Fleshman v. Bibb

• Decision Date: 16 March 1916
• Court: Virginia Supreme Court
• Parties: FLESHMAN. v. BIBB.

88 S.E. 64

FLESHMAN.

v.BIBB.

Supreme Court of Appeals of Virginia.

March 16, 1916.

Error to Circuit Court, Louisa County.

Action by W. C. Bibb against W. D. Flesh-man. There was a judgment for plaintiff, and defendant brings error. Affirmed.

Hill Carter, of Richmond, and Gordon & Gordon, of Louisa, for plaintiff in error.

W. C. Bibb, of Louisa, and D. H. & Walter Leake, of Richmond, for defendant in error.

KELLY, J. The judgment under review was obtained by W. C. Bibb upon two notes executed by W. D. Fleshman to the Compendium Company, incorporated, or order, each dated May 30, 1912, and each indorsed as follows:

"For value received we hereby transfer and assign to W. C. Bibb the within note without recourse. This 31st day of May, 1912. The Compendium Company, inc., by J. L. Thompson, Pres."

It appears that one-half of the consideration for this assignment was furnished by W. W. Smith, and that he was equally interested therein with Bibb.

The underlying grounds of all the defenses relied upon were fraud in the procurement of the contract and failure of consideration; and the first contention of the plaintiff in error arises out of the refusal of the trial court to instruct the jury as follows:

"If you shall believe from the evidence that W. W. Smith paid one-half of the purchase money for said notes, but that they were indorsed, not to him, but to W. C. Bibb, and you further believe that the notes were fraudulent, that is, given because of false representation known to the company's agents to be so, or given for territory which was valueless, then as to said Smith interest in said notes you will find for the defendant, whether he had any actual knowledge of the fraud or not."

Closely related to the foregoing instruction was a second one, also offered by the plaintiff in error and refused, in which the court was requested to tell the jury:

"That the plaintiff had not shown that the indorsement to him of the notes in suit vested in him the legal title to said notes, and they must find for the defendant."

The argument advanced to support these instructions is that, in view of Smith's interest, Bibb could not become a holder in due course as to more than one half interest in the notes, that, as Bibb took the assignment, not as sole owner, but in part for the benefit of another, he did not acquire the notes regularly and in due course, even as to his own half interest, and that therefore he took them only as choses in action subject to any defenses which would be good against the original payee.

There is nothing shown or claimed which places Smith in any worse position than Bibb, or in any different position from him, with reference to the purchase of these notes, except the mere fact that the assignment is made solely to Bibb. Under this state of facts we have no hesitancy in deciding that Bibb was the holder in due course of the notes sued on, within the meaning of the act known as the "Negotiable instruments Law, " appearing as section 2841a of the Code of 1904, that, as such holder, he had the right to maintain the action in his own name, and that no defense could be made in the case affecting Smith, except such as would also be good against Bibb. The statute referred to was intended to embody in one act all the statutory law of the state and all of the rules of the law merchant on the subject of negotiable instruments. American Bank v. McComb, 105 Va. 473, 476, 54 S. E. 14. Its construction and application should tend to simplify and facilitate, not to confuse and impede, trade and commerce in and by means of negotiable paper. The conclusion that Bibb was a holder in due...