousand dollars, at First National Bank, Chattanooga Tenn. Value received. C. I. P. C. H. Stockell."

(2) "$750. Chattanooga, Tenn., May 29, 1890. Four months after date I promise to pay to the order of John F. Haskins seven hundred and fifty dollars, at the First National Bank of Chattanooga, Tenn. C. I. P. C. H. Stockell."

These notes were renewals of two others previously given for a part interest in a patent called the "Chapin Iron Process," which Haskins had contracted to introduce and extend over several states, including Tennessee. It is insisted by Stockell, the maker of the notes, that Haskins the payee, failed to prosecute the work of introduction, and thereby forfeited all right to the patent, and hence these notes, executed for a part interest, were without consideration. The bank insists, however, that it is an innocent holder of the notes, for full value, given at the time of indorsement, which was prior to their maturity. As against the bank, Stockell insists that it had actual notice of the consideration on which the notes were based when it took the notes, and, further, that they had, upon their face notice that they were given for a patent right. Upon an examination of the record, we think it fails to show that the bank had actual notice, as claimed. But it is insisted that the letters, "C. I. P.," on the face of the notes, is sufficient notice of the fact that they were given for a patent, to wit, the "Chapin Iron Process," so as to bring them within the rule laid down in section 2481, Mill. & V. Code, which is as follows: "A note or other security given in this state, in the purchase of a patent right, or any interest therein, shall be subject, in the hands of any holder or assignee, to all the legal and equitable defenses to which it was subject in the hands of the original payee, when the fact that it was so given in such purchase appears on its face." We think the initials, "C. I. P.," standing unexplained on the face of the notes, give no notice...