Kimbrough v. Hornsby

• Decision Date: 16 January 1905
• Citation: 84 S.W. 613,113 Tenn. 605
• Parties: KIMBROUGH et al. v. HORNSBY et al.
• Court: Tennessee Supreme Court

84 S.W. 613

113 Tenn. 605

KIMBROUGH et al. v. HORNSBY et al.

Supreme Court of Tennessee.

January 16, 1905

Appeal from Chancery Court, Meigs County; T. M. McConnell Chancellor.

Attachment proceeding by R. B. Kimbrough and others against S. J. & W F. Hornsby and W. D. Crabtree to collect an indebtedness owing by said Hornsby to plaintiff's debtor, said Crabtree, evidenced by a note, in which B. F. Hayes files a petition setting up his rights as purchaser of said note. From a decree by the Court of Chancery Appeals in favor of said Hayes, plaintiffs appeal. Affirmed.

McALISTER J.

The question presented for our determination upon this record is in respect of the title to a promissory note, and more especially whether a bona fide purchaser of the note, for value, before maturity, will acquire a superior right to that of an attaching creditor of the original payee.

The contest is between one B. F. Hayes, who purchased the note from Crabtree, the original payee, and Kimbrough et al., who are attaching creditors of Crabtree.

Complainants Kimbrough et al., on the 21st of October, 1901, filed their original attachment and injunction bill in the chancery court of Meigs county against S. J. & W. F. Hornsby and W. D Crabtree, for the purpose of collecting an alleged indebtedness due from the said Crabtree.

It is alleged in the bill that Crabtree was a nonresident of the state, and that complainants are informed he was a resident of the state of Texas. It is further alleged that defendants S. J. & W. F. Hornsby were indebted to the defendant W. D. Crabtree in the sum of $200 by a promissory note dated August 24, 1901, and due 12 months after date, for the sum of $200. An attachment was prayed against the property and estate of the defendant W. D. Crabtree, and there was a specific prayer for the attachment of the note in question. An injunction was also asked to restrain the defendants Hornsby from paying the note, and the defendant Crabtee from transferring it. An injunction accordingly issued, and was executed by reading the same to S. J. & W. F. Hornsby on the 22d of October, 1901. An attachment also issued on the 21st of October, 1901, and was returned by the sheriff on the 22d of October, 1901, with the following indorsement, viz.:

"Came to hand Oct. 22nd, 1901, and executed by making a search for the within described note, and it is not in my county to be found."

An amended return was made upon this attachment on May 2, 1904, which reads as follows:

"Came to hand Oct. 22, 1901, and executed by making search for the within described note, and same not being found, went to the residence of S. J. & W. F. Hornsby, reading the within attachment to both of them, and stating that I was seeking to attach the said note in their hands and reading the injunction to them and summoning them as commanded and I make this as an amended return this May 2, 1904."

An order of publication was made on October 25, 1901, for W. D. Crabtree. On December 4, 1901, S. J. & W. F. Hornsby filed an answer in the case, in which they say that on or about August 24, 1901, as charged in the bill, they executed a note to W. D. Crabtree; that the note was due 12 months after date, but was not due at the time of the filing of complainants' bill, and is not now due. These defendants have no knowledge of said note since its execution, and do not know who has the same. They cannot state whether it is in the possession of said W. D. Crabtree or not. Defendants, further answering, state that said note is a negotiable paper, not now due, and they ask to be protected as garnishees in the attachment of said note, under section 5255 of Shannon's Code. They further say they are advised and believe that complainants are not entitled to a judgment against them on said note unless the same is surrendered to them. Defendants further admit that their codefendant W. D. Crabtree is a nonresident of the state. After publication a decree pro confesso was taken against defendant Crabtree.

On the 3d of November, 1902, B. F. Hayes appeared by counsel and obtained leave to file a petition in the case, setting up his rights to the note in question.

He alleges that he is a citizen and resident of the state of Texas, and is the owner and holder of the note, which he files, and which is the note now in controversy. It reads as follows, viz.:

"$200.00. Aug. 24, 1901. Twelve months after date, we promise to pay to the order of W. D. Crabtree Two Hundred Dollars ($200.00) with interest at 6% per annum from Jan. 1, 1902, balance on land, value received. W. F. Hornsby, S. J. Hornsby."

This note is indorsed on its back by the original payee, W. D. Crabtree.

It is further averred in the petition that said Hayes is the owner of the note, having purchased it in due course of trade, long before its maturity, from the owner, then in the state of Texas, without any knowledge of the attachment and injunction and the bill filed in this case, and having paid full value therefor. He prayed that he be allowed to collect said note in this proceeding.

The original complainants, Kimbrough et al., filed an answer to this petition, in which they deny that Hayes was an innocent purchaser or bona fide holder of said note.

The Court of Chancery Appeals finds that the only controverted question of fact arising on the record is whether or not the said Hayes was a bona fide purchaser of the said note, for value, in due course of trade; and in respect of that question that court finds there is little, if any, conflict in the evidence. It finds as follows:

"It is shown in the testimony of B. F. Hayes, as to which there is no contradiction, that he is a citizen and resident of the state of Texas; that he first met W. D. Crabtree on or about the last of October or the first of November, 1901, in Bonham, Texas, at which time he bought from Crabtree the $200 note in question, and paid therefor the sum of $193. He states that he was induced to do this by reason of a letter to Crabtree by one Ferguson, a personal friend of his, in which Ferguson stated that the note was bona fide and perfectly good. The note at this time, as will be seen, was not due. It is a negotiable paper, and Hayes states that he knew nothing of any attachment suit or of any claims or equities against the note. And the Court of Chancery Appeals concludes that he was clearly an innocent purchaser and bona fide holder of the paper, bought in due course of trade, for value, and without any notice

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