Young v. Harris-Cortner Co.

• Decision Date: 14 March 1925
• Citation: 268 S.W. 1120,152 Tenn. 34
• Parties: YOUNG v. HARRIS-CORTNER CO. ET AL.
• Court: Tennessee Supreme Court

268 S.W. 1120

152 Tenn. 34

YOUNG v. HARRIS-CORTNER CO. ET AL.

Supreme Court of Tennessee.

March 14, 1925

Certiorari to Court of Civil Appeals.

On petition for rehearing. Petition denied.

For former opinion, see 268 S.W. 125.

C. A Miller and H. E. Carter, both of Bolivar, for plaintiff.

J. T Rothrock, Jr., of Jackson, for defendants.

McKINNEY J.

It is said that, notwithstanding the false recitations in the receipts, the defendants are nevertheless holders in due course for value, since the evidence does not show that they acquired said receipts "dishonestly."

We can conceive how the defendants might have acquired these receipts in good faith, notwithstanding they knew that they contained false statements. Hence the bare abstract statement that the defendants did not acquire said receipts in good faith, because of their knowledge of their false recitations was not correct. But, when such false recitations are considered in connection with the other facts and circumstances of the cause, we concur with the Court of Civil Appeals in holding that they are not holders in due course for value. Bearing in mind that McNamee obtained said cotton and said receipts by fraud, and subsequently negotiated them to the defendants, by delivery, the burden was upon the defendants to show that they acquired said receipts honestly and that they are holders in due course for value. Bank v. Chatfield, 118 Tenn. 481, 101 S.W. 765, 10 L. R. A. (N. S.) 801; Fox v. Cortner, 145 Tenn. 485, 239 S.W. 1069, 22 A. L. R. 1341.

So far as defendants, Weil Bros., are concerned, they introduced no proof to sustain their claim of holder in due course for value.

As to the other defendants, the Court of Civil Appeals in its opinion said:

"The proof shows that Harris Cortner Company was a partnership composed of R. G. Cortner, at Decatur, Ala., R. N. Harris, Jr., Town Creek, Ala., H. B. Bynum, Courtland, Ala., and S. S. Fletcher, Huntsville, Ala. That company introduced only one witness, who was chief clerk for that defendant at Decatur, Ala., whose duties were to buy and sell cotton, pay for same, shipping and general supervision of books and detail work in the office at Decatur, Ala. He testified that his company purchased the eight bales of cotton from McNamee, and he filed the warehouse receipts as exhibits to his testimony; that samples of this cotton were sent to his company at Decatur together with other samples, and after they were examined he was telephoned the price which he accepted, and that he drew drafts on the company with the invoices and receipts attached, and that the drafts were paid by checks issued by the company; that he did not know whether he himself or Mr. Cortner telephoned, or bought the cotton over the telephone, and presumed that the invoices were mailed from Bolivar, or said he did not know of his own knowledge; that he did not remember whether he personally received the envelopes and opened the mail in which these invoices were received; that he did not remember when the invoices and samples were received, but that it was bought by sample. He further testifies that the drafts were paid on December 23d and 24th by checks given in the office of Harris Cortner Company, and that the drafts showed that they were payable to the order of the City National Bank; and that Harris Cortner Company had no notice that McNamee had not paid for same.

None of the partners went on the stand to show that they were bona fide purchasers for value without notice. It is clear from the testimony of the bookkeeper that he had gained most of his knowledge from the books and papers in the office of Harris Cortner Company, and his testimony shows that he does not remember whether he did the negotiating with McNamee or whether it was done through Mr. Cortner.

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