Steeg v. Codifer

• Decision Date: 01 December 1924
• Docket Number: 24873
• Citation: 102 So. 407,157 La. 298
• Court: Louisiana Supreme Court
• Parties: STEEG v. CODIFER

102 So. 407

157 La. 298

STEEG v. CODIFER

No. 24873

Supreme Court of Louisiana

December 1, 1924

Appeal from Civil District Court, Parish of Orleans; Porter Parker Judge.

Suit by Aaron Steeg against Joseph S. Codifer upon death of whom before judgment, his executors were joined. Judgment for plaintiff, and defendant succession appeals suspensively, and plaintiff prays for amendment of judgment.

Judgment amended and affirmed.

Hugh S Suthon and Fred Zengel, Jr., both of New Orleans, for appellant.

Benjamin Y. Wolf, of New Orleans, for appellee.

OPINION

ROGERS, J.

Plaintiff, as the holder for value before maturity, brought this suit to recover $ 3,200, the amount of seven promissory notes, interest, and attorney's fees. The notes were made by defendant to the order of the Gerson Realty Company, Inc., financial agents.

Defendant answered, admitting that plaintiff "may be the holder" of the notes, but denied that he had acquired them in due course for value and before maturity. He averred that the notes were issued by him in payment of stock to the value of $ 4,000 in the St. Mary Co-operative Farm & Orchard Association upon fraudulent misrepresentations of H. S. Gerson, the general manager of said association. He alleged that the Gerson Realty Company, Inc., had borrowed $ 2,500 from plaintiff, in consideration for which Gerson caused to be issued to plaintiff $ 6,000 worth of stock in said St. Mary Co-operative Farm & Orchard Association, and, as apparently an auxiliary security, that said realty company would sell at par for account of plaintiff $ 2,500 of this stock and thus repay the loan; said realty company further pledged to plaintiff the notes of defendant, which the general manager of said realty company had obtained through fraud. He set up that the real consideration of the loan by plaintiff to the realty company was the transfer to him of the $ 6,000 of stock in St. Mary Co-operative Farm & Orchard Association, and that the pledge of said notes was for the purpose of defeating the defense which defendant could urge against their enforcement. He averred that in the light of the facts surrounding the negotiation by pledge of the said notes, plaintiff is not prima facie a holder in due course as defined in section 52 of Act 64 of 1904 (the Negotiable Instrument Act); but that, under section 59 of said act, the burden is upon plaintiff to prove his title.

After the submission of the cause, but before judgment was rendered in the court below, defendant died, and his executors were made parties to the pending suit.

The court below rendered judgment in favor of plaintiff, and against the executors of the succession of Joseph S. Codifer in the sum of $ 2,450, with 5 per cent. per annum interest thereon from August 16, 1915, until paid, together with 10 per cent. on principal and interest as attorney's fees and costs.

The defendant succession appealed suspensively from said judgment, and plaintiff has answered the appeal praying for an amendment of the judgment so asto award him full amount for which he sued.

On the trial of the case, plaintiff's counsel objected to the admission of any testimony on the general ground that defendant had admitted in his answer that plaintiff was the holder in due course for value and before maturity of the notes sued on. The objection was overruled by the district judge. We think this ruling was correct. The answer, construed as a whole, admitted that plaintiff was the holder of the notes, but it expressly denied that he had acquired them in due course before maturity and for value; and then proceeded to show by averments wherein defendant impugned plaintiff's title to the notes as not being bona fide.

Counsel for plaintiff also objected to the admission of any testimony against plaintiff's claim up to the sum of $ 2,500, which amount, admittedly, had been advanced by plaintiff prior to the maturity of the notes, and as to which amount plaintiff was presumed to be a holder in due course. This objection was referred to the merits. Its discussion, therefore, is involved in the consideration of the merits of the case.

It is undisputed that the notes sued on were pledged to plaintiff in accordance with the following agreement, viz.:

"Received from the Gerson Realty Company, Inc., the following notes, which said notes have been pledged to me by the Gerson Realty Company as security, that they will sell for me at par stock to the amount of $ 2,500 in the St. Mary Co-operative Farm & Orchard Association, Inc.

"Seven notes of J. S. Codifer, dated New Orleans, La., June 9, 1915, one payable 90 days after date, for $ 200; the other six for $ 500 each, payable respectively 6, 12, 18, 24, 36 months after date. [Then follows the description of the notes of four other persons, aggregating $ 1,800.]

"All of which notes are payable to the order of the Gerson Realty Company, Inc., financial agents.

"I agree to hold these notes in pledge until the entire amount of the above designated stock is sold and paid for. I further agree that as said stock is sold and payment therein made to me, whether all be sold at one time or on different occasions, I will surrender notes pledged to me up to the amount of payments made. I will hold the remaining portion of said notes until the entire stock is paid for, at which time I will surrender all of the said notes which may be left in my possession.

"New Orleans, La., August 16, 1915.

"[Signed] A. Steeg."

The Gerson Realty Company, Inc., failed to sell $ 2,500 of plaintiff's stock in the St. Mary Co-operative Farm & Orchard Association, Inc., and repay him the $ 2,500 which he had advanced, and which was secured by the aforesaid pledge, hence the present suit to enforce payment of defendant's notes.

It is shown by the evidence in the record that Codifer, the defendant, executed the notes sued upon, and subscribed to the stock for which said notes were given upon the representations, orally and in writing, of Gerson as general manager of the St. Mary Co-operative Farm & Orchard Association, that he, Codifer, was to be placed on the board of directors of said association, and to be made assistant general manager thereof, at a salary of...