Court Opinion

ID: 3886177
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:15:54.754241+00
Date Added: 2024-06-11T14:15:28.285686
License: Public Domain

This is an action on a promissory note dated at Greenwood, S.C. 11th day of March, 1910 (but delivered next day), whereby the defendant promised to pay to the order of Southern Flour and Grain Company, on the 15th day of October thereafter, seven hundred and seventy dollars, for value received.
The plaintiff contends, that the said note was indorsed by the Southern Flour and Grain Company and came into its possession, in the usual course of business in the city of Atlanta, Ga., on the 12th day of March (the day on which it was delivered to the Southern Flour and Grain Company), and that they are now bona fide holders of the note.
The defendant claims that the plaintiff did not acquire the note before maturity, and that it, therefore, is not an innocent holder; that the consideration of the note was certain flour, purchased by the defendant from the Southern *Page 310 
Flour and Grain Company, under a contract in which said company guaranteed that the price of flour would not decline before a certain time, and represented that the flour purchased was of a certain quality, as to both of which — the guaranty and the representation — there was a breach.
At the close of the defendant's testimony his Honor, the presiding Judge, directed the jury to render a verdict in favor of the plaintiff, for the amount claimed, on the ground that only one inference could be drawn from the testimony, and that was that the plaintiff was an innocent purchaser, for value, before the maturity of the note, without notice. The only question in the case is, whether his Honor, the presiding Judge, erred in so ruling.
We reproduce the following testimony of E.Z. Seymour, the defendant, for the purpose of showing that there was some testimony tending to prove that the note was not indorsed by the Southern Flour and Grain Company until it was past due:
"Mr. Grier: Where was that note when you got that letter? (The letter was dated 8th October, 1910; was sent by the Southern Flour and Grain Company to the defendant, and was as follows: `Your note for $770.00 will be due and payable Oct. 15th. Please give same prompt attention.') In the Bank of Greenwood. Did you or not examine that note in the bank? Yes, sir; I looked at it. Will you please state to me, whether or not, it had at that time, the indorsement there, of the Southern Flour and Grain Company, per R.O. Wallace, Secretary, on it? I can't be positive about this. I went to look at the note, and came back and told you at the time about the note, and you advised me not to pay it, that it certainly belonged to the Southern Flour and Grain Company.
"Mr. Giles: We object.
"Mr. Grier: You can't tell that. State whether or not, to the best of your recollection, it had been indorsed by the Southern Flour and Grain Company, and The Lowry *Page 311 
National Bank, at that time. To my best recollection, it belonged to the parties I bought the flour from.
"Mr. Giles: I object.
"Mr. Grier: You will have to answer the question. From your best recollection, did or not, the note, at the time you inspected it, have on it the indorsement of these people, the Southern Flour and Grain Company, to your best recollection? I don't think it had it on it at all, to the best of my recollection.
"Mr. Giles: We object.
"Mr. Grier: To your best recollection, will you please state to me, whether you saw this indorsement there, `Purchased from Southern Flour and Grain Company on March 12, 1910, and now owned by us?' No, sir; I didn't see that — have no recollection of seeing it at all. You are pretty clear on that? Yes, sir; I am pretty clear on that — have no recollection of seeing that at all. And you examined the note? Yes, sir; Mr. Long let me see it. I asked him to let me see it, and he did so. Why did you want to look at it — to see whether it was negotiated, or turned over to somebody else, or not? Yes, sir. For what purpose? I wanted to make the men I bought this flour from sue me themselves — didn't want the note to go into third party's hands — and I went for that purpose, to see whether it was in third party's hand or not. Do you know whether or not the note remained in the bank, from the time you saw it until after it was due? Yes, sir; it did. It didn't go out of there? I don't think it went back until the 19th of October — I think that was when the bank sent it back. And you are pretty positive this thing down here (indicating) wasn't written on it? Pretty positive. Of course, I couldn't be sure, but I don't think it was there. You went there for the purpose of seeing, whether it had passed to the hands of a third party? Yes, sir. You can't tell what you said, but did you report what you saw to Messrs. Grier  Park, your attorneys? *Page 312 
"Mr. Giles: We object to that.
"The Court: What was that last question?
"Mr. Grier: I didn't ask him to state the conversation, but after he saw it, if he came to the office of his attorneys and stated to them, what he saw on the note — not to go into the statement.
"The Court: He can state he made a statement and stop at that.
"Witness: Yes, sir; I went to them and made a statement.
"Mr. Grier: And in consequence of what occurred there you refused to pay this note to The Lowry National Bank? Yes, sir. Will you please state under what conditions this note was given, and for what it was given?
"Mr. Giles: We object to that.
"The Court: I think that is a proper question.
"Mr. Giles: We object upon the ground, that it is now owned and held, by an innocent purchaser for value, and without notice of any defects, or anything in the note, and that —
"The Court: That would be a very proper objection, and one that ought to be sustained, if it was all one way and they were innocent purchasers for value, but that has got to be one of the circumstances in this case now.
"Mr. Giles: We submit that this testimony is not competent, until they show that we are not innocent purchasers. There is no testimony at all, at this time, going to show or tending to show that the plaintiffs are not innocent purchasers, for value, without notice.
"The Court: There is a scintilla of testimony here to go to the jury on that at present, as to whether or not you did acquire these notes, at the time you allege in the complaint, or whether they got them later."
Again he testified as follows: "When was it you said you first saw that note in the bank? I think it was the fifteenth, or may be later than the fifteenth. That was the day it *Page 313 
was due? Yes, sir; after it was due. You went there to see it? Yes, sir. And you are not certain what was on the back of the note? No, sir; I am not certain what was on the back of it. Was there anything on the back? To my best recollection, there wasn't any red writing on the back at all. According to your best recollection, there was not red writing? Yes, sir; to my best recollection it was just handed to the bank for collection. It might have been there and you might not have noticed it? I don't know — it might have been — yes, I suppose it could. Might have been there? But I went for that purpose, to see whether it was there or not, and my best recollection it wasn't, because I came back and told Mr. Grier. If it hadn't been there, wouldn't you have had a distinct recollection that it wasn't there? My actions prove it wasn't there, because I went right to Mr. Grier. But you have no independent recollection? No, sir; I don't recollect for certain — I couldn't swear positive to that. And you don't have any independent recollection of what was on the back of the note? Well, I don't suppose I do."
"A bona fide holder for value of negotiable paper is one who has acquired title in the usual course of business, for a valuable consideration, in good faith, from one capable of transferring it, and without notice or knowledge of defenses or circumstances, which should put him on inquiry." 7 Cyc. 924.
"Unless negotiable paper is payable to bearer, in which case title will pass by delivery, indorsement is necessary to constitute the holder of such paper a purchaser in the ordinary course of business; and where he receives the paper from the original payee, by assignment or sale instead of indorsement, he obtains no title superior to that of the payee." 7 Cyc. 926.
"If a bill or note is originally payable to a person named or his order, the legal title can be transferred only, in the first instance, by indorsement." 4 Enc. of Law 252. *Page 314 
"Where an instrument, payable to order, is negotiated by delivery without indorsement, the holder acquires thereby the same rights only, as would pass to the assignee of a bill or note not negotiable, or other chose in action; that is, he acquires only such title as the transferrer had, and takes the instrument subject to all the defenses and equities, to which it was subject in his hands." 4 Enc. of Law 253.
These authorities show, that if the Southern Flour and Grain Company did not indorse the note until it was past due, then it could not be said, that the plaintiff became the owner thereof in the usual course of business, and it would not be a bona fide holder.
It is true, the defendant does not testify positively that the note had not been indorsed by the Southern Flour and Grain Company before maturity, but he states facts from which the inference may reasonably be drawn, that the note had not been indorsed by the payee until it was past due.
Mr. Wigmore, in volume I, section 726, of his work on evidence, thus states the rule as to such testimony: "The general rule is, that recollection should adequately correspond to observation. It is in a qualitative way, that the deficiency usually occurs. The witness, it may happen, cannot recollect `positively,' — `is not sure,' — `thinks' it was so, — has an `impression,' — `believes,' or the like. How far is such a degree of recollection satisfactory?
"It is a commonplace of judicial experience, that testimony most glibly delivered, and most positively affirmed, is not always the most trustworthy. The honest witness, who will not exaggerate the strength of his recollection, is well worth listening to because of this very caution. Moreover, to accept such `impressions' and `beliefs' is, after all, not dangerous, since they carry, in themselves a warning of their evidential weakness. The best judicial opinion does not insist on a high degree of positiveness in the recollection, but accept whatever the witness feels able to present." *Page 315 
There are several other facts and circumstances, upon which the appellant relies, to show that the plaintiff is not an innocent holder of the note; we do not, however, deem it necessary to consider them in detail, but only to call attention to the following statement of the rule in Railroad v.Partlow, 14 Rich. 237: "It may be, that no one of the facts would of itself warrant the inference, and yet, when taken together, they may produce belief, which is the object of all evidence."
In 1 Greenleaf Ev., sec. 51, it is said: "It is not necessary that the evidence should bear directly upon the issue. It is admissible, if it tends to prove the issue or constitutes a link in the chain of proof, although alone it might not justify a verdict in accordance with it. All the circumstances mentioned in this ground, may be regarded as links in the chain of proof, from which the jury might deduce the inference of the defendant's privity and direction in the acts of trespass. This is usually the case when an issue depends on circumstantial evidence."
I think the judgment should be reversed and the case remanded for a new trial.