Spring v. Major
| Decision Date | 21 June 1927 |
| Docket Number | 16733. |
| Citation | 260 P. 763,127 Okla. 279,1927 OK 174 |
| Parties | SPRING v. MAJOR. |
| Court | Oklahoma Supreme Court |
Rehearing Denied Nov. 8, 1927.
Syllabus by the Court.
Under the provisions of the Negotiable Instrument Law [1] of this state, a promissory note, negotiable at the time it was made, remains negotiable until it is discharged or until it is restrictively indorsed.
Under the Negotiable Instrument Law, [1] a restrictive indorsement is (1) one which prohibits further negotiation; (2) constitutes the indorsee the agent for the indorser; or (3) vests the title in the indorsee in trust for or to the use of some other person.
In this state an indorsement of a negotiable promissory note transferring the note and all the interest of the indorser together with the mortgage securing the same without recourse, is not a "restrictive indorsement," and does not affect the negotiability of the instrument.
Where a negotiable promissory note is transferred on the due date by the payee for full value to a purchaser in good faith without notice of any infirmity in the title of his indorser, the purchaser becomes a "holder in due course," and the note in his hands is not subject to any equities existing between the prior parties.
Where in an action before the court, without a jury, by an indorsee of a negotiable promissory note against an accommodation maker, where the evidence shows that plaintiff bought the note in good faith and for full value before same was overdue, and without notice of dishonor or any infirmity in the title, and where a copy of the instrument is attached to the petition and defendant files an unverified answer setting up (1) a general denial, (2) a denial of indebtedness, (3) that defendant is not advised as to whether or not plaintiff is the owner of the note sued on, (4) that plaintiff waived collateral sufficient to pay the note, (5) that plaintiff extended time without notice, (6) that the principal maker of the note, or its receiver, collected moneys which should have been, but were not, applied on the note, (7) that plaintiff was sole legatee of another accommodation maker whose estate should be made to contribute, and where the proof shows that such estate was insolvent, and his personal representative was not made a party to the suit, no substantial issue of fact is raised except as to the amount due on the note, and it is therefore the duty of the court to ascertain the amount and render judgment therefor to plaintiffs, and it is error for the court, upon such allegations and proof, to provide in said judgment that the same shall be discharged upon the payment of one-half thereof, upon the theory that the estate of the deceased accommodation maker should contribute such proportion, and that therefore this sum should be chargeable to and against the plaintiff, as his sole legatee.
Additional Syllabus by Editorial Staff.
Under Comp. St. 1921, § 287, in action on note, copy of which was attached to petition, unverified answer held to raise no issue as to execution.
Note payable to order of designated corporation having other proper characteristics held "negotiable instrument," under Comp. St. 1921, § 7671.
Commissioner's Opinion.
Appeal from District Court, Jefferson County; M. W. Pugh, Judge.
Action by Janie B. Major against Earl Spring, to recover upon a note. From judgment for plaintiff for one-half the amount of the note and that Earl Spring was entitled to contribution from plaintiff to the extent of one-half the judgment, both parties appeal. Reversed and remanded, with directions.
Bailey & Hammerly, of Chickasha, for plaintiff in error.
Bond Melton & Melton, of Chickasha, for defendant in error.
This was a civil action tried without a jury before the district court of Jefferson county, and the parties will be designated as they appeared below.
There was a judgment for plaintiff against Earl Spring for $3,578.28, with interest thereon from and after the 3d day of October, 1924, at the rate of 10 per cent, per annum, together with attorneys' fees in the sum of 10 per cent. of the amount of said judgment, same being the balance due on a promissory note sued on in said action, but this judgment further provided that Earl Spring was entitled to contribution from plaintiff in the sum of one-half the amount of said judgment, and that, upon the payment of one-half of said sum, said judgment against the defendant would be discharged in full.
Plaintiff and defendant each excepted, filed motions for new trial, and, the same being overruled, lodged in this court petition in error and cross-petition in error, and their several contentions will be considered together.
Plaintiff's action was based upon a promissory note, a copy of which was attached to the petition, which was couched in appropriate terms, and alleging, among other things, that on the 1st day of October, 1916, for a good and valuable and sufficient consideration, the Ryan Cotton Oil Company, L. D. Major, A. A. Spring, and Earl Spring, made, executed, and delivered to Union Trust Company their certain first mortgage bond and note for $8,500; that same matured April 1, 1921, and that on said date the makers were unable to pay the same and said note was by the payee sold and indorsed to plaintiff, who is now the owner and holder of the same for value, and that the balance due upon said note, after deducting proper credits, amounts to $4,233.78, no part of which has been paid.
The note in question, together with the indorsement thereon, is in the following words and figures:
Indorsed on back:
The answer of the defendant is: First, a general denial; second, that defendant is not indebted to plaintiff; third, that defendant was not advised as to whether or not the plaintiff was the owner of the note sued on; fourth, that plaintiff waived collateral sufficient to pay the note; fifth, that plaintiff extended time to the principal maker without notice to defendant; (6) that Ryan Cotton Oil Company or its receiver received money that should have been applied upon the note; (7) that plaintiff was the sole legatee or L. D. Major, a comaker, and that his estate should contribute, and that therefore his sole legatee should pay one-half of the liability.
A proper reply containing a specific denial of each defense set up by defendant was filed by plaintiff.
The sufficient answer to defenses 1 to 3 above is that the defendant's unverified answer raises no issue as to the execution of the note, and the legal effect is to place the instrument, with all its contents, terms, conditions, and stipulations therein expressed, together with their legal consequences, before the court. St. Louis & S. F. R. Co. v. Driggers et al., 65 Okl. 297, 166 P. 703; St. Louis & S. F. R. Co. v. Bruner, 52 Okl. 349, 152 P. 1103; St. Louis & S. F. R. Co. v. Bondies & Co., 64 Okl. 88, 166 P. 179; Missouri R. Ft. S. & G. R. Co. v. James Wilson, 10 Kan. 105, and cases cited. See, also, section 4759, Rev. Laws 1910; section 287, C. O. S. 1921, and cases cited.
A complete answer to defenses 4 and 6 is that they are not supported by any evidence.
This leaves for our consideration the defense numbered 5, involving the extension of time, and defense No. 7, involving the question of contribution by plaintiff. These questions should be discussed, not only in the light of the pleadings as above outlined, but in the light of the evidence in the case, and for that purpose the full substance of the testimony will be given.
Janie B. Major, plaintiff, testified:
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