Landis v. White Bros.

• Decision Date: 28 January 1913
• Citation: 152 S.W. 1031,127 Tenn. 504
• Parties: LANDIS v. WHITE BROS.
• Court: Tennessee Supreme Court

152 S.W. 1031

127 Tenn. 504

LANDIS v. WHITE BROS.

Supreme Court of Tennessee.

January 28, 1913

Certiorari to Court of Civil Appeals.

Suit by W. H. Landis against White Bros. There was a decree of the chancery court for complainant, which was reversed by the Court of Civil Appeals, and the bill ordered dismissed, and complainant petitions for certiorari. Denied.

Solon L. Robinson, of Pikeville, for complainant.

Stewart & Stewart, of Dunlap, for defendant.

GREEN J.

This suit was brought by the complainant to recover on three promissory notes executed by White Bros. in favor of the Western Manufacturing Company of Minneapolis, and claimed to have been transferred in due course of trade by that company to the complainant, Landis.

The notes were given in payment for certain jewelry bought by the defendants of the Western Manufacturing Company. This jewelry was sold under a guaranty that it was rolled gold plate, and would last a certain length of time, and otherwise prove satisfactory to defendants' trade. It turned out to be worthless, and the defendants could not handle it at all. They made complaint to the Western Manufacturing Company, but that concern refused to make any adjustment of matters, and notified defendants that the notes had been transferred to a broker in Minneapolis. Suit was brought by this broker, the complainant, Landis, and he was given a decree against defendants by the chancellor. The Court of Civil Appeals reversed this decree and dismissed the bill.

The latter court based its decree on the fact that the notes sued on by Landis appeared to have been transferred to him without any indorsement by the Western Manufacturing Company.

Section 49 of the Negotiable Instruments Law, chapter 94 of the Acts of 1899, provided: "Where the holder of an instrument payable to his order transfers it for value without indorsing it, the transfer vests in the transferee such title as the transferror had therein, and the transferee acquires, in addition, the right to have the indorsement of the transferror. But for the purpose of determining whether the transferee is a holder in due course, the negotiation takes effect as of the time when the indorsement is actually made."

The Court of Civil Appeals properly found from the record in this case that the consideration for which the notes were given had failed, and that defendants could successfully have resisted payment thereof in a suit brought by the Western Manufacturing Company itself. Under the statute just quoted where the notes were transferred without indorsement, the transferee, the complainant here, stood in the same attitude in which the transferror would have stood, had the suit been brought by the latter.

A defense, good against the transferror, is likewise good against a transferee without indorsement. Complainant was therefore not entitled to any recovery. Marling v Fitzgerald, 138 Wis. 93,...