Court Opinion

ID: 3241309
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:14:43.265318+00
Date Added: 2024-06-11T13:59:04.028481
License: Public Domain

Under the Negotiable Instruments Law:
"The indorsement or assignment of the instrument by a corporation or by an infant passes the property therein, notwithstanding that from want of capacity the corporation or infant may incur no liability thereon." Code, § 4979.
The plaintiff in this case sufficiently proved his title to the note, and his right to maintain a suit thereon, when he exhibited the note indorsed in blank by the payee corporation, by the act of its president, whose signature was duly proven, and showed that he was a purchaser in due course under the principles of the law merchant.
So far as the authority of the president is concerned, it must always be prima facie presumed that the president of a manufacturing or trading corporation is authorized to discount and transfer, in course of its business, negotiable instruments payable to or held by the corporation. Merchants' Nat. Bk. v. Gas. Lt. Co., 159 Mass. 505, 34 N.E. 1083, 38 Am. St. Rep. 453; Iowa Nat. Bk. v. Sherman, 17 S.D. 396, 97 N.W. 12, 106 Am. St. Rep. 778; Mann v. Second Nat. Bk., 34 Kan. 746. 10 P. 150; Nichols v. Frothingham, 45 Me. 220, 71 Am. Dec. 539; Milwaukee Trust Co. v. Van Walkenburgh, 132 Wis. 638, 112 N.W. 1083; 1 Daniel on Neg. Inst. (6th Ed.) § 394; 14a Corp. Jur. 735, § 2783, notes 2 and 3. See, also, Stouffer v. Smith-Davis Hdw. Co., 154 Ala. 301, 45 So. 621. 129 Am. St. Rep. 59. That presumption is of course conclusive in favor of a holder of the instrument in due course.
Whether or not such a presumption would be given effect in an action by the transferee against the indorsing corporation, to hold it liable on the indorsement, is a question with which we are not here concerned, and upon which the authorities differ. 14a Corp. Jur. 454, § 2312; Id., 736, § 2785.
The case of U. I. W. Co. v. U. N. S. Co., 157 Ala. 645,47 So. 652, did not involve the rights of a purchaser in due course of commercial paper, and is not in point.
We conclude that the trial court erred in excluding from the evidence the indorsement by the Fertilizer Company, by its president, as shown on the back of the note in suit.
Some of the special pleas set up usury in the principal note for $4,000 executed to plaintiff by the Fertilizer Company, probably on the theory that usury in the principal note deprives the payee of his standing as a holder in due course of the collateral note indorsed to him as security. But there is no such relation between the principal and the collateral note, and —
"the pledgee is allowed to enforce the payment of the collateral note, where received before maturity, for an advance without notice given upon a usurious loan, as any other holder for value, in the usual course of business." Colebrooke on Coll. Securities (2d Ed.) 239, § 134.
A consideration of other questions argued by counsel would seem to be unnecessary.
Let the judgment be reversed, and the cause remanded for another trial.
Reversed and remanded.
ANDERSON, C. J., and McCLELLAN and THOMAS, JJ., concur.