First National Bank of Madison v. Sprout

• Decision Date: 05 January 1907
• Docket Number: 14,629
• Parties: FIRST NATIONAL BANK OF MADISON, APPELLANT, v. CHARLES W SPROUT, APPELLEE
• Court: Nebraska Supreme Court

110 N.W. 713

78 Neb. 187

FIRST NATIONAL BANK OF MADISON, APPELLANT, v. CHARLES W SPROUT, APPELLEE

No. 14,629

Supreme Court of Nebraska

January 5, 1907

APPEAL from the district court for Madison county: JOHN F. BOYD JUDGE. Reversed.

REVERSED.

Allen & Reed and W. V. Allen, for appellant.

M. B Foster, contra.

JACKSON C. ALBERT, C., concurs. DUFFIE, C., not sitting.

OPINION

JACKSON, C.

Plaintiff sued the defendant to recover on a promissory note. The petition sets out the execution and delivery by the defendant of a note payable to the order of the Eureka Seed Meal Company, and alleges that "Thereafter, and before maturity, the plaintiff for value, in due course of trade, purchased said promissory note of the said Eureka Seed Meal Company, who then and there indorsed the same, as follows: 'Eureka Seed Meal Company, by A. L. Glover, Manager'; that the plaintiff is now the owner and holder of said promissory note, and that the same is due and unpaid." The answer is a general denial. At the trial the plaintiff produced the note, had it identified as an exhibit, and proved that it purchased the same and paid a valuable consideration therefor. It also produced evidence tending to show that the signature to the note was the genuine signature of the defendant. The note was offered and received in evidence, and at the close of the plaintiff's case the trial court, on the motion of the defendant, directed a verdict for the defendant. The plaintiff appeals.

It appears from the discussion of counsel that the reason which prompted the trial court to direct a verdict for the defendant was that the offer of the note in evidence did not include the indorsement of the payee, and because of the failure to prove the indorsement the plaintiff was not entitled to recover. Proof of the indorsement, however, under the allegations of the petition and the evidence of ownership, was not indispensable to the plaintiff's case. In Michigan Mutual Life Ins. Co. v. Klatt, 2 Neb Unoff. 870, it was held that possession of a promissory note is prima facie evidence of its ownership. That action was one in equity for the foreclosure of a real estate mortgage, and the holding was in accord with the equitable rule; but it does not follow that under the same statement of facts an action at law could not be maintained against the maker of the note. A parol transfer by the payee without indorsement of a check payable to order, accompanied by manual delivery, is valid. Freund v. Importers & Traders' Nat. Bank, 76 N.Y. 352 A transferee of...