Park v. Funderburk

September 26, 1910. The opinion of the Court was delivered by The defendants bought a stallion called "Capuchin" from McLaughlin Brothers, of Columbus, Ohio, at the price of $3,500 for which they gave three plain negotiable notes. At the same time McLaughlin Brothers gave the defendants a separate paper containing certain guaranties with respect to the soundness and capacity of the horse. The plaintiff, claiming to be an indorsee and purchaser for value before maturity, brought this action on the note for $1,166 due December 1, 1907. The defendants denied in a qualified way that they had given the note, and set up the failure of McLaughlin Brothers to make good their guaranties, and the return of the horse to them; they denied the transfer of the note to the plaintiff, and alleged that if the transfer had been made the plaintiff took it with notice of their defenses.

On the trial the Circuit Judge directed a verdict in favor of the plaintiff, and the question made by the appeal is whether the evidence admitted of any other inference than that the plaintiff had acquired title to the note by indorsement before maturity without notice of a valid defense thereto.

The plaintiff introduced the note with the name of the payee written on the back, and testified that he bought it in the regular course of business giving his bank check for the purchase money without notice of the consideration or of any collateral agreement or of any defense. The check for $1,100 indorsed by McLaughlin Brothers was also introduced. The defendants insist that there was no evidence that the indorsement of the name of the payees was made by them or by their authority; but this position is untenable, since the plaintiff testified that the note was delivered to him by one of the members of the firm of McLaughlin Brothers with the firm name written thereon. Obviously this was an adoption by the firm of the signature on the back of the note; and a signing authorized by a party or adopted by him is quite as good as a signature written by his own hand. But aside from this evidence, the holder of a promissory note with the name of the payee indorsed thereon is presumed to be the indorsee for value before maturity without notice. FirstNational Bank v. Anderson, 28 S.C. 143, 5 S.E., 343; 32 S.C. 538,11 S.E., 379; 8 Cyc., 229. There was no evidence whatever offered by the defendants on this point contrary to that of the plaintiff, or tending to overcome the presumption of law.

The defendants next contend that the Court should have submitted to the jury the question whether the note was invalid in the hands of the plaintiff because there was evidence that it had been procured from the defendants by the fraudulent representations of the payees of the note to the effect that it was not a negotiable promissory note but a paper expressing conditional liability. No principle is better established than that the fraudulent representations of the payee of a promissory note as to the nature of a paper which can be plainly read will not avail the maker in a suit brought by the indorsee for value before maturity without notice. Sims v. Lyles, 1 Hill, 39; Hand v. Savannahand Charleston Railroad Company, 17 S.C. 219.

The position on behalf of the defendants M.C. Gardner, Samuel Laney, and W.S. Langley that there was no evidence of their signing the note is not well taken. The defendants T.M. Belk, L.M. Clyburn and L.S. Elliott testified in effect that all the defendants signed the notes and there was no evidence to the contrary.

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