Webb v. Rice, 23356

• Court: United States State Supreme Court of Mississippi
• Citation: 132 Miss. 668,97 So. 419
• Decision Date: 04 June 1923
• Docket Number: 23356
• Parties: WEBB et al. v. RICE

97 So. 419

132 Miss. 668

WEBB et al.
v.
RICE

No. 23356

Supreme Court of Mississippi

June 4, 1923

Division B

Suggestion of Error Overruled. Sept. 17, 1923.

APPEAL from chancery court of Tallahatchie county, HON. G. E. WILLIAMS, Chancellor.

Suit by Mrs. M. M. Rice against W. H. Webb and another. From a judgment for plaintiff, defendants appeal. Reversed and remanded.

Judgment reversed, and cause remanded.

[132 Miss. 669] R. C. McBee, for appellants.

1. The complainant, having acquired the note sued on after it was due, was not a holder in due course. Sections 2630, 2661, 2608, and 2769, Hemingway's Code; 8 Corpus Juris, 345 and 346; Holmes Bros. v. McCall, 114 Miss. 157, 74 So. 786; Muller v. Pondir, 55 N.Y. 325, 14 A. R. 259.

2. The complainant, having taken the note after it was past due, acquired only such rights therein as the bank had, which was to collect the note and remit the proceeds to the defendant, W. H. Webb. Combs v. Hodge, 21 Howard, 397, 16 L.Ed. 115; Norton on Bills and Notes, 202; Daniels Negotiable Instruments, section 724-A; 8 Corpus Juris, 389; Mitford v. Wallicott, 1 Salk. 129; Brown v. Davis, 3 T. R. 80; 4 A. & E. Enc. of Law, 3131; T. H. & M. Allen & Co. v. Bratton, 47 Miss. 119-130; Ethridge v. Gallagher, 55 Miss. 458; Cussen v. Brandt, 97 Va. 1, 75 A. S. R. 762; Sections 2593, 2594 Hemingway's Code.

3. Was complainant entitled to share in the proceeds of the sale of the lands sued on as prayed for in her bill, and was she entitled to a decree condemning the lands to be sold? Foley, Avery & Co. v. Smith, 6 Wallace, 492, 18 L.Ed. 931; Ashurst v. Bank of Australia, 37 Eng. Law [132 Miss. 670] & Eq. 195; Livermore v. Blood, 40 Mo. 48; Texas v. White, 7 Wall. (U.S.) 68, (19 L.Ed. 227); Texas v. Hardenberg, 10 Wall. (U.S.), 19 L.Ed. 839; Ethridge v. Gallagher, 55 Miss. 458.

4. Does the record show a valid and lawful consideration for the transfer of the note from the People's Bank to the complainant? Section 869, Hemingway's Code; 8 Corpus Juris, 243; Bank of Hickory v. McPherson, 102 Miss. 852-865, 59 So. 934; Montjoy v. Delta Bank, 76 Miss. 402, 24 So. 870; Bohn v. Lowry, 77 Miss. 424, 27 So. 604; Sections 2630 and 2634, Hemingway's Code; Union National Bank v. Neal, 149 F. 711, 10 L. R. A. (N. S.); 8 Corpus Juris, 496 and 505; Goodman v. Simonds, 20 How. 343-366, 15 L.Ed. 934; Mee v. Carlson, 22 S.D. , 117 N.W. 133, 29 L. R. A. (N. S.) 351; Eckert v. Searcy, 114 Miss. 12-153, 74 So. 818; Jones v. Gordon, 2 App. Cases, 616, 4 E. R. C. 416.

5. The payment of the amount of the face of the note to the People's Bank, who held the same for collection, was a payment of the note. Lancey v. Clark, 64 N.Y. 209, 212; Collins v. Adams Ex'rs., 53 Vt. 433; Bank of Lay, 80 Va. 436; Moran v. Abbey, 63 Cal. 56; Fidelity Ins. Trust & Safe Deposit Co. v. West Penn. & S. C. R. Co., 138 Pa. St. 494; 21 A. 21; Martin v. Trust Co. (Tenn. Sup.), 28 S.W. 1097; Wood v. Safe Deposit Co., 128 U.S. 416-424, 9 S.Ct. 131; Ferree v. New York Security & Trust Co., 74 F. 771; Purnell v. Gillespie, 88 So. 637; Hawkins v. Shields, 100 Miss. 739-750.

6. The cross-bill of defendants seeking to cancel the note sued on should have been sustained.

May, Sanders & McLaurin, for appellee.

The principle governing this case is stated in 8 Corpus Juris, 792 and 793. In the case of Hall v. Box, 94 So. 221, Judge ETHRIDGE, quoted to approve the above sections, containing in part this language: "Whenever [132 Miss. 671] one of two innocent persons must suffer by the acts of a third person, he who has enabled such third person to occasion the loss, must sustain it." See R. C. L., pages 998-999, sections 208 and 209. Marlar v. Smith et al. 89 So. 667, holds that our negotiable instrument law, section 2627, Hemingway's Code, "is not applicable to a suit on a note payable to bearer." A note so payable is negotiable by delivery and needs no endorsement. That is exactly the state of the case here presented. The rule for determining the question as to whether a note has been paid or purchased was declared by this Honorable court in the case of Purnell v. Gillespie, 88 So. 637.

It is further contended that appellee is not entitled to the protection of a bona-fide purchaser, because the note was not delivered to her by the bank until some six or seven days after its maturity. This contention has been ruled adversely to appellants in the case of Hawkins v. Shields, 100 Miss. 733, 57 So. 4. See also Calhoun v. Ainsworth, 176 S.W. 316, 1915 E, L. R. A. (N. S.) 395; 2 Daniel on Negotiable Instruments (6 Ed.), sec. 1233 A; Davis v. Miller, 14 Gratt. 1; Johnson v. Schnabaum, 109 S.W. 1163, 17 L. R. A. (N. S.), 838.

We have heretofore called the court's attention to the fact that no defenses to the note exist and none were asserted. There were no equities between the parties. The sole question is one of title to the note in question; or, in other words, whether it has been paid or purchased, and the only competent evidence shows a purchase and not a payment. The negligence of the endorsers in failing to limit or restrict their endorsement; the negligence or mismanagement of their agent, the People's Bank, cannot be visited upon appellee, and the appellants are estopped to make or maintain the contention that the bank did not have the power to negotiate the note. There is not a particle of testimony in the record to contradict appellee's testimony that she agreed to purchase this note, in good faith, before its maturity, for full value, and that the only reason the transaction was not completed before the maturity of the note, was the rush of business in the bank at that particular time.

Cutrer, Smith & Cutrer, also for appellee.

The question of whether payment of money for a note is a payment of a note, or the purchase of a note, is a question of the intention of the party who purchases the note, where the party who puts up the money is a stranger to the transaction, and is not obligated in any way to pay the note. 8 Corp. Jur. 588; 3 R. C. L. 1287; Johnson v. Schnabaum, 17 L. R. A. (N. S.) 838; Interstate Trust & Banking Co. v. Irwin (La.), 70 So. 313; Wing v. Union Central Life Ins. Co., 181 Mo.App. 381, 168 S.W. 917.

As we view the question, it is immaterial under the facts of this case, whether the note was purchased before or after maturity, and in substantiation of this point, we refer the court to the case of Dodge v. Freedman's Saving & Trust...