Geo. Alexander & Co. v. Hazelrigg

• Decision Date: 31 October 1906
• Citation: 123 Ky. 677,97 S.W. 353
• Parties: GEO. ALEXANDER & CO. v. HAZELRIGG.
• Court: Kentucky Court of Appeals

97 S.W. 353

123 Ky. 677

GEO. ALEXANDER & CO. v. HAZELRIGG.

Court of Appeals of Kentucky.

October 31, 1906

Appeal from Circuit Court, Montgomery County.

"To be officially reported."

Action by George Alexander & Co. against John W. Hazelrigg. From a judgment in favor of defendant, plaintiff appeals. Affirmed.

Robt. H. Winn, for appellant.

Lewis Apperson, for appellee.

NUNN J.

This action was instituted by appellant, doing business as Geo Alexander & Co., against the appellee, upon the following promissory note: "$1,592.90. Mt. Sterling, Ky. Sept 14th, 1904. Sixty days after date, we jointly and severally promise to pay to Desha Lucas, or order, fifteen hundred and ninety-two and 90/100 dollars, negotiable and payable at the Montgomery National Bank, Mt. Sterling, Ky. value received with interest at 6 per cent. per annum. [ [[Signed] John W Hazelrigg." It is clear that this is a negotiable promissory note, within the meaning of section 184 of the act relating to negotiable instruments, in Sess. Acts 1904, p. 250, c. 102.

The appellant, in his petition, made the following allegations with reference to his ownership of the note: "That upon a time subsequent to date and before the maturity of the said instrument the said Desha Lucas indorsed his name upon said instrument, and then and there sold and delivered same to this plaintiff, who then and there became, and is now, the owner and holder of same in due course." The appellee filed his answer to the petition. Omitting the formal parts, it reads as follows: "The defendant, John W. Hazelrigg, for answer herein, says it is true he signed the note filed in the plaintiff's petition; but he has no knowledge or information sufficient to form a belief that at a time subsequent to the date of said note, or before the maturity of said instrument, the said Desha Lucas indorsed his name upon said instrument, or then or there or ever sold or delivered the same to the plaintiff, or that the plaintiff then or there or ever became, or is now, the owner or holder of same in due course. (2) For further answer herein, defendant says that the note sued on herein was executed to Desha Lucas in payment of a bet or wager, which was lost upon the result of a horse race, and the consideration for the execution thereof under the law of Kentucky is vicious, illegal, and void, and which defendant relies on and in bar of any recovery herein." The appellant filed a demurrer to each of the paragraphs of the answer. The court overruled it. The appellant declined to plead further. His petition was dismissed, with a judgment against him for costs, and he has appealed.

The first objection made by appellant's counsel is that the first paragraph of the answer is insufficient, because the allegations of the petition and the exhibits filed therewith are such that the appellee had presumptive knowledge of every fact which he denied by reason of want of knowledge or information. To this we cannot agree. It cannot seriously be contended that, because the appellant brought this suit on the note with Desha Lucas' name upon the back of it, it was presumptively within the knowledge of the appellee that appellant took it in good faith and for value before maturity, and at the time it was negotiated to the appellant he had no notice of the infirmity of the instrument or defect in the title of the person negotiating it. As we understand the first paragraph of the answer, it made an issue upon these points.

The real question to be determined is whether a negotiable note executed for money lost on a bet or wager can be successfully defended, when owned and held by an innocent purchaser for value without notice of the infirmity or illegal consideration of the note. As we understand the appellant's petition, he concedes that prior to the passage and the taking effect of the negotiable instrument act, referred to, such a note could be successfully defended in the hands of an innocent purchaser; but since that act took effect he contends that all laws inconsistent with that act stood repealed. He claims that under section 57 the question of consideration cannot be inquired into as against the holder in due course. He takes the paper free from defenses. And in support of this posi...