Webb v. Rice
| Citation | 132 Miss. 668,97 So. 419 |
| Decision Date | 04 June 1923 |
| Docket Number | 23356 |
| Court | United States State Supreme Court of Mississippi |
| Parties | WEBB et al. v. RICE |
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.
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 & 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 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 Co., 23 L.Ed. 920, in which case the supreme court of the United States held this question was immaterial. See Carter v. Burr, 28 L.Ed. 1147; McDonnell v. Burns, 83 F. 866.
Therefore, upon the record and the authorities herein cited, the learned chancellor not only did not commit any errors, but his findings both of law and fact were and are eminently correct, and the decree herein rendered in this case should not be disturbed.
Argued orally for appellants by R. C. McBee and for appellee by A. J. McLaurin.
The appellants W. H. Webb and A. E. Jennings sold certain lands to one P. J. Givens for a cash payment of eleven thousand dollars and deferred payments evidenced by different notes for the balance. The note in controversy was for ten thousand dollars and was due January 1, 1920. A deed of trust was taken upon the lands conveyed to secure the deferred payments. In December, 1918, Givens conveyed to A. H. Smith, J. P. McMullen, and O. A. Stepherson for an advance consideration and the assumption by Smith, McMullen and Stepherson of the notes of Webb and Jennings. One of the notes given by Smith, McMullen, and Stepherson passed to the ownership of the appellants and amounted to five thousand, eight hundred and thirty-three dollars and thirty-three cents and became due on January 1, 1920. The note in controversy given by Givens to Webb and Jennings for ten thousand dollars became due on the same date. Some time prior to January 1, 1920, Webb and Jennings sent these notes to the People's Bank of Sumner for collection. The note from Givens to Webb and Jennings was indorsed by them in blank some time prior to the notes being sent to the People's Bank of Sumner, the notes being sent for collection, but there was nothing to qualify the indorsement of Webb and Jennings written on the back of the ten thousand dollar note given by Givens to them. This note was not paid on the 1st of January, 1920, and on the 6th of January, 1920, appellant Webb called the People's Bank of Sumner on the telephone and inquired as to whether the note had been collected and was informed by Mr. Paul, assistant cashier of the bank, as to the status, and was informed that the note had not been collected but that it was in process of collection. Mr. Webb then notified Mr. Paul that the note must be collected immediately or protested and returned. On the following day, January 7th, the appellee, Mrs. Rice, paid to the People's Bank of Sumner the amount of the note and interest, and the note was delivered to her but not marked paid, nor was anything marked on the note to indicate whether it was a sale or a payment. The People's Bank of Sumner placed this money to the credit of the appellants and sent a deposit slip without any letter of explanation to Webb and Jennings, inclosing some of their papers belonging to Webb and Jennings, but making no statement as to how the note had been disposed of or handled.
In March, 1921, the appellee, Mrs. Rice, filed her bill in the chancery court claiming to be the purchaser of the ten thousand dollar note above mentioned, claiming that she had paid full face value thereof and had acquired the same in good faith in due course of trade, and that she is now the owner and holder thereof, and that said note was indorsed in blank by the defendants Webb and Jennings, who she alleges are liable as endorsers...
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