Leathers v. Turner

The court did not err in overruling the demurrers and renewed demurrers to the petition as amended.

DECIDED MARCH 8, 1947. REHEARING DENIED MARCH 28, 1947. On April 5, 1946, W. B. Turner instituted an action in the Civil Court of Fulton County against P. C. Leathers and Elma Wright, the petition alleging:

1. The defendants are residents of Fulton County, Georgia.

2. The defendants are indebted to plaintiff in the sum of $300 principal, with interest thereon at the rate of 7 percent per annum since June 1, 1923.

3. Said indebtedness arises from a series of six promissory notes, all dated June 1, 1923, all payable to P. C. Leathers, each for the principal sum of $50, all bearing interest from date at 7 percent per annum, all signed by Mrs. Elma Wright, all indorsed by P. C. Leathers in blank and falling due, one on October 1, 1928, one on November 1, 1928, one on December 1, 1928, one on January 1, 1929, one on February 1, 1929, and one on March 1, 1929; a copy of said notes being hereto attached as "Exhibit A."

4. All of said notes are due and are unpaid. The plaintiff prays that he "recover of the defendants . . $300 principal, together with interest on said sum at . . 7 percent per annum from June 1, 1923." Each copy of said six notes attached to the petition as "Exhibit A," is for the principal sum of $50, dated June 1, 1923, signed "Mrs. Elma Wright," payable "to the order of P. C. Leathers," and for "part of the purchase-money for No. 30 Olympian Circle North." In each of said notes the maker and indorser waive all homestead exemption rights, and each note recites that the maker had "given 29 notes for the deferred payments for a certain lot of land, as shown by See, deed this date aggregating $1920." Each note contained a provision that time was of the essence of "this trade," and that "if any of such notes shall become due and remain unpaid . . longer than 10 days after maturity," then all the notes shall be due. The due dates of the notes appear in paragraph 3 of the petition. P. C. Leathers' blank indorsement does not appear on the copy notes attached to the petition.

P. C. Leathers demurred to the petition as follows: "1. Said petition fails to set forth a cause of action at law in that; (a) it fails to allege the plaintiff is the holder or owner of said notes or has any right or title to the same; (b) it does not allege when or from whom the plaintiff obtained said notes, or by what right the plaintiff brings this action; (c) as to this defendant it fails to set forth a cause of action, because it fails to allege presentment for payment, and dishonor by the maker, and notice thereof to this defendant as indorser, and notice is not waived in said notes. Therefore, as to this defendant there is no liability upon said notes, he, P. C. Leathers, being an indorser as alleged in paragraph three of plaintiff's petition; (d) that said petition fails to allege the notes sued upon were presented for payment, that payment was refused, and that notice of dishonor was given to this defendant, he being an indorser on said notes."

After the foregoing demurrer had been filed, W. B. Turner amended his petition as follows:

"1. The notes herein sued on were part of a series of purchase-money notes given by Elma Wright to P. C. Leathers and secured by purchase-money security deed recorded in Deed Book 741, page 118, Fulton County Records. 2. W. B. Turner sold a house as agent for P. C. Leathers and P. C. Leathers owed W. B. Turner a commission therefor of $300. 3. In order to secure the payment of the said . . $300, for which he was indebted to W. B. Turner, on or about January 1, 1924, P. C. Leathers indorsed said notes to W. B. Turner. 4. P. C. Leathers retained all of the remainder of said notes in said series."

After the foregoing amendment had been allowed, P. C. Leathers demurred as follows:

"1. This defendant renews each and all of the grounds of his original demurrer . . and insists upon the same as against said petition as amended. 2. Said petition as amended fails to set forth a cause of action against this defendant. 3. It appears from the allegations of plaintiff's petition as amended that P. C. Leathers was indebted to him upon an open account, and more than four years had elapsed since the date of the maturity of said account. Therefore it is barred by the statute of limitations, and for this reason said petition fails to set forth a cause of action. 4. It is alleged that P. C. Leathers is indebted to W. B. Turner in the sum of $300, and the notes set out as an exhibit were not negotiated or transferred to said W. B. Turner, but were pledged with him `to secure the payment of the said sum of $300.' Therefore said W. B. Turner has no cause of action against this defendant upon said notes, and plaintiff has no right to maintain a suit against this defendant. 5. That plaintiff seeks by said amendment to set up a new, separate, and distinct cause of action, in that the original suit declares upon the notes, whereas, by this amendment it is sought to set up against this defendant a liability for commissions growing out of a real-estate deal, or, upon an open account. 6. Wherefore, defendant prays that these his grounds of demurrer be sustained and said petition dismissed."

The court ordered that "the defendant's demurrers and renewed demurrers to plaintiff's suit as now amended, be . . overruled;" and to that judgment P. C. Leathers excepted. P. C. Leathers insists first that the court erred in overruling subparagraphs "c" and "d" of his demurrer to the original petition. These subparagraphs aver that the petition failed to set out a cause of action because it did not allege presentment of the notes to the maker for payment and notice of their dishonor to the defendant indorser, Leathers; there being no waiver of such notice. The negotiable-instruments law provides that, "Except as herein otherwise provided, presentment for payment is necessary in order to charge the drawer and indorsers." Code, § 14-701 (Ga. L. 1924, p. 141). Code, § 14-801 (Ga. L. 1924, p. 144) reads: "Except as herein otherwise provided, when a negotiable instrument has been dishonored by nonacceptance or nonpayment, notice of dishonor must be given to the drawer and to each indorser, and any drawer or indorser to whom such notice is not given is discharged." If plaintiff was bound by the above provisions of the negotiable-instruments law subparagraphs "c" and "d" should have been sustained. If he was not so bound, these subparagraphs were properly overruled, since under the prior law there were no such requirements. See Code (1910), § 4280. Code, § 102-104 reads in part: "Laws prescribe only for the future; they can not impair the obligation of contracts, nor, usually, have a retrospective operation. Laws looking only to the remedy or mode of trial may apply to contracts, rights and offenses entered into or accrued or committed prior to their passage." In Smith v. Pindar RealEstate Co., 187 Ga. 229, 236 (200 S.E. 131), the court approved the rule of construction stated in Moore v. Gill,43 Ga. 388, 390: "The settled rule for the construction of statutes, is not to give them a retrospective construction, unless the language so imperatively requires." In Seaboard AirLine Ry. Co. v. Benton, 175 Ga. 491 (3), 498 (165 S.E. 593), the court said: "The act (Ga. L. 1929, p. 315) does not express the intention of the General Assembly that it shall apply to litigation over causes of action which arose previously to the passage of the act, and must be construed to apply to subsequent actions. Moreover, it is not such a remedial act or rule of evidence as may be applied retroactively. . . In Bank of NormanPark v. Colquitt County, 169 Ga. 534 (150 S.E. 841), this court said: `Laws prescribe only for the future . . and retrospective statutes are forbidden by the first principles of justice. The settled rule for the construction of statutes is not to give them a retrospective operation, unless the language so imperatively requires.' . . By reason of the authorities cited above, this court feels bound to construe the statute of 1929 as applicable only to the future, and not to suits pending at the time of its passage, for the recovery of damages where the injury occurred previously. That would be true whether the act of 1929 is construed to be a remedial act or a rule of evidence, or whatever its nature. It is an unquestioned truth that, `Laws looking only to the remedy or mode of trial may apply to contracts, rights, and offenses entered into or accrued or committed prior to their passage' . . assuming that the statute is remedial, and falling within Code, § 6 [Code, § 102-104, supra], the legislature could have made it retroactive. In fact it did not do so."

Our view is that the rule that, "The settled rule for construction of statutes is not to give them a retrospective operation, unless the language so imperatively requires," applies both to laws looking only to the remedy or mode of trial and to laws which affect vested interests. Conceding that the requirements of the negotiable-instruments law as to the presentment and notice of dishonor of negotiable instruments affects only the remedy, we find nothing in that law that requires a holding that it was to have a retrospective operation. We therefore hold that the court did not err in overruling subparagraphs "c" and "d" of the demurrer to the original petition.

Counsel for the plaintiff in error next insists that the court erred in overruling paragraph 3 of the renewed demurrer. This paragraph avers that the action was barred by the statute of limitations because the petition as amended shows that P. C. Leathers was indebted to W. B. Turner on an open account, and more than four years had elapsed since the date of the maturity of the account. Unquestionably the original petition was a suit on six promissory notes, and we do not think that the cause of action was changed to one on open account because, in response to the demurrer, the plaintiff alleged that on or about January 1, 1924, P. C. Leathers indorsed the notes to W. B. Turner to secure the payment of $300 commissions which Leathers owed Turner. In this connection see Johnson v. Giraud, 191 Ga. 577, 583 (3) (13 S.E.2d 365), which reads: "The lien of an attorney is kept alive where the original open account is within four years converted into a note under seal, and the lien may be foreclosed at any time before suit on the note has become barred by the statute of limitations. . . While originally the debt of the plaintiffs in error was in the form of an open account and was subject to the statute of limitations of four years, and had it remained in the form of an open account for a period exceeding four years it would have become barred by limitation, and if the debt is barred then the lien likewise is barred (Peavy v.Turner, 107 Ga. 401, 33 S.E. 409), yet, as set forth in the intervention, the statute of limitations was avoided by taking a note as evidence of the debt, and no claim is here made that the note is barred by the statute of limitations." The notes in the present case were sealed instruments, and the action was not barred.

Paragraph 4 of the renewed demurrer avers that the notes set out as an exhibit were not negotiated or transferred to W. B. Turner, but were pledged with him to secure the payment of $300 which Leathers owed Turner, and, therefore the legal title to said notes was in Leathers and not in Turner, and Turner had no right to maintain the action against Leathers. "`A bill or note indorsed in blank is transferable by delivery, and the indorsement, so long as it continues in blank, makes the bill or note in effect payable to bearer. Possession of such a negotiable instrument proves property. Chitty on Bills, 253-255; Sterlingv. Bender, 7 Ark. 201 (44 Am. D. 539).' South v. People'sNational Bank, 4 Ga. App. 92 (2) (60 S.E. 1087); Nisbet v.Lawson, 1 Ga. 275, 284; Culpepper v. Culpepper, 18 Ga. App. 182 (3) (89 S.E. 161); Edwards v. Camp, 29 Ga. App. 556 (2) (116 S.E. 210)." Cook v. Griffin, 59 Ga. App. 562 (2) (1 S.E.2d 709). The court did not err in overruling paragraph 4 of the amended demurrer.

Paragraph 5 of the amended demurrer is that "Plaintiff seeks by said amendment to set up a new, separate and distinct cause of action, in that the original suit declares upon the notes, whereas, by this amendment it is sought to set up against this defendant a liability for commissions growing out of a real estate deal, or, upon an open account." It clearly appears from what has already been said that we are of the opinion that the amendment to the petition did not set up a separate and distinct cause of action, and we hold that the court properly overruled paragraph 5 of the demurrer.

For no reason assigned did the court err in overruling the demurrers.

Judgment affirmed. Broyles, C. J., and MacIntyre, J.,concur.