#### FEDERAL RESERVE BANK OF RICHMOND, VA., v. G. W. WHITFORD, MAMIE WHITFORD, STEPHEN WHITFORD, JOHN WHITFORD, and N. T. WHITFORD.

(Filed 31 October, 1934.)

1. Bills and Notes O a—

The presumption that the possessor of a negotiable note is the holder thereof is a presumption of fact and not of law, and may be rebutted by either plaintiff’s or defendant’s evidence.

2. Bills and Notes H a: Parties A a — Bank holding note as agent for collection may not maintain action on the note.

Plaintiff Federal Reserve Bank brought suit on a note endorsed to it by the Federal Reserve Agent: “Pay to order of the Federal Reserve Bank for collection for the account of the Federal Reserve Agent.” Defendant maker moved for nonsuit: *Held,*the presumption arising from possession of the note that plaintiff was the holder thereof was rebutted by plaintiff’s own evidence, and as it appeared that plaintiff was not the real party in interest, O. S., 446, the motion of nonsuit was properly granted.

*2683. Evidence B f—

A party introducing a note in evidence endorsed to it as collecting agent cannot be beard to- attack the endorsement.

The Federal Reserve Bank of Richmond instituted this action before a • justice of the peace on a note for $150.00 made by the defendant G. W. Whitford, payable to the First National Bank of New Bern, and endorsed by the other defendants. The defendants entered a general denial and, upon judgment being awarded the plaintiff, appealed to the Superior Court, where the cause was heard *de novo*at the May Term, 1934, of Ceaven, by *Daniels, J.*

Affirmed.

The plaintiff offered evidence tending to show: (1) that the note was executed by G. W. Whitford; (2) that it was endorsed by the other defendants; (3) that it was endorsed in blank by the First National Bank of New Bern and was rediscounted by the plaintiff Federal Reserve Bank of Richmond; (4) that it was endorsed by the plaintiff Federal Reserve Bank of Richmond and rediscounted to the Federal Reserve Agent; (5) that thereafter it was endorsed by the Federal Reserve Agent, “Pay to the order of Federal Reserve Bank of Richmond for collection for the account of Federal Reserve Agent, Oct. 10, 1929”; and (6) that the note, bearing this last endorsement, was delivered to the plaintiff, the Federal Reserve Bank of Richmond. The plaintiff also introduced evidence tending to show the dealings between the Federal Reserve Bank and the Federal Reserve Agent, to some of which evidence objections by the defendants were sustained. When the plaintiff had introduced its evidence and rested its case the defendants moved to dismiss the action and for a judgment as of nonsuit. The motion was granted and the plaintiff excepted and appiealed to- the Supreme Court, assigning errors.

*W. H. Lee and M. G. Wallace for appellant.*

*W. B. B. Guión and D. L. Ward for appellees.*

Schenck, J.

We are of the opinion that his Honor was correct in granting the motion of the defendants for judgment as of nonsuit.

While, under certain conditions, it may be true, as contended in the appellant’s brief, that the possession of a note creates a presumption of ownership, and thereby gives the holder thereof a *prima facie*right to maintain an action thereon, this presumption is not one of law but of fact, and may be rebutted either by the plaintiff’s or the defendants’ evidence; and if this presumption be rebutted by the plaintiff’s own evidence, the fact of the plaintiff’s possession of the note, standing alone, will not be sufficient to carry the case to the jury. The note sued on bore the endorsement “Pay to the order of Federal Reserve Bank of *269Bichmond *for collection*for tbe account of Federal Eeserve Agent, Oct. 10, 1929.” Tbe plaintiff introduced tbis note bearing tbis endorsement, and therefore cannot be beard to attack it. Whatever may be tbe relationship existing between tbe Federal Eeserve Bank and tbe Federal Eeserve Agent, we think it clear that they are separate and distinct entities, and that tbe reserve bank held tbe note sued on for collection for tbe reserve agent. Such being tbe case, under tbe authority of *Bank v. Exum et al.,*163 N. C., 199, and *Bank v. Rochamora et al.,*193 N. C., 1, and numerous cases there cited, bis Honor was correct in bolding that tbe plaintiff, tbe Federal Eeserve Bank of Bichmond, was not tbe real party in interest and, under C. S., 446, could not maintain tbis action.

*Clarkson, J.,*in *Bank v. Rochamora, supra,*after calling attention to tbe apparent conflict between C. S., 3017, which provides that “A restrictive endorsement confers upon tbe endorsee tbe right ... to bring any action thereon that tbe endorser could bring,” and C. S., 446, which requires that “Every action must be prosecuted in tbe name of the real party in interest, . . .” says: “Construing tbe sections of tbe Negotiable Instrument Law referred to (C. S., 3017) with tbe section under Civil Procedure, that says every action must be prosecuted in tbe name of tbe real party in interest, we think C. S., 446, is mandatory and compelling. We think tbe decision of *Bank v. Exum,*163 N. C., 199, correct in principle and founded on a just and reasonable interpretation of tbe statutes applicable and cognate. To say a collecting agency, because it is a bank, can sue in its own name would be to say that any attorney or any kind of collecting agent can likewise enter suit by reason of tbe agency. We do not think our statute allows tbis construction as to favoritism. Tbe contrary construction would permit tbe real owner of tbe instrument to defeat all equities of tbe maker by simply turning it over to an agent for collection. ‘Logic of words should yield to tbe logic of realities.’ *Brandéis, J.,*dissenting in *Di Santo v. Penn.,*U. S. Supreme Court Opinion, 3 January, 1927.”

We see no prejudicial error in bis Honor’s admitting tbe cross-examination of tbe plaintiff’s witness referred to in tbe first assignment of error, or in tbe exclusion of certain documentary evidence set forth in tbe second and third assignments. If tbe plaintiff desired *the*testimony of tbe Federal Eeserve Agent, it should have subpoenaed him as a witness or have taken bis deposition.

Affirmed.