Court Opinion

ID: 7068438
Source: CourtListenerOpinion
Date Created: 2022-07-24 07:29:26.723408+00
Date Added: 2024-06-11T16:12:30.491191
License: Public Domain

On Petition for Rehearing.
Nichols, P. J.
Appellant, by his counsel, having earnestly challenged the decision in this case as being contrary to the long-established rule of law, we deem it due him that in ruling upon his petition for rehearing we amplify the original opinion'.
2. 3. We again direct attention to the fact that the complaint in this case avers that the note in suit was assigned and transferred to appellee for value in due course of business and before maturity. The second paragraph of answer is an affirmative paragraph, averring fraud but failing to deny the averment of the complaint that the note was transferred in due course or, for that matter, any other averment of the complaint. It has been repeatedly held that matters well pleaded in the complaint and not controverted in the answer must be taken as true in testing the sufficiency of the answer. Bowen v. Pollard (1880), 71 Ind. 177; Matter v. Campbell (1880), 71 Ind. 512; Cole v. Wright (1880), 70 Ind. 179; Taylor v. Griner (1914), 55 Ind. App. 617, 104 N. E. 607; Baxter v. Moore (1914), 56 Ind. App. 472, 105 N. E. 588; Hayward v. Hayward (1917), 65 Ind. App. 440, 115 N. E. 966, 116 N. E. 746.
In Bunting v. Mick (1892), 5 Ind. App. 289, 31 N. E. 378, 1055, the rule is stated that: “If the holder of paper negotiable by the law merchant, and to which the maker has a valid defense, relies upon the fact that he is a bona fide holder thereof, for value, the burden is upon him to aver and prove that he obtained such paper before maturity, without notice of the equities or de*531fense's of the maker, and that he paid a valuable consideration therefor. * * * This being the rule, it would, in ordinary cases of this character, devolve upon the plaintiff to reply the facts above indicated in order to avoid the defense set up in the answer. Counsel for appellee insist, however, that the present case forms an exception to the rule, because they claim that here the want of notice usually required in the reply is contained in the complaint, and that this allegation must be negatived in the answer or the latter will not be upheld. * * * We are inclined to agree with counsel for appellee that if the plaintiff in such cases avers in his complaint that he held the note in good faith; that he obtained it before maturity, paid a valuable consideration therefor, and had no notice of any defense on the part of the maker, the defendant must meet these allegations in some manner in his answer. The mere setting up of a defense by the maker as against the original payee would of itself be insufficient, and we take it that a denial of the want of notice, or some equivalent averment in the same paragraph in which the defense is pleaded, would be necessary to make such paragraph sufficient to withstand a demurrer.” It is held in this case, however, that the allegation “that the plaintiff * * * became the owner of the note in due course of business before maturity, for a valuable consideration, and in good faith” was not equivalent to saying that he came into possession of such note without any notice of the defenses set up by the maker. It is to be observed that this opinion is prior to the Negotiable Instrument Act which defines a holder in due course, as appears in the original opinion. We cite Cooper v. Merchants’, etc., Bank (1900), 25 Ind. App. 341, 57 N. E. 569; Bradley, etc., Co. v. Whicker (1899), 23 Ind. App. 380, 55 N. E. 490; Johnson v. Harrison (1912), 177 Ind. 240, 249, 97 N. E. 930, 39 L. R. A. (N. *532S.) 1207, and Millikan v. Security Trust Co. (1918), 187 Ind. 307, 118 N. E. 568, as cases in harmony with the Bunting case, and with the original opinion in this case.
In the following cases, which must be the line of cases relied upon by appellant, it does not appear that there was an averment in the complaint that the plaintiff was a' bona fide holder in due course, or any averment to that effect. Boxell v. Bright Nat. Bank (1916), 184 Ind. 631, 112 N. E. 3; Ray v. Baker (1905), 165 Ind. 74, 74 N. E. 619; Winters v. Coons (1904), 162 Ind. 26, 69 N. E. 458; Shirk v. Neible (1901), 156 Ind. 66, 59 N. E. 281, 83 Am. St. 150; Union Trust Co. v. Adams (1913), 54 Ind. App. 166, 101 N. E. 741; Roane Iron Co. v. Bell-Armstead Mfg. Co. (1900), 24 Ind. App. 250, 56 N. E. 696. The absence of such an averment from the complaint made it unnecessary to aver want of notice in the answer, such an averment being deferred to a denial of plaintiff’s reply of due course and want of notice. In this the cases are to be distinguished from the case at bar.
The petition for rehearing is overruled.
Dausman, J., dissents.