Goldberg & Lewis v. Stone

Decision Date23 April 1914
Docket Number256
Citation10 Ala.App. 485,65 So. 454
CourtAlabama Court of Appeals

Rehearing Denied May 14, 1914

Appeal from Shelby County Court; E.S. Lyman, Judge.

Action by Goldberg & Lewis against J.H. Stone. Judgment for defendant, and plaintiff appeals. Affirmed.

Browne, Leeper & Koenig, of Columbiana, for appellant.

Riddle & Ellis, of Columbiana, for appellee.


This case, involving no other propositions than heretofore presented, was before this court on a former appeal and is to be found reported in the sixth volume of the Alabama Appellate Court reports at page 249, 60 So. 744; the appellants here being the appellees on that appeal. There are many assignments of error made upon the record, but they practically raise but one question, and the assignments relating to this question were discussed together by appellants' counsel on oral argument, and are treated in the same manner in extensive and well-prepared briefs filed in support of the appellants' contention.

The proposition or construction so earnestly presented and persistently contended for by appellants' counsel is that, under the provisions of our Negotiable Instruments Law (Acts 1907, p. 660 et seq.; Code, § 4958 et seq.), the appellants as the named payees of a negotiable instrument can be "a holder in due course" as against the appellee, one of the parties to it as maker or surety.

We considered this proposition at length on the former appeal (see opinion on application for rehearing), and the only argument that is now offered in support of the appellants' contention that was not before advanced and considered by us is based on the recognized canon of construction acquiesced in by all of the courts, that, when a statute is subsequently adopted or re-enacted after it has received judicial construction, the known and settled construction that has been given to it by the courts is considered as becoming a part of it--"silently incorporated"--and that the subsequent adoption includes the adoption of the construction that has been given and affixed to the statute. It is urged in this connection that our negotiable instruments law of 1907 is substantially taken from, and is a re-enactment in substance and effect, by the lawmaking powers of our state, of the English statute known as the bills of exchange act of 1882. If this is the case, and a comparison of the statutes shows that it is, then the rule of construction contended for would apply. I.C.C. v. Del. L. & W.R.R. Co., 220 U.S. 235 31 Sup.Ct. 392, 55 L.Ed. 448; McDonald v. Hovey, 110 U.S. 619, 4 Sup.Ct. 142, 28 L.Ed. 269.

Those parts or sections of our negotiable instruments law involved in the question presented here on the rulings of the trial court appear to be adopted from sections of the English bills of exchange act that are identical with our law. In fact, our statute only substantially differs from the English statute in that, not having stamp laws, as England has, our statute does not include and make provision for matters having reference to those laws. Our statute apparently being an adoption in substance of the English law, it then becomes necessary to examine the English cases construing these sections of the bills of exchange act prior to their adoption or enactment into our laws, to ascertain if they had received and affixed to them a known, settled judicial construction by the courts when adopted and enacted into law in this state.

In passing from a reference to a comparison of the two statutes (our own and that of England) as showing them to be substantially the same, it may be well, to prevent confusion in considering the English cases and in discussing the question in connection with the two statutes, to call attention to the fact that the method of numbering the sections of the two statutes is by no means the same, and that section 191 of the Negotiable Instruments Law (Acts 1907, p. 692; Code, § 5138), defining the meaning of terms used, appears as section 2 in the English bills of exchange act; the section stating what constitutes a "holder in due course" is numbered 52 in the Negotiable Instruments Law (Code, § 5007), but appears as section 29 in the bills of exchange act; while the provision of our statute as to when an instrument can be said to be negotiated is numbered as section 30 (Code, § 4985) and is designated as section 31 in the English statute. The sections of our statute as to delivery and filling up blanks are somewhat different from the English statute, due principally to the stamp law of that country, which is taken into consideration, and these provisions framed with due regard to it. The first clause of section 16 of the Negotiable Instruments Law (Code, § 4973) is the equivalent of section 84 of the bills of exchange act, providing that a note is inchoate and incomplete till delivery to the payee or bearer.

The first English case in point to which our attention is directed as the earliest decision of the courts of that country bearing directly on the proposition is that of Lewis v. Clay, L.J. [1898] 67 Q.B.D. 224, in which the Lord Chief Justice in rendering the judgment of the court flatly and pointedly construes sections of the English bills of exchange act of 1882 that are identical with those of our Negotiable Instruments Law of 1907, under consideration in this case, adversely to the contention of appellants. Quoting from the opinion of the Lord Chief Justice in that case:

"It will be apparent from a consideration of the facts of the case that the plaintiff was not a 'holder in due course' at all, but he was, in fact, simply the named payee of two promissory notes. Further an examination of sections 20, 21, 29, 30, and 38 [bills of exchange act], relating expressly to bills, and sections 83, 84, 88, and 89, relating to promissory notes, will make it quite clear that a 'holder in due course' is a person to whom, after its completion by and as between the immediate parties, the bill or note has been negotiated. In the present case the plaintiff is named as payee on the face of the promissory note, and therefore is one of the immediate parties. The promissory notes have, in fact, never been negotiated within the meaning of the act." (Italics supplied.)

The next of the English cases considering this question is that of Herdman v. Wheeler [1902] L.R. 1 K.B. 361, in which the issue before the court for determination turned on a construction of what constituted the "negotiation" of a stamped paper which was signed in blank with an authorization to fill it in for one amount and which was in breach of authority fraudulently filled in for a larger amount; and the named payee, having in good faith paid full value without notice of the breach of authority, brought suit on the note. The court held that the delivery of the note under such circumstances to the named payee was not a negotiation of the note within the meaning of applicable provisions of the bills of exchange act so as to entitle the plaintiff as payee to recover; in other words, a holding that the delivery to the plaintiff as payee did not constitute a negotiation of the note and left it subject to the same defenses as if it were nonnegotiable.

In this last-cited case (Herdman v. Wheeler, supra), the holding in Lewis v. Clay, supra, that the payee of a note cannot under any circumstances be a holder of it in due course is criticised as dictum and questioned. It is said, however, by the justice (Channell) in rendering the opinion of the court:

"On the whole, therefore, we are not prepared to hold that a payee of a note can never be a holder in due course; but it is, as it seems to us, just as unnecessary for us to decide that question as it was for the late Lord Chief Justice to do so in the case before him [referring to Lewis v. Clay]. The real point in the present case, after all, is: Can we hold that this note was 'negotiated' to the plaintiff within the meaning with which the words are used in the proviso to the twentieth section? And as to this, we certainly have the opinion of the late Lord Chief Justice [referring to the case of Lewis v.

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6 cases
  • Long v. Shafer
    • United States
    • Missouri Court of Appeals
    • December 12, 1914
    ...142, page 132; Daniel on Negotiable Instruments (6 Ed.), Vol. 2, sec. 1312, page 1478; Stone v. Goldberg & Lewis, 60 So. 744; Goldberg & Lewis v. Stone, 65 So. 454; Haddock Haddock, 85 N.E. 682.] In the case last cited this language appears: "There is no reason that we can conceive why the ......
  • Long v. Shafer
    • United States
    • Missouri Court of Appeals
    • December 12, 1914
    ...on Negotiable Instruments (6th Ed.) vol. 2, § 1312, p. 1478; Stone v. Goldberg & Lewis, 6 Ala. App. 249, 60 South. 744; Goldberg & Lewis v. Stone, 10 Ala. App. 485, 65 South. 454; Haddock v. Haddock, 192 N. Y. 499, 85 N. E. 682, 19 L. R. A. (N. S.) 136. In the case last cited this language ......
  • Metropolitan Life Ins. Co. v. Goodman
    • United States
    • Alabama Court of Appeals
    • May 12, 1914
  • Ex parte Goldberg & Lewis
    • United States
    • Alabama Supreme Court
    • December 17, 1914
    ...17, 1914 Certiorari to Court of Appeals. Petition for certiorari by Goldberg & Lewis to the Court of Appeals to review a judgment (10 Ala.App. 485, 65 So. 454) affirming judgment in an action by them against J.H. Stone and another. Judgment of Court of Appeals reversed and remanded. Browne,......
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