Deshazo v. L. & E. Lamar , 17 Ala. App. 392 ( 1920 )

SAMFORD, J.

The defendant, who resided in Birmingham, Ala., went in person to Selma, Ala., and contracted with one Tarver for the purchase of 200 acres of land and as a part of the trade, deposited with one Johnson, a neighbor of Tarver, a check dated November 5, 1917, and drawn on the American Trust & Savings Bank of Birmingham, Ala., for $100, to be delivered to Tarver upon the delivery by Tarver to the attorney of defendant an abstract of title and deed to the land purchased, and upon the approval of the title and deed to the land by defendant’s attorney, the check was then to be delivered and cashed as part of the purchase money for the land. In violation of the terms of the escrow agreement, and without the abstract of title having been furnished, or deed to the land tendered, Johnson delivered the check to Tarver and sent a letter in response to a telegram of inquiry from defendant, postmarked November 9th, addressed to defendant at Birmingham, saying, “It's up to you and Tarver; I will have nothing else to do with it.”

From this record the evidence is without dispute that Tarver had no right to the checki and in his hands its collection could not be enforced. The check, which was drawn on the American Trust & Savings Bank, was on November 9th presented at that bank, by the First National Bank of Birmingham, and payment refused, because defendant had ordered payment stopped. It was shown by the evidence that on November 6th Tarver negotiated the check to.plaintiffs under the following circumstances. It does not appear from the record that plaintiffs or any member of that firm knew defendant, or his financial standing; but, on the contrary, it appears that they were entire strangers; that plaintiffs were engaged in the -general merchandise business in Selma, but were not bankers; that plaintiffs knew Tarver, who lived about four miles from Selma, and had known him for 15 years, during which time Tarver had sometimes traded at plaintiffs’ store, and also knew Johnson, the depositary; that Tarver was indebted to a brother of one member of the firm; that -Tarver came to plaintiffs’ store on November 6th, had the check with him, and said to Law- Lamar, a member of plaintiffs’ firm, that he wanted to pay G. L. Lamar (the brother) $100, and said he had a check. Tarver did not say what he wanted to pay the $100 for, or what if. was to be credited on. Law Lamar did not know what Tarver was paying it for. Tarver had never paid money to these plaintiffs before this time. Law Lamar (the mem her of the firm) told Tarver to go to the bookkeeper, get the money on the check, which was done, the bookkeeper paying Tarver the money" after he had been instructed so to do by Law Lamar. Tarver immediately brought the money to Law Lamar, and paid it to him for his (Lamar’s) brother, giving a receipt therefor. Law Lamar immediately took the money back to the bookkeeper, instructing him to take it to the bank in Selma and deposit it to the credit of the brother, for whom it had been paid. The check was indorsed by. Tarver, and then by plaintiff, and sent, not to plaintiffs’ bank in Selma, bat to plaintiffs’ bank in Fauns-dale, Ala., through the mail, and from there it went through regular channels for collection. It also appears from the indorsement on the check, the original of which we have before us, that immediately under the indorsement of Tarver the indorsement was first made, “For deposit to credit of E. 0. Lamar [the brother],” and then changed to L. & E. Lamar; this indorsement being in the handwriting of the bookkeeper of plaintiff. There is no difference between counsel for appellant and appellee as to the law of this case, except as it may be applied to the facts.

[1,2] A bona fide holder of a negotiable paper may recover, although it wa's deposited with a person to be delivered on the happening of a certain event or the fulfillment of a certain condition, which event never happened or condition has never been fulfilled. 8 C. J. 205, 760; Garrett v. Campbell, 2 Ind. T. 305, 51 S. W. 956. The case of Farley v. Baldwin, 201 Ala. 197, 77 South. 723, is not in conflict with the foregoing; ' it having been held in that case that the complainant was not a bona fide holder. This would not be such a delivery as to actually put the legal title in the indorsee, but the defendant would be estopped to deny a valid delivery in a suit by an innocent holder for value, for the reason that by his negligent act he hqd allowed the instrument to get into circulation. W. D. Cannon, Jr., v. Dillehay et al., 84 South. 549;¹ 3 R. C. L. 1025; Garrett v. Campbell, supra. Nor does the Negotiable Instrument Law change the rules of the common law, as to the burden of proof, where fraud is shown, or where the title of the person negotiating the instrument is defective. Downs v. Horton (Mo. App.) 209 S. W. 595; 3 R. C. L. p. 1041.

[3,4] In this case, it appears from the record without dispute, that the check was turned over to Tarver, by Johnson the depositary, in violation of the terms of the escrow agreement, and hence no delivery of the check was ever made to Tarver, in accordance with the purpose and intent of the parties. Therefore, so far as Tarver was concerned, the check had no legal inception or valid existence as such. Cannon, Jr., v. Dillehay et al., supra; 3 R. C. L. p. 1025. This being the case, the burden was on plaintiff to prove that he acquired the title as a holder in due course. Code 1907, § 5014. To do this he must prove, in addition to subdivisions 1 and 2 of section 5007 "’'of the Code of 1907, that he took it in good faith and for value and at the time he had no.notice of any infirmity in the instrument or defect in the title of Tarver.

[5] Fl-orn a reading of the evidence it is an easy matter for any one at all familiar with the law of negotiable instruments to reach the conclusion that Tarver not'only came in possession of the check in breach of the terms of the escrow agreement, but that he realized it and was, when he negotiated it, making a careful and studied effort to place someone between him and the defendant, who could enforce the collection of the check, free from the equities and defense held by the defendant as against the check, while in his hands. In order to do this he did not go to a bank, where checks are usually negotiated and collected, nor yet to a¹ mercantile establishment, where he was dealing by account, but sought out a friendly merchant, whom he had known for 15 years, and with whom he had sometimes traded, but who did not know the defendant, nor his financial standing, and who did not know whether the check would be paid or not, and according to their statement the check was negotiated for its face value, without profit of any kind to the merchant; he assuming gratis the loss of interest during the time of collection, and of collecting the check on an unknown person in a distant city. Every act of Tarver and the plaintiff, while the check was being negotiated, may be looked to by the jury to see if the facts and circumstances indicate a conference as to the method of handling the check so as to accomplish the purpose of Tarver; and while the words in the conversation used in the negotiations, taken alone, might establish the bona fides of the transaction, the acts and cir-, cumstances, when taken in the light of common sense, common reason, and a common knowledge of the way business is done in this country, may be sufficient to prevent the jury from being reasonably satisfied from the evidence that the plaintiffs had carried the burden placed upon them by law.

The testimony of witnesses to a transaction, when undisputed, must be taken as establishing the facts testified to; but the circumstances and surroundings may be such, not only to cast suspicion,- but, when considered in the light of common experience and human understanding, may amount to a denial of the testimony given by the witnesses. Many illustrations might he given of this principle; but we deem it unnecessary to prolong a discussion of the evidence, in view of the fact that this case must be tried before a' jury, and we do not desire the conclusions here reached to affect the final conclusions of the jury. Suffice it to say the facts and circumstances, when taken and considered as a whole, present a question to be decided by a jury. Bunzel v. Maas & Swartz, 116 Ala. 68, 22 South. 568; Moore on Facts, vol. 1, §§ 573, 574. The court erred in giving the affirmative charge as requested ‘by the plaintiff, and for this error the judgment is reversed, and the cause is remanded.

Reversed and remanded.

1 Ante, p. 294.