Stone v. Colonial Credit Co.

• Court: Georgia Court of Appeals
• Writing for the Court: CARLISLE; GARDNER, P. J., and TOWNSEND
• Citation: Stone v. Colonial Credit Co., 93 Ga.App. 348, 91 S.E.2d 835 (Ga. App. 1956)
• Decision Date: 20 February 1956
• Docket Number: No. 2,No. 36078,36078,2
• Parties: Nathaniel STONE v. COLONIAL CREDIT COMPANY

Page 835

91 S.E.2d 835

93 Ga.App. 348

Nathaniel STONE v. COLONIAL CREDIT COMPANY.

No. 36078.

Court of Appeals of Georgia, Division No. 2.

Feb. 20, 1956.

C. G. Battle, Atlanta, for plaintiff in error.

Arnold Kaye & T. C. Little, Atlanta, for defendant in error. Syllabus Opinion by the Court.

CARLISLE, Judge.

1. 'Prior to the enactment in this state of the Uniform Negotiable-Instruments Law, it was the rule that, where a promissory note was payable to a named person or order, the holder other than the payee could not sue thereon in his own name where the note had not been indorsed or assigned in writing to him, and that suit could be brought only in the name of the original payee for the use of the transferee. Allen v. Commercial Credit Co., 155 Ga. 545, 117 S.E. 650. The indorsement or assignment in writing of the note was necessary to put the legal title in the holder. Benson v. Abbott, 95 Ga. 69, 22 S.E. 127; Burch v. Daniel, 101 Ga. 228, 28 S.E. 622; Id., 109 Ga. 256, 34 S.E. 310; Farris v. Wells, 68 Ga. 604; Herring v. First Nat. Bank, 13 Ga.App. 492, 79 S.E. 359. Thus, where a petition failed to allege or show such indorsement or assignment in writing, it was subject to dismissal on general demurrer. Allen v. Commercial Credit Co., supra [and cit.] But this rule was changed by the adoption of section 49 of the Negotiable-Instruments Law in the act of 1924 (Laws 1924, pp. 126, 136), embodied in * * * [Code, § 14-420], which provides as follows: 'Where the holder of an instrument payable to his order transfers it for value without indorsing it, the transfer vests in the transferee such title as the transferor had therein, and the transferee acquires, in addition, the right to have the indorsement of the transferor.' Such a transfer without indorsement, vesting the transferee with legal title, although not effective to render the transferee a holder in due course (* * * [Code, §§ 14-401, 14-507, 14-509]); Christie v. Bassford, 47 Ga.App. 94, 169 S.E. 687, 688(1), now permits the transferee to bring suit in his own name.' Folsom v. Continental Adjustment Corp., 48 Ga.App. 435, 172 S.E. 833, 834.

2. Where, under an application of the foregoing principles of law to th facts of a case, it appears from the allegations of the petition that the defendant executed a promissory note payable to a named company in which he promised to pay unconditionally a sum certain in money at fixed determinable dates, and it is alleged that the plaintiff, which holds the note without written indorsement financed the note and contract and is the transferee of the note and its holder in due course, and that there is a present unpaid balance due on the note which upon demand for payment had been refused,...