H.T. Woodall & Son v. People's Nat. Bank of Leesburg, Va.

• Decision Date: 02 July 1907
• Citation: 153 Ala. 576,45 So. 194
• Parties: H. T. WOODALL & SON v. PEOPLE'S NAT. BANK OF LEESBURG, VA.
• Court: Alabama Supreme Court

45 So. 194

153 Ala. 576

H. T. WOODALL & SON v. PEOPLE'S NAT. BANK OF LEESBURG, VA.

Supreme Court of Alabama

July 2, 1907

Rehearing Denied Dec. 19, 1907.

Appeal from Circuit Court, Chambers County; S. L. Brewer, Judge.

Action by the People's National Bank of Leesburg, Va., against H. T. Woodall & Son, on bills of exchange. Judgment for plaintiff, and defendants appeal. Reversed and remanded.

Armstead Brown, for appellants.

E. M Oliver, for appellee.

HARALSON J.

There is no merit in the demurrers to the complaint. The institution of a suit in a court of this state by a foreign corporation is not an act of business therein, and may be done without having a place of business or an agent in this state. The mere fact of drawing notes or bills by such a corporation does not imply the transaction of business in the state. Cook v. Rome B. Co., 98 Ala. 409, 12 So. 918.

The two drafts sued on might well have been described in one count. Bird v. Daniel, 9 Ala. 302; Code 1896, § 3292.

The bills or drafts in this case were each dated May 12, 1904 one payable June 1, and the other December 1, 1904. They are both alike as to amount, and differ only as to the date of payment. The first is as follows:

"$73.00

Atlanta, Ga., May 12, 1904.

"June 1/05, pay to the order of the Southern Wholesale Jewelry Co. seventy-three dollars, value received, and charge to the account of

"Southern Wholesale Jewelry Co.,

"By O. P. Linebury, Treasurer.

"To H. T. Woodall & Son, Milltown, Ala."

Written across the face is: "Accepted 5--12--04. Payable Roanoke, Ala. H. T. Woodall & Son." Indorsed on the back are the words: "Southern Wholesale Jewelry Co., O. P. Linebury, Treas. Transferred to the People's National Bank, for value received, this 27th day of May, 1904. [ Signed] Southern Wholesale Jewelry Co., by W. E. Britt, Pres. No response."

These drafts were bills of exchange. As was said in Anderson v. Jones, 102 Ala. 538, 14 So. 871, of a similar paper: "The order was in writing. It was drawn by one person upon another, payable in money to a designated payee, not out of any special fund, but generally, for a specific amount. * * * It has every characteristic of a bill of exchange, and we think comes within the purview of the statute." 4 A. & E. E. Law (2d Ed.) 76.

The defendant pleaded five pleas, the first, the general issue; the second, want of consideration, the third and fourth, fraud in the procurement of the notes sued on, and the fifth, failure of consideration.

The judgment entry recites, that issue was joined on these pleas. But replications, as is therein stated, were filed to pleas 2, 3, and 5 (none to the 4th), and rejoinders to replications 2, 3, and 4, and issue was joined on replications to pleas 2, 3, and 5, and on the third rejoinder to replications 2, 3, and 4.

The replications to pleas 2, 3, and 5 were, in substance, that plaintiff in the usual course of business, before the papers sued on were due, became the purchaser of said papers for a valuable consideration, without notice of the alleged want of consideration in the same, without notice of any defense to the same, and of any of the transactions alleged in said pleas. Issue was joined on these replications, as the judgment entry recites.

The defendant rejoined to replications 2, 3, and 4, first, by denying the truth of the replications; second, that plaintiff discounted and acquired said drafts, with the understanding that if the same were not paid, that the Southern Wholesale Jewelry Company should take up and pay the same, and third, that said bank did not make an absolute and bona fide purchase of said instruments, but said purchase was a conditional one.

The sum and substance of all this much pleading was, that the bank suing on these notes, and the transferee of the same, was not a bona fide purchaser of them for value, without notice of the alleged infirmity in them for fraud in their execution.

Plea 4, upon which issue was joined by plaintiff, sets up fraudulent representations by the original payee, by which the defendant was induced to sign the bills or drafts, and presents, prima facie, a good defense, and puts on plaintiff to reply that he purchased the bills in good faith for value, before maturity, and without notice of the alleged infirmity. Ala. Nat. Bank v. Halsey, 109 Ala. 196, 19 So. 522.

"It is a principle of general recognition, that a purchaser of commercial paper in the usual course of business, before its maturity, for a valuable consideration, having no notice of defenses that existed between the original parties, or have subsequently arisen, is a 'bona fide holder for value,' and, as such takes the instrument free from defenses which were available between the original parties. Randolph on Com. Paper, § 14; 2 Daniel on ...