Rodriguez v. Merriman , 133 Ill. App. 372 ( 1908 )

Mr. Presiding Justice Brown

delivered the opinion of the court.

If we could pass over the questions of pleading" and practice involved in this cause, there would be no difficulty in it. Upon the merits, as far as the record shows them, there could have been nothing said, if the pleadings had been artificial, as against the right of the plaintiff to a judgment.

The plaintiff was a third indorsee. The first two indorsements were without date. The presumption therefore is that the assignments evidenced by them were made before maturity of the note and on consideration, and without notice of defense. Indeed the presumption is that they were made on the date of the execution and delivery of the note by the maker. Daniel on "Negotiable Instruments, section 83; Benjamin’s Chalmer’s Digest, 2nd Ed., article 132; Dodd v. Doty, 98 Ill., 393; Pettis v. Westlake, 3 Scammon, 535; Mobley v. Ryan, 14 Ill., 51; White v. Weaver, 41 Ill., 409; Smith v. Nevlin, 89 Ill., 193; Grier v. Cable, 45 Ill. App., 405.

The presumption is one that can be rebutted by evidence of course, but in this case there was no evidence offered tending to contradict it.

The presumption uncontradicted, having placed D. G. Lee and Bohan in the position of innocent holders for value before maturity, it follows (and indeed would have followed if but one of them had been such a holder) that the subsequent indorsee has the same rights,, even if he came into the ownership of the note after maturity, or without consideration, or with notice of defenses available against the payee, or under all or any two of these conditions. Daniel, on Negotiable Instruments, section 803-(l) ; Benjamin’s Chalmer’s Digest, 2nd Ed., article 87; Scotland Co. v. Hill, 132 U. S., 117; Woodworth v. Huntoon, 40 Ill., 131; Burton v. Perry, 146 Ill., 71-119; Mann v. Merchants L. & T. Co., 100 Ill. App., 224; Wilcox v. Tetherington, 103 Ill. App., 404.

It is claimed by defendant in error, however, that the evidence showed that the title to the note on May 26, 1904, when the suit was brought, was in Charles H. Hamill and not in the plaintiff, and that this was sufficient to make a judgment in favor of plaintiff against the law and the evidence.

Mr. Hamill, who was the attorney for the plaintiff in this action, testified that he never had any beneficial interest in this note, that the indorsement of the plaintiff to him was solely for convenience in making collection, and that although the indorsement was upon the note when he received it, he had cancelled it (as attorney for the plaintiff) before offering it in evidence.

Hnder this state of things we see no force in the appellee’s argument. Any holder of a note, although he may have written on it an indorsement or an assignment of it, may maintain an action in his own name, and strike out the indorsement before offering the note in evidence. Brinkley v. Going, Breese, 336; Kyle v. Thompson, 3 Ill., 432; Porter v. Cushman, 19 Ill., 572. Best v. Nokomis National Bank, 76 Ill., 608, cannot in this respect be distinguished in principle from the case at.bar, and the language used by the court is entirely applicable here. “Appellant makes the point that the plaintiff was not the legal holder of the drafts, nor had it any interest therein, that the indorsement to R. A. Betts, cashier, transferred the legal interest to him. The answer to this is, the record does not show any indorsement of the bills when they were offered in evidence. This court held, in Brinkley v. Going, Breese, 366, that a payee of a note, although he may have written an assignment on the back of it, can maintain an action thereon in his own name. The indorsement is in' the power and control of the payee, and he may strike it out or not, as he thinks proper, and the possession of the note by the payee is, unless the contrary appears, evidence that he is the bona fide holder of it. And the same doctrine is held in Parks v. Brown, 16 Ill., 454. But the indorsements, if on the bills, are shown to have been for collection merely, and for no other purpose, and did not transfer the title.”

Whatever the plaintiff might have done with his own hand in this regard in this case, he could do through his agent and duly authorized attorney, either at law or in fact. Mr. Hamill was his agent and attorney at law.

It is, however, insisted that as this note was dated July 1, 1894, it was subject to the defense of the Statute of Limitations after July 1, 1904; that the present suit, or at least the rights of the appellant therein, began when the amendment was made, October 12, 1905, which substituted him for Charles H. Hamill as party plaintiff.

It is true that the defense of the statute might have been made to any suit begun ten years after the date of the note, the statute in the' case of demand paper of this character beginning to run on its date. But this suit, under our Practice Act, and the decisions of the Supreme Court thereon, cannot be considered as having been commenced at any later date .than May 26, 1904, notwithstanding the amendment on October 12, 1905. The cases cited by appellant to this point are conclusive. Rev. Statutes, chapter 110, section 23; McCall v. Lee, 120 Ill., 261; Thomas v. Fame Ins. Co., 108 Ill., 91.

Under these circumstances the production of the note in evidence made a case for the plaintiff, which certainly would under artificial pleadings have entitled him to a judgment against any evidence which was adduced in behalf of the defendant. That evidence only tended to prove a defense against the original payee of the note, Delia Lee Merriman, not against the plaintiff.

Defendant in error, however, contends that under the pleadings as they exist, he is entitled to the judgment. He says that whether or not the special pleas filed by him were good, they were replied to, and that the replications tendered issues only on these matters of defense betvyeen maker and payee. The first five of the additional pleas alleged that “the plaintiff was not an innocent purchaser of the note sued on for value without notice,” and followed this allegation with matter of defense which would be good except as against such innocent purchaser, or one who stood in his shoes and with his rights. The second five additional pleas were the same, except that an allegation that the note was assigned to the plaintiff after maturity, took the place of the allegation that the plaintiff was not an innocent purchaser for value. To these pleas the plaintiff, who now alleges that they were demurrable and present no defense, replied, traversing in each case the matter of defense which would have been good against the payee, and taking no notice of the allegations, which were evidently intended to place the plaintiff in the position of the payee in that regard.

This certainly was very inartificial pleading. If, as plaintiff now claims, these ten pleas set forth no defense against the plaintiff, they should have been demurred to; if it was, on the other hand, supposed that the allegations in the first five of them, that the plaintiff ivas not an innocent purchaser for value without notice, could be, by any intendment made to imply the allegation that he did not stand in the shoes of such a purchaser, and the allegation in the second five, that the note was assigned to the plaintiff after the same became due, be stretched to cover an implication that the plaintiff was not a taker from an assignee before maturity, then the plaintiff should have obtained leave to reply double (in case he wished to deny the matter of defense against the payee) and have traversed these allegations.

The defendant had also pleaded the general issue and the Statute of Limitations, and says that assuming all the other pleas to be bad, there was a general verdict which should be supported on the ground of the good pleas. This is an unsound position, for, as we have shown, there was no evidence offered which could support these pleas against the case made by the plaintiff under the special count of the declaration. If, therefore, the special pleas four to thirteen, be eliminated from the case as setting forth no defense and immaterial in the controversy, it is plain that a new trial should have been granted by the trial judge after the verdict. This was the position taken and clearly expounded by Judge Scates in Hitchcock v. Haight, 2 Gilman, 604.

It seems to us the proper one to take in this case. But it is not altogether free from doubt. The rules of common law pleading, exactly the converse in this regard of the rules of equity pleading, say that everything in a pleading not specifically denied is admitted. If, therefore, the allegations concerning the character of the plaintiff’s holding could be made by intendment to mean what they were evidently intended to mean, the plaintiff would be in the position of having admitted and thereby waived proof of everything necessary to a defense except that which the evidence for the defendant tended to prove, and which the jury had a right to pass on.

The issues on the replications which the jury, by their general verdict, found for the defendant, would then not be immaterial, but conclusive. After consideration and investigation, however, we are of the opinion that these issues are immaterial, because of the insufficiency of the allegations of the pleas as to the character of plaintiff’s holding. The declaration specifically set forth the indorsement by Delia Lee Merriman to Daniel G. Lee and by Daniel G. Lee to Daniel J. Bohan, and by Daniel J. Bohan to the plaintiff, and in each case averred that the indorsement was before maturity and for a valuable consideration. We think that these allegations as to the indorsement to Daniel G. Lee and to Daniel J. Bohan were not met by the averments of the pleas before described, that “the plaintiff was not an innocent purchaser for value and without notice of the defenses of the defendant to the note,” and still less, if possible, by the averments that “the said promissory note was assigned to the plaintiff after the same became due.” That D. G. Lee and Bohan were holders for value before maturity stands, therefore, admitted by the pleadings. Presumption adds to this that they took the paper without notice of defense. The consequence is that it did not matter whether the plaintiff took the paper without notice, for value, or before maturity or not. Even had issues been made on this part of the defendant’s special pleas, they would have been immaterial. Equally immaterial were the issues which were actually made by the replications. .

The conclusion of the court in Hitchcock v. Haight, supra, is ours in this case—not that there was error in refusing a judgment non obstante veredicto which should result in our entering such a judgment here (which entry indeed we doubt our right to make under the doctrine of City of Spring Valley v. Coal Co., 173 Ill., 497), but that a new trial should have been granted because the good pleas were not sustained by any evidence, and the .pleas which were sustained by evidence were immaterial. This error is sufficiently assigned.

The point that the withdrawal of the motion for a new trial in order to interpose the motion for a judgment non obstante veredicto, prevented its second interposition, is not well taken.

. We think, moreover, this is a proper case for the court below in furtherance of justice, if a motion is made by either party to that effect, to order a repleader beginning with the pleas to the declaration. The same result would be effected by granting leave to amend the pleadings. Ex parte Pearce, 80 Ala., 195.

The judgment of the Superior Court is reversed and the cause remanded for' proceedings not inconsistent with this opinion, and a new trial.

Reversed and remanded.