State Banking Co. v. Morgan
| Decision Date | 25 June 1923 |
| Docket Number | 13978. |
| Citation | 118 S.E. 415,30 Ga.App. 430 |
| Parties | STATE BANKING CO. v. MORGAN. |
| Court | Georgia Court of Appeals |
Syllabus by the Court.
"The fact that the consideration of a note is set forth on its face, does not carry with it notice of the failure of consideration, if it has failed, to a person taking it bona fide; nor is he ipso facto put upon inquiry, and bound to inquire whether the consideration has failed." Bank of Commerce v. Barrett, 38 Ga. 126, 95 Am.Dec. 384.
Failure of consideration cannot be set up as a defense to an action upon a negotiable promissory note by an indorsee taking for value, before maturity, and without notice.
Where a negotiable promissory note was indorsed by the payee to the plaintiff, in the absence of proof to the contrary the law will presume that the plaintiff took before maturity, for value and without notice.
A promissory note in other respects negotiable does not lose its negotiable character by reason of a recital therein of its "having been given to [the payee] as per contract for" certain property described.
Such recital without more is insufficient to charge an indorsee with notice of a failure of consideration of the note, and a plea which charged that the plaintiff had notice of the equities between the original parties to the note merely by virtue of the recital was insufficient to let in the defense of a failure of consideration, and should have been stricken on motion.
There being upon the trial no evidence of such notice in the plaintiff, other than the fact of the recital above mentioned, the verdict in favor of the defendant was unwarranted, and the court erred in overruling the plaintiff's motion for a new trial.
Error from Superior Court, Jackson County; Blanton Fortson, Judge.
Action by the State Banking Company against A. J. Morgan and others. Judgment for the defendant named, and plaintiff brings error. Reversed.
C. L Bryson, of Jefferson, and Ed Quillian and J. O. Adams, both of Gainesville, for plaintiff in error.
Cooley & Beall, of Jefferson, for defendant in error.
BELL J. (after stating the facts as above).
Plaintiff's motion for a new trial contained a number of special grounds but these are treated as abandoned, no reference being made thereto in its brief. The sole question for determination is whether the recital in the mstrument sued on:
was sufficient in itself to put the plaintiff as an indorsee upon notice of any equities existing between the original parties to the note. Clearly the plea did not attempt to charge that the plaintiff had notice in any other way, and this was true also of the evidence introduced upon the trial.
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