Ga. State Bank v. Harden

• Decision Date: 26 April 1924
• Docket Number: (No. 15212.)
• Citation: 32 Ga.App. 300,124 S.E. 68
• Parties: GEORGIA STATE BANK . v. HARDEN.
• Court: Georgia Court of Appeals

32 Ga.App. 300

124 S.E. 68

GEORGIA STATE BANK .

v.HARDEN.

(No. 15212.)

Court of Appeals of Georgia,

Division No. 2.

April 26, 1924.

Rehearing Denied July 14, 1924.

(Syllabus by the Court.)

Error from City Court of Oglethorpe; R. L. Greer, Judge.

Action by the Georgia State Bank against H. A. Harden. Judgment for defendant, and plaintiff brings error. Reversed.

Robinson & Ford, of Montezuma, for plaintiff in error.

Jule W. Felton and Jule Felton, both of Montezuma, for defendant in error.

BELL, J. On January 3, 1920, H. A. Harden executed a promissory note to L. A. Crawford & Son, or order for $300, which was secured by a mortgage on personalty. The nete recited a maturity date of February 1, 1920, though it provided that it was to be paid in monthly payments of $50 per month. On December 26, 1922, Georgia State Bank, holding the note and mortgage as by a blank indorsement by the payees, L. A. Crawford & Son, foreclosed the mortgage, and Harden filed an affidavit of illegality, the third ground of which, being the only ground of the original affidavit which it is necessary to consider, was as follows:

"That the Bank of Montezuma held this note as collateral security to secure indebtedness of L. A. Crawford & Son, and it authorized L. A. Crawford, Jr., and A. O. Williams to collect said note from affiaut and credit him with the payment. Affiant paid same to L. A. Crawford & Son by two checks for $50 each and one draft for $200, which amounts covered the entire indebtedness at the time it was paid, the exact date of which affiant does not recollect."

At the trial the defendant offered an amendment, alleging that the note was paid by the defendant "In full to the owners of the same, L. A. Crawford & Son, before the same was assigned to the Bank of Montezuma, " setting out the alleged dates, which were subsequent to its maturity. It may bestated here that it appeared upon the trial that some time in 1922 the Bank of Montezuma and the Georgia State Bank were merged, the latter acquiring all the assets of the former. The trial resulted in a verdict in favor of the defendant. The plaintiff bank filed a motion for a new trial, which was overruled, and it excepted.

Error is assigned in two grounds of the motion for a new trial, upon the admission of evidence by the defendant Harden to the effect that he had paid the note to Crawford & Son. $50 on March 8th, $50 on April 10th, and $200 on October 5th, all in the year 1920, upon the ground that the note had been transferred to a bona fide holder, the Bank of Montezuma, under which the plaintiff bank held, and that the defendant had no authority to pay the money to the payee.

The defendant testified that the note was not exhibited to him by the payee at any payment, that the first two payments were made by mail, and that when he made the last payment the payee did not say anything about who had the note, except that he would mail it. With reference to this last payment, the defendant further testified:

"I knew he [a member of the payee firm] didn't have the note. He promised he would mail it to me. He didn't say where the note was * * * I saw him afterwards. He looked for the note in his office. * * * He said he couldn't find it right then, but would get it and mail it to me. He didn't tell me that the note was in the bank. When I paid the $200, I knew he didn't have the note with him. I wasn't in his office; I didn't go there. The time when he looked for the note was some time in November or December, I think it was."

There was no evidence whatever that the payee was the agent of the bank to collect the note. These grounds of the motion for a new trial must be considered in the light of certain evidence introduced by the plaintiff. At the outset of the trial, the plaintiff's attorney said:

"We tender in evidence two notes, as follows: One dated March 81, 1920, for $1,905.42, payable to Bank of Montezuma, signed by L. A. Crawford & Son, by L. A. Crawford, Jr., setting forth that there are collateral notes, aggregating $3,446.25 attached; note for $300, payable to L. A. Crawford & Son, mortgage note, signed by H. A. Harden and indorsed by L. A. Crawford & Son, by L. A. Crawford, Jr."

The notes were admitted in evidence.

H. N. Gallaher, who had held office as president of the Bank of Montezuma, testified:

"I would know whether or not notes placed with the Bank of Montezuma as collateral were ever turned over to a person for collection. These principal notes of Crawford were—we tried collecting. Yes, sir; some of the Crawford notes that were placed with the Bank of Montezuma as collateral were turned over to A. O. Williams for collection. I cannot give you the time that was done. At that time the Craw fords were not in Montezuma; they had gone. We hadn't placed these notes with either of the Crawfords for collection—they were in the bank all the time."

Two other special grounds of the motion for a new trial will be referred to in the opinion.

1. It is suggested by the defendant in error that the special grounds of the motion should not be considered, because they were not approved by the trial judge. Each of such grounds, however, was set out in the bill of exceptions, which the judge unqualifiedly certified as true. This was a sufficient approval and verification. Humphreys v. Smith, 128 Ga. 549 (1), 58 S. E. 26; Baldwin v. Daniel, 69 Ga. 782 (2). Furthermore:

"Under the 'Practice Act' of 1911 (Acts 1911, p. 149, § 3), the fact that there was no formal approval of the grounds of the amendment to the motion for a new trial (the only entry thereon being 'allowed and ordered filed') will not withdraw such an amendment from the consideration of the reviewing court, or prevent this court from determining the merits of the amendment, unless the point was first raised and insisted on before the trial judge. As it does not appear in this case that any question as to the approval of the grounds of the amendment to the motion was raised before the trial judge, the sufficiency of the judge's approval cannot now be challenged." Mason v. State, 18 Ga. App. 224 (1), 89 ». E. 185; Lott v. Banks, 21 Ga. App. 246 (1), 94 S. E. 322; Johnson v. Redwine Bros., 21 Ga. App. 811 (i), 95 S. E. 315.

2. With reference to the general grounds, and also the special grounds assigning error upon the admission of the evidence of the payments, it is insisted by the defendant in error that the presumption that the Bank of Montezuma acquired the note in question before maturity was rebutted, to the extent that the question was one for the jury. It is noticed that the note directly in question, that is the small note, became due on February 1, 1920, and that the larger note which was introduced in connection therewith was not executed until March 31, 1920. If the small note was included in the collateral notes which secured the larger one, the Bank of Montezuma, therefore, acquired it after maturity. We think that the fact that the two notes were introduced at one and the same time, the manner in which they were referred to by the counsel in introducing them, and the testimony of Mr. Gallaher, with reference to certain collateral notes, were sufficient—being circumstances brought in by the plaintiff, evidently for no other purpose—to authorize the inference that the small note was among the collateral pledged to secure the larger note, and therefore that the Bank of Montezuma acquired it after maturity.

3. But the evidence, nevertheless, demanded a finding for the plaintiff for the.amount of the note, less the first payment. The note involved in this case was a negotiable instrument. Civil Code 1910, §§ 4270, 4273; Reed v. Murphy, 1 Ga. 236 (1); Lynch v. Goldsmith, 64 Ga. 42 (1). If the note was sold and transferred to the Bank of Montezuma before the defendant made the payments to L. A. Crawford & Son, the payee, such payments would not be availing as a defense, in the absence of proof of the payee's right to collect the note, or that the bank received the money; the note not having been produced by the payee at the time.

The large note had no relevancy whatsoever in this case, unless it was established by that and the other evidence (and circumstances) referred to in the second division that the small note was included in the collateral recited in its face; and thus that the small note was acquired by the Bank of Montezuma after its maturity on February 1, 1920. So, then, the bank could not have obtained the small note later than the date of the larger note, to wit, March 31, 1920. This indisputably appears. One of the $50 payments and the $200 payment were both made after that date. It not being shown that the payee had the right to collect the note, or owned it, or had possession of it at the time the maker claimed to have made these payments, such payments constituted no defense to the note. Bank of Cumming v. Bruce, 22 Ga. App. 237,...