Pryor v. American Trust & Banking Co.

• Court: Georgia Court of Appeals
• Writing for the Court: WADE, J.
• Citation: Pryor v. American Trust & Banking Co., 15 Ga.App. 822, 84 S.E. 312 (Ga. App. 1915)
• Decision Date: 16 February 1915
• Docket Number: 5531,5532.
• Parties: PRYOR v. AMERICAN TRUST & BANKING CO. AMERICAN TRUST & BANKING CO. v. PRYOR.

84 S.E. 312

15 Ga.App. 822

PRYOR v. AMERICAN TRUST & BANKING CO.

AMERICAN TRUST & BANKING CO. v. PRYOR.

Nos. 5531, 5532.

Court of Appeals of Georgia

February 16, 1915

Syllabus by the Court.

A promissory note, payable to the order of the maker thereof and properly indorsed by him, is a negotiable instrument, and the holder is presumed to be such bona fide and for value and is protected from any defense set up by the maker acceptor, or indorser, except non est factum, gambling immoral and illegal consideration, or fraud in its procurement by the holder.

A motion or petition to vacate a judgment must show the existence of some statutory cause for setting it aside, or facts sufficient to warrant the court in taking such action in the exercise of its sound general discretion. The movant must not only show generally and inferentially, but by precise and specific averment, that he has been without fault, or has exercised due diligence, or, if negligent, that his negligence was excusable. "The motion must show that he has a good and meritorious defense to the action, not merely by so alleging, but by setting forth fully the facts which constitute the proposed defense, except in cases where the judgment is absolutely void, when no defense need be shown."

Where a motion to set aside a judgment fails to disclose the facts which constitute the defense, therein alleged to be "good and legal," by any definite allegations included therein, or contained in any "affidavit of merits" thereto attached as an exhibit, or even made a part of any ground of the motion by identifying reference thereto, the motion is incomplete and insufficient.

Additional Syllabus by Editorial Staff.

A "promissory note," within Civ. Code 1910, § 4270, defining a promissory note as "a written promise made by one or more to pay to another or order or bearer at a specified time a specified sum of money or other article of value," is a written promise "to pay to another, or to order or to bearer," and not merely a written promise "to pay to the order of another or bearer."

The "fraud in its procurement," which under Civ. Code 1910, § 4286, will enable the maker of a promissory note to avoid paying it in the hands of an innocent purchaser for value, means fraud on the part of the holder, and has no reference to fraud in the contract out of which the instrument arose.

"Holder" is a word of the same import as "bearer," and is applied to any one in actual or constructive possession of the bill, and entitled at law to recover or receive its contents from the parties to it (citing Words and Phrases, Holder).

Error from City Court of Leesburg; R. L. Greer, Judge.

Action by the American Trust & Banking Company against R. S. Pryor. Judgment for plaintiff, and defendant brings error, and plaintiff files cross-bill of exceptions. Reversed on cross-bill, and main bill of exceptions dismissed.

R. L. Maynard, of Americus, for plaintiff in error.

Peacock & Gardner, of Albany, for defendant in error.

WADE J.

The American Trust & Banking Company brought suit against R. S. Pryor on a promissory note, dated July 18, 1912, and due January 10, 1913, for the principal sum of $750, which was signed by him and by its terms made payable to "myself" and indorsed by him and by Smith & Connor. The defendant filed a plea denying generally the allegation of indebtedness in the declaration of the plaintiff, and setting up as an affirmative defense against the collection of the note various allegations of misrepresentation and fraud made to the defendant by Smith & Connor at the time the note was procured, and in order to induce the defendant to execute it--the representations being in reference to the value of stock in a certain corporation, for the purchase of which the note was executed and delivered to Smith & Connor, the agents of this corporation. The plea further set up that the defendant had "notified the plaintiff of the circumstances under which such note was given," but did not say when this notice was given to the plaintiff, nor by whom the notice was received on the part of the plaintiff and failed to show that the notice was given to the plaintiff before the purchase of the note. A demurrer to the plea as filed was interposed by the plaintiff, and when the demurrer came up at the proper time for argument the presiding judge declined to pass upon it on account of his possible disqualification, and the case went over, by express agreement, to the first day of a subsequent adjourned term of the court. Through some misunderstanding, the merits of which it is unnecessary to discuss under the view we take of the case, counsel for the defendant failed to be present on the first day of the adjourned term of the court when the case came up in its order, in accordance with the previous setting thereof for trial before a judge qualified to dispose of the case. The plaintiff insisted upon its demurrer, and after argument the court sustained the demurrer and dismissed the plea, and a judgment in behalf of the plaintiff for the amount of the note resulted. Later during the same day, counsel for the defendant appeared at the court and filed a motion to set aside the judgment, pleading in detail the misunderstanding and mistakes which had prevented his presence at the time the case was called in its order for trial, and making this sole additional allegation:

"Fifth. That your petitioner had a valid and legal defense to said action, and was then ready for the trial of said cause, that the trial of said cause proceeded in the absence of defendant's counsel through accident or mistake in the understanding between his said attorney and the attorney for plaintiff; and that on account of this mistake and misunderstanding said verdict and judgment should be vacated."

The plaintiff filed a demurrer on the general ground that the motion set forth no legal showing for the relief prayed, and on several special grounds touching the sufficiency of the showing as to diligence on the part of counsel for the movant, and also because the motion failed to disclose that there was any error in striking the original plea, since the plea itself was not set out, and failed to show that the "valid and legal" defense referred to in the motion was ever pleaded, and did not set out and specify wherein the alleged valid and legal defense lay. This demurrer was overruled, and the plaintiff filed exceptions pendente lite, and in its cross-bill of exceptions assigns error thereon.

The petition asking that the judgment be set aside was not verified, but was signed simply by the attorney for the movant. A rule nisi thereupon was issued by the presiding judge, requiring the plaintiff to show cause at a future date why the verdict and judgment should not be vacated. The hearing was had on the date fixed, and it appears from the bill of exceptions that the attorney for the movant then introduced an affidavit, made by himself, setting out in detail and with careful particularity facts leading to his failure to be present at the time and place of trial when the judgment was rendered. The bill of exceptions recites that the movant introduced as evidence the original petition of the plaintiff, on which the verdict and judgment complained of were based, the original plea filed by the defendant, which is a part of the record in the said case, and an amendment which he (the movant) " proposed to offer," which was sworn to by R. S. Pryor, and was as follows:

"First. That the plaintiff is not a bona fide purchaser for value of the note sued upon, without notice of the method used by Smith & Connor to make sale of stock of the Southern Finance Corporation; that the plaintiff, through its agents and officers, had at the time of the purchase of said notes due notice of the consideration of said note."

It does not appear from the record how this amendment which the movant "proposed to offer" was verified, whether as required by section 5640 of the Civil Code or not; but, waiving this point, it does not appear from any recitals in the bill of exceptions, or from any part of the record specified therein, that the amendment which the attorney for the movant introduced in evidence as being an amendment which was "proposed," was attached to or in any way made a part of the motion to set aside the judgment, or was even by words remotely referred to, and an effort thus made to incorporate it in the motion to vacate as an exhibit or component part thereof.

The plaintiff insisted that as the note sued upon was signed by Pryor and made payable to his own order, it was not a negotiable instrument, which would be free from attack in the hands of one who purchased it before due, for value, and without notice of any defects therein other than the notice brought home to the purchaser by the fact that the note was payable to the order of the maker. The note, as we have already said, was indorsed by the maker, R. S. Pryor, to whose order it was made payable, and was further indorsed by Smith & Connor, from whom it was obtained by the plaintiff.

Civil Code, § 4270, defines a promissory note to be:

"A written promise made by one or more to pay to another, or order, or bearer, at a specified time, a specific amount of money, or other articles of value."

The Code section does not declare that a promissory note is a written promise made by one or more "to pay to the order of another, or bearer," but explicitly says that such a note is a promise to pay to "another or order, or bearer," using the disjunctive conjunction between "another" and "or order," and between "or order" and "or bearer," which we may interpret to mean "to another, or to order or to bearer." A note payable to maker, "or order," would come exactly within the...