Court Opinion

ID: 3875491
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:08:38.126165+00
Date Added: 2024-06-11T07:41:44.013071
License: Public Domain

June 11, 1926. The opinion of the Court was delivered by
The appellant states the points raised by the exceptions thus:
"This was an action commenced by the plaintiff against defendants, as indorsers, for the recovery of the amount due on four several promissory notes. The answer sets up two principal defenses, to wit:
"The first denies notice of protest and nonpayment.
"Second, the defendants deny the validity and legality of the notes sued on, and further set up as a cause of invalidity that the notes were given for and included a pre-existing *Page 302 
indebtedness of the same corporation, J.C. Moore  Son, Inc., which pre-existing indebtedness should have been and was discharged by bankruptcy in the early part of the year 1922, but that the plaintiff secretly and without the knowledge of the other creditors of the corporation obtained from the bankrupt corporation a new note incorporating all of its indebtedness, together with the indorsement of these defendants, while appearing to agree to a composition in the bankruptcy, all of which misled other creditors and was in reality a fraud on them. And that this illegality vitiated the entire indebtedness.
"Our attention will therefore be confined to these two points which are covered by the various exceptions."
As to the indorser denying notice of protest and nonpayment, no other inference can be drawn from the evidence other than that W.S. Moore was the agent of Mrs. E.V. Moore; he admits that he received the notices; it is true that he testified that he received them after the time had passed, but Duncan testified that the notices were given in time; there was a conflict of testimony, and his Honor properly submitted the issues to the jury.
The evidence thereafter of composition was made on April 14th and accepted on April 30th, and accepted by sufficient creditors at some time in May to make it binding on everybody; the respondent in agreeing on June 6th to make the loan and consummating the loan on June 7th was not guilty of fraud or collusion to the detriment and injury of the other creditors. The money borrowed was used in paying off the other creditors, who accepted the offer of composition long before the loan was negotiated, and appellants were under a moral obligation to pay the money they owed the respondent, and it was perfectly natural and legitimate in advancing more money to pay off the other creditors that the respondent should look to securing the debts the appellants then owed it.
It was a legitimate transaction — natural — and the evidence *Page 303 
shows there could not be and was not any sort of fraud or collusion practiced on the other creditors in the case.
We see no error on the part of his Honor; there is no merit in the exceptions; the exceptions are overruled and judgment affirmed.
MR. CHIEF JUSTICE GARY and MESSRS. JUSTICES COTHRAN, BLEASE and STABLER concur.