Berney v. Steiner Bros. , 108 Ala. 111 ( 1895 )

HARALSON, J.

It seems to be well settled generally that the possession and production by the plaintiff of a note sued on, with the blank endorsement of defendant, who is the maker, payee and endorser of the same, is prima facie evidence of his ownership of the note ; and in the absence of rebutting proof, shows his right to maintain the action in his own name. Lakeside Land Company v. Dromgoole, 89 Ala. 505. This rule, it was said in the case cited, may be regarded as settled ill this State; that “it was held, more than fifty years ago, that a blank endorsement vests the note in the holder, if the owner, as completely as can be done by any other mode, and it is unnecessary for the endorsement to be filled up before going to the jury.” Riggs v. Andrews, 8 Ala. 628 ; Sawyer v. Patterson, 11 Ala. 523 ; Pickett v. Stewart 12 Ala. 202. And in Bancroft v. Payne, 15 Ala. 834, it was held, that an agent to whom a note endorsed in blank, had been transmitted for collection, might sue on it in his own name. The principal alone has the right to object. Goodman v. Walker, 30 Ala. 482. And still again, we have more recently held, that when the paper, though indorsed and transferred, gets back in the hands of the payee, the law converts his possession into a prima facie legal title, upon which suit may be prosecuted, wholly regardless of the condition of the paper as to its endorsements, and the burden is on the defendant to show want of title in the plaintiff. Anniston Pipe Works v. Furnace Company, 94 Ala. 606 ; Tuscaloosa Cotton S. O. Co. v. Perry, 85 Ala. 165 ; Price v. Lavender, 38. Ala. 389 ; Herndon v. Taylor, 6 Ala. 461.

It has been further held that when a note is payable, iu bank, the legal title, and not the beneficial interest in the collection, controls. That the holder, of the legal title,- is not entitled, to the proceeds, is no defense to an action on the note. Hanna v. Ingram, 93 Ala 483 ; Code, § 2594.

In a recent decision in the Illinois Court,, the case we-have before us, iu its essential features, was passed on by that court. H. M. and F. R. Henderson gave a note-payable to Phillips, who, as alleged in the declaration, assigned the same to Davisson. The defendant offered evidence that the plaintiff delivered the note indorsed by him in blank to a bank, as collateral security for a note given by him to the bank, and that in order to enable the plaintiff, Davisson, to sue upon said note, the bank gave it to his attorney for that purpose. Judgment having been rendered for plaintiff, on appeal, the Appellate Court said : “The plaintiff having shown the making of the note and its endorsement to him as alleged, and being in possession of it, would not be barred of the action merely by the fact that his own name appeared indorsed on the instrument * * *. It is not a matter as to which the maker may object. In' such case, the plaintiff may strike the blank endorsement or not, as he prefers. The judgment will.protect the maker against another action, and it is not material to him what may be the rights of the plaintiff and another party, as to the beneficial interest in the judgment.

“The note and the endorsement to plaintiff were properly admitted in evidence, nor did the proof offered by defendants make any important change in the situation. The substance of the matter was merely, that while the bank retained a beneficial interest in the note, the possession of it was surrendered for the express purpose of allowing the plaintiff to sue in his own name, thus restoring to him the legal title to the paper. There is nothing here of which the makers can complain.” Henderson v. Davisson 57 Ill. App. 17.

This decision seems to be in line with our own adjudications, referred to above, and supported by authority elsewhere. French v. Jarvis, 29 Conn. 348 ; Eaton v. Alger, 47 N. Y. 345 ; 3 Rand, on Com. Paper, § 1658.

There was no departure from the’ complaint, as is supposed by appellant’s counsel, in the replication filed, and the demurrer to it was properly overruled. The replication to the plea was good, and it was satisfactorily established by the evidence.- By the very terms of the agreement entered into between plaintiffs and Rich & Biederman, at the time said note was given and endorsed by plaintiffs, it was stipulated “that it is hereby understood and agreed that Rich & Biederman, the holders of the note aforesaid, will not negotiate the same, but if the said William Berney should fail to pay said note, said Steiner Brothers are first to exhaust all remedies under the note and securities, and if there should then be a balance due on said note, Steiner Bros, are to pay the same to Rich & Biederman.” The note not having been paid by defendant at maturity, was under this agreement properly returned to plaintiffs, who were authorized and entitled to maintain this action to enforce the payment of the same out of defendant. Their right to sue. accrued to them, certainly, under their said contract with Rich & Biederman, of which defendant had no right to complain. The note was properly admitted in evidence and the objections raised by appellant to the introduction of evidence as to the circumstances and conditions of its execution, on which assignments of errors are based, were also without merit.

There were other errors insisted on, which were not meritorious and we will not consider them.

There was no error in giving the general charge as requested for plaintiffs.

Affirmed.