Griffin v. Blackshear Bank , 66 Ga. App. 821 ( 1942 )

1. The evidence demanded the finding that the plaintiff as transferee of the note sued on was a holder in due course.

2. There being no denial under oath by the defendant of the validity of the indorsement, it was not necessary to prove the validity of the indorsement which was regular on its face.

3. The note being a joint and several obligation, suit was properly brought against the surety alone who resided in the county in which the suit was instituted.

DECIDED MARCH 6, 1942. REHEARING DENIED MARCH 27, 1942. The Blackshear Bank brought suit in the superior court of Brantley County against Carlie Roberson and R. A. Griffin, and alleged that the defendants were residents of the county, that "said defendants executed to Sweat Gaskins one certain promissory note . . for $320, dated Sept. 8, 1937, due August 15, 1938," which note was "held and owned" by the plaintiff; that the plaintiff was a holder in due course; that a copy of the note with all indorsements and credits thereon was attached and made a part of the petition; that the defendants were indebted to the plaintiff on such note in the principal sum of $279.18. On the back of the copy of the note attached to the petition there appeared a credit to wit: "8/18/38. Paid $65." There appeared also on the copy of the note attached to the petition the following indorsement: "Sweat Gaskins, by Mrs. S. P. Sweat, by L. E. Sweat, her attorney in fact." Process was issued requiring both defendants to appear at the next term of the court. The sheriff served Griffin in person, but as to Roberson he made the following return: "After diligent search I am unable to find Carlie Roberson, within defendant, within limits of Brantley County, Georgia, or his residence therein." Griffin filed his answer in which he admitted his residence and alleged that Roberson was a bona fide resident of Wayne County, Georgia, and the return of the sheriff shows "non est inventus." In his answer Griffin admitted the execution of the note but alleged that the plaintiff was not a holder in due course, but that it acquired the note "subject to all equities, pleas, and infirmities between original parties." The answer admitted the copy of the note attached to the petition, and also admitted that the note was unpaid. The allegation of the petition as to the indebtedness of the defendants to the plaintiff on the note was denied. For further plea Griffin alleged that Roberson bought from Sweat Gaskins, on September 8, 1937, "one dapple-gray mare mule, 6 years old, and that Sweat Gaskins took retain-title note $320 and same is of record . . office clerk superior court of Brantley Co. Ga.;" that at the same time on the same date the note sued on was signed by Carlie Roberson and indorsed by E. A. Griffin "the mule was actually purchased by Carlie Roberson;" that "on Aug. 18, 1939, due date, $65 was paid on note sued on to Sweat Gaskins and a receipt signed by Lonnie Sweat, attorney in fact;" that "Sweat Gaskins were the holders of note sued on on due date;" that on February 23, 1939, after maturity, the plaintiff notified Roberson "that the note was in favor of Sweat Gaskins with copy to R. A. Griffin;" that "Sweat Gaskins without knowledge and consent of R. A. Griffin took back the mule sold and gave Carlie Roberson one bay mare mule, and that Sweat Gaskins took the original mule and sold it to Buie Thomas of Brantley County, Georgia;" that the risk and hazard of Griffin was increased by "this swap of mules and he never agreed to same at any time;" that "this surety and indorser was relieved because payee of note increased the risk or hazard of surety and changed the situation without his consent;" that "this increase of his risk as surety consequently released [him] from all liability to Sweat Gaskins, all done without his consent."

On the trial the plaintiff introduced as evidence the note sued on, showing the credit and indorsement set forth above. The note stated: "August 15, 1938, after date, for value received, I, we, or either of us, promise to pay to the order of Sweat Gaskins" $320. Griffin introduced evidence that he signed the note, and that Roberson signed it on September 8, 1937, when Roberson was a tenant on the farm of this defendant, and the consideration of the note was for one gray mule; that all he knew about the transaction was that Sweat (evidently L. E. Sweat) and three other persons, including Roberson, came to the house of this defendant one night about 9 o'clock and requested him to indorse the note which Sweat stated was for one gray mare mule; that this defendant indorsed the note; that he knew the note was due on August 15, 1938, and on that day Roberson paid "Mr. Sweat $65 and Mr. Sweat gave him a receipt for it in my presence;" that the receipt was given in the office of Sweat; that this receipt was signed "Sweat Gaskins by L. E. Sweat;" that Sweat did not tell him anything about the Blackshear Bank having bought the note; that he did not say anything about his not owning it but took the money for it; that he did not make the receipt out to the bank and nothing was said about the bank owning the note; that previous to that time he had no notice from the bank and didn't know anything about the bank "being supposed to own that paper." L. E. Sweat testified for the defendant that he gave the receipt to Griffin; that at that time the bank owned the note as he had put it up as collateral with the bank for the loan; that the bank had it about sixty days after the note was signed; that he never notified Griffin that he had sold the note to the bank; that it wasn't customary "for us to do that;" that his recollection was that either Griffin or Roberson went with him to the bank on one occasion to see about the note and that he thought both of them knew that the note was in the bank. Roberson testified that he made a payment on the note while he was a tenant of Griffin; that the payment was made to Lonnie Sweat; that Sweat never told him that the bank had the note; that he was not a resident of Brantley County when suit on the note was instituted, but lived in Wayne County; that he was in Brantley County when Griffin indorsed the note for him.

Griffin testified that on December 29, 1939, he received a letter addressed to him at Nahunta, Georgia, from L. E. Sweat at Blackshear, Georgia, in which nothing was stated about the bank owning the note, which letter read as follows: "Your letter of yesterday received and have hastened to reply. Now, Avant, you signed the first note, and the mules exchanged to satisfy both you and him. I am holding you as surety for the debt, and if you insist on the first mule being sold at public outcry please be assured that we can arrange this matter. I shall expect to hear from you immediately, as I intend to adjust the situation out there, and you can have it just as you wish. Yours very truly, L. E. Sweat."

The judge directed a verdict for the plaintiff. The defendant moved for a new trial on the general grounds, and by amendment added several special grounds which are but amplifications of the general grounds, and alleged that the court erred in directing a verdict for the plaintiff because the evidence presented issues of fact as to whether the plaintiff was a holder in due course of the note. Griffin also contended that the court erred in refusing to permit him to introduce evidence in support of his plea that his risk as a surety had been increased by transactions between the plaintiff and the maker of the note, Roberson, to which this defendant was not a party and of which he had no knowledge. The judge overruled the motion for new trial, and the defendant excepted. A holder in due course of a promissory note is one who has taken the instrument under the following conditions: (1) that it is complete and regular on its face; (2) that he became the holder of it before it was overdue, and without notice that it had been previously dishonored, if such was a fact; (3) that he took it in good faith and for value; and (4) that at the time it was negotiated to him he had no notice of any infirmity in the instrument or defect in the title of the person negotiating it. Code § 14-502. Evidence tending to show possession of the note by the payee after maturity may rebut the presumption that the holder of the note, who is the transferee, is a holder in due course. The transfer or indorsement of the note sued on is not dated. There is positive direct testimony by Mr. Sweat that the note was transferred to the plaintiff bank as collateral for the loan about sixty days after the execution of the note, which was necessarily before the note matured, and that when the defendant made to Sweat a payment on the note on the day of its maturity the bank at the time owned the note. Sweat appears to have been unimpeached. This evidence, without more, is as a matter of law sufficient to establish conclusively and without dispute that the bank had acquired title to the note for value before its maturity and was therefore a holder in due course. There is no evidence that the bank afterwards surrendered the note to the payees or any one else. At the time of suit the bank was a holder of the note. The only evidence that could be relied on in rebuttal or contradiction of Sweat's testimony that the note had been transferred to the bank before maturity, and that the bank on the date of maturity when the defendant made a payment thereon to Sweat was the owner of the note, is that Sweat took the money and said nothing at the time about the ownership of the note, and that before that time the defendant had never received any notice from the bank. There is no evidence that Sweat, when the payment on the note was made to him, had possession of the note. The facts that Sweat took the payment on the note and at the time said nothing about the note's ownership by the bank and that it does not appear at the time he had the note, and that the defendant had before that time received no notice from the bank, are as consistent with the bank's ownership of the note at the time, and of its having acquired the note before maturity for value, as with the bank's non-ownership of the note and of the bank's not having acquired it for value before maturity. Before circumstantial evidence can have any probative value to rebut or contradict direct and positive testimony of an unimpeached witness of the alleged facts in question, such evidence must point at least more strongly to a conclusion opposite to the direct testimony. It is not sufficient that such circumstantial evidence points equally one way or the other. Federal Reserve Bank v. Haynie, 46 Ga. App. 522 (168 S.E. 112). In Frazier v. Georgia R. c. Co., 108 Ga. 807 (33 S.E. 996), it was held: "When a plaintiff's right to recover depended upon the establishment of a particular fact, and the only proof offered for this purpose was circumstantial evidence from which the existence of such fact might be inferred, but which did not demand a finding to that effect, a recovery by the plaintiff was not lawful, when, by the positive and uncontradicted testimony of unimpeached witnesses, which was perfectly consistent with the circumstantial evidence relied on by the plaintiff, it was affirmatively shown that no such fact existed."

There is no denial under oath by the defendant of the validity of the indorsement on the note. Without such denial the indorsement, where it appears regular on its face as it does here, need not be proved. Code, § 20-805. A denial that the plaintiff is a holder of the note in due course is not a denial of the validity of the indorsement as contemplated in the Code, § 20-805. Nor does such denial deny the authority of the indorser to act in indorsing the note as attorney in fact of the payee or transferor.

The note is a joint and several obligation, and suit was properly maintained against the surety only who resided in the county. It is immaterial that suit was not brought against the principal who resided in another county. The defendant admitted the execution of the note. The evidence demanded the verdict for the plaintiff, and the court did not err in so directing.

Judgment affirmed. Sutton and Felton, JJ., concur.