Case Name: Josephine Haslach v. Theodore Wolf et al.
Court: Nebraska Supreme Court
Jurisdiction: Nebraska
Decision Date: 1905-04-19
Citations: 73 Neb. 658
Docket Number: No. 13,889
Parties: Josephine Haslach v. Theodore Wolf et al.
Judges: Ames and Letton, CC., concur.
Reporter: Nebraska Reports
Volume: 73
Pages: 658–662

Head Matter:
Josephine Haslach v. Theodore Wolf et al.
Filed April 19, 1905.
No. 13,889.
1. Petition examined, and held sufficient to allege a purchase of the promissory note in dispute for value, before maturity, under the law merchant.
2. Promissory Note: Indorsement. Where there is no evidence as to the date of an indorsement on a negotiable promissory note of the name of the payee or an endorsee, the presumption of law is that it was made before maturity and that the holder thereof is a bona fide holder for value.
Error to the district court for Platte county: Conrad Hollenbeck, Judge.
Reversed.
McAllister & Cornelius, for plaintiff in error.
A. M. Post, J. J. Sullivan and Albert & Hobart, contra.

Opinion:
Oldham, O.
This cause of action is before this court a third time for review. The cause originated in the district court for Platte county, Nebraska, as a suit on a promissory note, and the petition filed was as follows:
"In the District Court for Platte County, Nebraska.
"The plaintiff complains of the defendants, for that on 1st day of June, 1887, said defendants made and delivered to Wm. H. Beck his certain promissory note of which the following is a copy:
" '$2,000 Crestón, June 1, 1889.
" 'Five years after date, we or either of us promise to pay to the order of Wm. Beck Two Thousand Dollars ($2,000), at Crestón, with New York exchange, for value received, without relief whatever from valuation or appraisement law, with seven and a half per cent. {V¿) interest from date, interest payable semiannually until paid and attorneys' fees.
" 'Theodore Wolf and Emma Wolf/
"Said note is indorsed as follows: 'Pay to the order of Josephine Beck, William H. Beck.' 'Pay to Josephine Haslach, Josephine Beck/
"For a valuable consideration this plaintiff purchased this note before maturity, and this plaintiff is now the owner and holder thereof. No part of said note has been paid except the interest, which has been paid to December 1, 1895, and there is now due on said note from the de fendants to the plaintiff the sum of $2,000 with interest at seven and a half per cent. (7-J) per annum from December 1, 1895, for which, with costs of suit, plaintiff asks judgment."
To this petition defendant Theodore Wolf filed a separate ansAver, which, in substance, admitted the execution of the note in controversy, and alleged that after said note, by its terms, had become due and payable, it Avas by the payee thereof, William H. Beck, without any consideration therefor, indorsed and transferred to Josephine Beck, who without consideration indorsed and transferred the same to the plaintiff, and that the plaintiff, as well as Josephine Beck, had notice of the defense existing against said note between plaintiff and the payee therein named. The answer then set out an unsettled partnership account between the maker of the note and William H. Beck, the payee, and alleged that at the time of the execution of the note1 the payee therein named was indebted to the maker on said accounting in a sum largely in excess of the face of the note. The answer prayed for an accounting bewteen defendant Theodore Wolf and William H. Beck, the payee of the note. A reply was filed to this answer by plaintiff in the nature of a general denial. When the cause came on for hearing it was ordered by the court that the issue joined on the bona fides of the transfer of the note to the plaintiff be separately tried as an issue of law. A hearing was accordingly had on the question of the bona fides of the purchase, and the district court found that the note was a nonnegotiable instrument. To reverse this judgment of the district court plaintiff brought error to this court. Our decision on this branch of the case is officially reported in 66 Neb. 600, and the judgment of the district court Avas reversed and the cause remanded for ! ether proceedings. After the district court had found tli.it the note AAras nonnegotiable, William H. Beck, the p — ee of the note, Avas made a party defendant, and appea:. and pleaded to the allegations of defendant's answer as a petition, and having joined issues thereon, a trial was had to the court, which resulted in a judgment in favor of defendant Wolf and against his former partner, William H. Beck, for the amount due on the note. Beck took an appeal from this judgment, which, on a hearing in this court, was affirmed in an opinion unofficially reported, by Lobingier, C., published in 4 Neb. (Unof.) 306. When mandates were issued on each branch of tbe case and returned to tbe district court, defendant filed a motion in tbe district court for judgment on tbe pleadings and mandates. Tbis motion was sustained by tbe trial court and a judgment for defendant was entered, and to reverse tbis judgment plaintiff again brings error to this court.
Tbe tangled web wbicb has been -woven around the issues involved in tbis case, we think, can be unraveled by tbe application of a few elemental principles of pleading and practice. By our decision in tbis cause, reported officially in 66 Neb. 600, we held that tbe note sued upon was negotiable. In our unofficial opinion, published in 4 Neb. (Unof.) 306, we affirmed a judgment on a partnership accounting between Theodore Wolf, tbe maker of the note, and William H. Beck, tbe payee, wbicb found that tbe payee was indebted to tbe maker in a sum equal to tbe amount due on the note at tbe time tbe note was executed. Now, if tbe petition sufficiently alleges a purchase and indorsement of the paper before maturity under tbe law merchant, it follows that, on tbe face of the petition, plaintiff took tbe paper shorn of all equities existing between tbe parties to the instrument, and that tbe motion for judgment on the pleadings and mandate should have been overruled. But if the petition is insufficient on its face to show that plaintiff is an innocent bolder of tbe note, then tbe trial court was justified in sustaining tbe motion.
We have copied tbe petition at length, not for tbe purpose of commending it as a model pleading, but rather to determine the sufficiency of its allegations. The petition alleges that tbe note bears certain indorsements, which are set out, and it also alleges that tbe plaintiff purchased the note for a valuable consideration, before maturity, and is noAv the owner and holder thereof. It is not alleged, however, that the indorsements were made before maturity; and defendant by his ansAver alleges that the indorsements Avere all made after the maturity of the paper and with full knoweldge of the equities existing between the maker and payee. The allegations in the answer are denied by the reply. Therefore the question to be determined is what legal presumption arises from an allegation in a petition on a negotiable promissory note, alleged to haAre been purchased under the law merchant, before maturity, from a mere recital of the indorsements on the paper, without any allegation as to when the indorsements Avere made?
In the case Rahm v. King Wrought-Iron Bridge Manufactory, 16 Kan. 530, this question Avas revieAved in a very able and exhaustive opinion by BreAver, J., and it Avas there held that "where there is no evidence as to the date of an indorsement, the presumption of laAV is, that it Avas made before maturity, and that the holder is a bona fide holder for value." This proposition seems to be concurred in very generally by the text-Avriters. See 1 Daniel, Negotiable Instruments (5th ed.), sec. 728; 2 Randolph, Commercial Paper, sec. 686, and cases there cited. It follows from basic principles that if it is not necessary for plaintiff to prove the date of the indorsements in the first instance, it is not necessary to allege them, in-the petition.
We are therefore of the opinion that the learned trial judge erred in sustaining defendant's motion for judgment on the pleadings and mandates, and we recommend that the judgment of the district court be reversed and the cause remanded for further proceedings.
Ames and Letton, CC., concur.
By the Court: . For the reasons stated in the foregoing opinion, the judgment of the district court is reversed and the cause remanded for further proceedings.
Reversed.