Franklin Nat. Bank v. Roberts Bros. Co.
| Decision Date | 24 March 1915 |
| Docket Number | 251. |
| Citation | 84 S.E. 706,168 N.C. 473 |
| Parties | FRANKLIN NAT. BANK v. ROBERTS BROS. CO. |
| Court | North Carolina Supreme Court |
Appeal from Superior Court, Wake County; Whedbee, Judge.
Action by the Franklin National Bank against the Roberts Bros Company. From a judgment for plaintiff, defendant appeals. Affirmed.
In an action on a promissory note, evidence held to show that the plaintiff was a bona fide purchaser.
This is a civil action, tried on these issues:
(1) What amount is the plaintiff entitled to recover on the first note sued on? Answer: $2,500, with interest at 6 per cent from November 16, 1912.
(2) What amount is the plaintiff entitled to recover on the second note sued on? Answer: $1,000, with interest at 6 per cent. from November 23, 1912.
J. C Little and Winston & Biggs, all of Raleigh, for appellant.
John W. Hinsdale, of Raleigh, for appellee.
This action is brought to recover on two promissory notes:
"$2,500. Wendell, N. C., Aug. 15, 1912.
Nov. 16, 1912, after date we promise to pay to the order of Harding-Finley Lumber Co. twenty-five hundred dollars at the Bank of Wendell, N.C. Value received, with interest at ______ per cent. per annum.
Indorsed:
The other is similar in form to the above, except it is in the sum of $1,000, and is due November 25, 1912.
It is admitted that these notes were given in exchange for two other notes of similar amounts, executed by the Harding-Finley Lumber Company to the defendant. The defendant discounted the notes received from the said lumber company, and, as they were not paid at maturity, the defendant paid the banks at which those notes were discounted, and refused to pay the notes sued on. This is set up as a defense against the recovery by the plaintiff upon the notes executed by the defendant to the said lumber company. The plaintiff alleges that the notes sued on were indorsed by the Harding-Finley Lumber Company to the plaintiff before the maturity for value, and without notice of any infirmity.
1. It is contended that the notes sued on are nonnegotiable, because there is a blank space for the rate of interest, which is not filled in. It seems to have been decided in a great many cases that stipulating for interest without the rate--i. e., leaving blank the rate of interest--does not affect the negotiability of a promissory note by rendering uncertain the amount, because a blank for interest cannot be filled above the legal rate, and, in the absence of a stipulated rate, the legal rate applies. Hoopes v. Collingswood, 10 Colo. 107, 13 P. 909, 3 Am. St. Rep. 565; Patton v. Shanklin, 14 B. Mon. (Ky.) 15; Holmes v. Trumper, 22 Mich. 427, 7 Am. Rep. 661.
The legal effect of not filling in the blank is the same as if there had been nothing written or printed after the word "interest," and the reading of the note would be to pay "interest until paid." This causes the debt to draw the rate of interest fixed by law where no rate is expressed. Hornstein v. Cifuno, 86 Neb. 103, 125 N.W. 136, 20 Ann. Cas. 1267; Salazar v. Taylor, 18 Colo. 538, 33 P. 369; Jewett v. McGillicuddy, 55 Neb. 588, 75 N.W. 1099; Ogden, Neg. Instr. 42; 2 Daniel, Neg. Instr. (5th Ed.) 1385, 1458; Parley, Law of Interest, 8.
2. The defendant excepted to the issues, and tendered others. These issues offered opportunity to the parties to introduce all pertinent evidence to the matter in controversy, as set out in the pleadings, and that is said to be the proper test. Black v. Black, 110 N.C. 398, 14 S.E. 971; Pretzfelder v. Insurance Co., 123 N.C. 164, 31 S.E. 470, 44 L. R. A. 424.
3. It is contended that there is no consideration for the notes sued on, and that the plaintiff is not a holder in due course and is therefore affected with notice of such infirmity. It is well settled that one promissory note is a good consideration for another promissory note given in exchange. Higginson v. Gray, 47 Mass. (6 Metc.) 212; Savage v. Ball, 17 N. J. Eq. 142.
In Williams v. Banks, 11 Md. 198, it is said:
A mutual exchange of notes will furnish a good consideration for both, if such affirmatively appears to have been the intention of the parties, and that will depend on the particular circumstances of each case.
4. His honor charged the jury:
"If you believe the evidence, you will answer the first issue, '$2,500, with interest at 6 per cent. from November 16, 1912,' and the second issue, '$1,000, with interest at 6 per cent. from November 23, 1912.' "
To this charge the defendant excepted.
We think the evidence in this case fully warranted the instructions given. We do not gainsay the general proposition that a negotiable instrument deposited in a bank, indorsed for collection, remains the property of the depositor, nor that the fact that a bank has given a depositor credit for the amount of a negotiable instrument, regularly indorsed, is not conclusive evidence that the bank had purchased the...
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