Malcomb v. Robinson

• Decision Date: 09 May 1935
• Docket Number: 4 Div. 782
• Citation: 230 Ala. 474,161 So. 510
• Parties: MALCOMB v. ROBINSON et al.
• Court: Alabama Supreme Court

161 So. 510

230 Ala. 474

MALCOMB v. ROBINSON et al.

4 Div. 782

Supreme Court of Alabama

May 9, 1935

Rehearing Denied June 6, 1935

Appeal from Circuit Court, Covington County; Emmet S. Thigpen Judge.

Action on promissory note by M.A. Malcomb, as executor of the estate of William L. Malcomb, deceased, against J.M. Robinson and others. From a judgment for defendants, plaintiff appeals.

Affirmed.

E.O Baldwin, of Andalusia, for appellant.

W.O Mulkey, of Geneva, and A.R. Powell, of Andalusia, for appellees.

BROWN Justice.

This action is by the personal representative of William L Malcomb, deceased, against J.M. Robinson and L.M. Milligan, as administrator de bonis non of the estate of D.A. McRainey, on a promissory note executed by the Benson Hardware Company, a corporation, and indorsed, before delivery, by O.L. Benson, J.M. Robinson, and D.A. McRainey.

The defendants pleaded the general issue, in short by consent, with leave to give in evidence any matter that would constitute a defense to the action, with like leave to plaintiff to offer evidence in reply. This "opened the door" to special defenses, not required to be presented by sworn plea. Green et al. v. Marlin et al., 219 Ala. 27, 121 So. 19; Security Finance Co. v. Kelly's Tire Shop et al., 216 Ala. 642, 114 So. 298.

The defenses asserted by the defendants were, first, that the signatures of Robinson and McRainey were placed on the note as indorsers upon the condition that the maker would secure the indorsement thereon of the McArten heirs who were interested as stockholders in the corporation, and that said note was delivered without procuring the indorsement of said heirs in violation of this condition; second, that by a binding agreement made between the maker, Benson Hardware Company, and the payee, Malcomb, the time of payment of the note was extended, or the right of the holders to enforce the instrument was postponed without the assent of Robinson and McRainey. Code 1923, § 9140.

Appellant's first insistence is that the court erred in permitting defendants to introduce evidence going to sustain the first stated defense, over his objection; that the payee was not present at the time of said indorsement and the conversation between the defendants and the parties procuring their indorsement; and it was not shown that the payee knew anything about such conversation or condition, and the testimony was incompetent, irrelevant, illegal, and immaterial.

It is the settled law in Alabama that a payee who acquires a negotiable promissory note in due course of business and for value is a holder in due course. Ex parte Goldberg & Lewis, 191 Ala. 356, 67 So. 839, L.R.A.1915F, 1157; Green, Superintendent of Banks v. Martin, 222 Ala. 356, 132 So. 882.

And, one in possession as a holder "is presumed by the law merchant to be a holder in due course, that is, before maturity, for value, in good faith, without notice of defenses, and in the regular course of business, so as to put the burden on defendant to show that plaintiff is not a bona fide holder in due course." 8 C.J. pages 981, 982, § 1289; First National Bank v. Dawson, 78 Ala. 67; Lehman Brothers v. Tallassee Manufacturing Company, 64 Ala. 567. "This rule is reiterated by the Negotiable Instruments Law which provides that every holder is deemed prima facie to be a holder in due course." 8 C.J. pp. 981, 982, § 1289; Bruce v. Citizens' National Bank, 185 Ala. 221, 64 So. 82.

To cut off the first defense asserted by the defendants, it was incumbent on the plaintiff to show that the note in suit was within the protection of the Negotiable Instruments Law, and that he was a holder in due course. Somerall et al. v. Citizens' Bank, 211 Ala. 630, 101 So. 429.

While it appears from the bill of exceptions that the note was in evidence when the testimony objected to was offered by the defendants, the note does not appear in the bill of exceptions, and the description thereof in the bill of exceptions...