Lowry National Bank v. Seymour

April 18, 1912. The opinion of the Court was delivered by Reversal of the judgment in this case would be a precedent seriously impairing without reason the value of negotiable instruments to the great injury of borrowers, as well as lenders, of money.

The defendant, E.Z. Seymour, made his promissory note at Greenwood, South Carolina, on March 11, 1910, for seven hundred and seventy dollars, payable to the order of Southern Flour and Grain Company on October 15, 1910. The plaintiff, The Lowry National Bank, of Atlanta, Georgia, as an indorsee for value before maturity, brought this action against the maker. The defendant alleged in his answer that the note was given for the purchase money of flour; that the agent of Southern Flour and Grain Company had guaranteed him against a decline in the price of flour, and had also expressly warranted the quality; that the price did decline, and the flour turned out to be below the grade guaranteed; and that the plaintiff was not a purchaser for value before maturity.

After hearing the entire evidence, the Circuit Judge directed a verdict in favor of the plaintiff for the full amount of the note on the ground that the evidence showed beyond doubt that the bank was a purchaser for value before maturity.

The plaintiff offered in evidence the note in its possession, with the name of the payee indorsed thereon. The vice president of the bank, the cashier, the receiving teller, and the discount clerk, each testified that the bank discounted the note, for value, with the indorsement of the payee, on March 12, 1910, and that the note had ever since remained the property of the bank. In addition to this, the discount clerk testified to the correctness of entries made by him on the books of the bank on March 13, 1910, showing the discount of the note on the 12th, and the receiving teller testified to the correctness of a deposit ticket dated March 12, 1910, indicating that the note in suit had been discounted, and the net amount placed to the credit of Southern Flour and Grain Company on that day.

The Court had before it, not only this evidence of the officers of the bank, but also the presumption that the holder of a promissory note with the name of the payee indorsed thereon is an indorsee for value, before maturity, without notice. First National Bank v.Anderson, 28 S.C. 143, 53 S.E. 343; Park v. Funderburk,87 S.C. 76, 68 S.E. 963.

Against this evidence there is not a single positive statement of the witnesses for the defense — nothing that amounts to more than conjecture. The defendant. Seymour, testified on his direct examination that he went to the Bank of Greenwood, which held the note for collection, for the express purpose of examining it and ascertaining whether it had been negotiated by the payees. When asked by his counsel if the indorsement of the payees was on it he could testify only in this language: "To my best recollection it belonged to the parties I bought the flour from. I don't think it had it on it at all, to the best of my recollection. No, sir; I didn't see that — have no recollection of seeing it at all. Yes, sir; I am pretty clear on that — have no recollection of seeing that at all. Pretty positive. Of course, I couldn't be sure, but I don't think it was there." On the cross-examination the witness repeated in substance what he had said to his own counsel, but, with commendable frankness, testified that the indorsement might have been on the note when he examined it, and that he had no independent recollection whether it was or not. This evidence means that after the maker had looked at it to see whether it had been indorsed, he could only testify at the trial that he had some sort of impression that it had not, but no recollection whether it had or not, and that he could not deny that the indorsement was there. Caution in giving testimony, it is true, often indicates that weight should be given to the testimony, but where a witness, deeply interested, institutes an inquiry as to the one particular matter vital to his own interest, that is, whether a name has been indorsed on a paper, and examines the paper to find out, his testimony that to the best of his recollection the indorsement is not there, but that he has noindependent recollection on the subject is not evidence, but mere conjecture. No importance is to be attached to the fact that defendant's counsel after hearing his statement advised him not to pay; that advise is by no means unusual, for where the maker of a note has a good defense against the payee he often wishes to have a trial on the question whether the indorsement was made bona fide, for value, before maturity.

The defendant further submits that there was evidence that the note, though written and dated March 11, 1910, was not signed at Greenwood till the morning of the 12th, and could not have reached Atlanta until four or five o'clock on the afternoon of March 12th, after banking hours. His own testimony was not positive whether the note was signed on the 11th or 12th, but his brother, M.T. Seymour, who signed the note for him, testified positively that the note was not signed until the morning of the 12th, and that he thought the first train that day left Greenwood about eleven or twelve o'clock and arrived in Atlanta after four. This testimony is relied on as evidence that the note could not have reached Atlanta in time for discount on March 12th, the day on which the books of the bank and the testimony of its officers indicated the discount had been made. It is true that banks usually transact their main current business with customers before four o'clock in the afternoon, but it is also true that the custom is by no means invariable, and that it is a general custom of banks at their discretion to accommodate their customers by transacting business with them after the ordinary banking hours. There is not a particle of evidence as to the banking hours of The Lowry National Bank. If the Court should take judicial notice of the usual banking hours, and attribute them to the plaintiff bank, it must also take notice of the custom of banks in departing from them whenever the circumstances seem to them to justify such a course, Even if it be assumed, then, that the note did not reach Atlanta until after four o'clock on March 12, 1910, this fact is no foundation for an inference that the bank did not discount the note on that day. The force of the presumption from the possession of the note duly indorsed that the plaintiff was a bona fide indorsee for value, before maturity, and of the positive evidence of the officers of the bank that the note was so indorsed on 12th March, 1910, is not at all impaired by the evidence that the indorsement could not have been made until after four o'clock on that day.

For these reasons I think it perfectly clear that only one reasonable inference could be drawn from the evidence, and that the Circuit Judge was right in directing a verdict.

The judgment of this Court is that the judgment of the Circuit Court be affirmed.

MR. JUSTICE HYDRICK concurs.

MR. JUSTICE WATTS disqualified.