Bradley v. Bush
Before: Gray, Smith
Synopsis
Action against Payee on Notes as Indorser—Pleading—General Issue — Evidence — Indorsement to Maker—Title through Maker.—In an action by an administrator against the payee of notes as an indorser thereof, where the ease was tried upon the theory that a general denial in the answer was sufficient to raise an issue, except as to the execution of the notes, it was error to exclude evidence to show that the notes were transferred by the indorsement to the maker, and were to be surrendered up thereto, and were to be transferred by the maker as evidences of debt secured by mortgage, in consideration of advances to be made to the maker by plaintiff’s intestate.
Id.—Effect of Transfers—Right of Action against Payee not Transferable by Maker.—The indorsement and surrender of the notes to the maker, with the understanding that they were to be transferred by the maker with the benefit of the mortgage security, was merely to keep the notes and security therefor alive for purposes of such transfer by the maker; but as the maker could not acquire any right of action upon the indorsement made thereto by the payee, no such right could be transferred by the maker, and the mere title to the notes was vested in the transferee of the maker.
Opinion — Smith
SMITH, J.
Appeal from an order denying the defendant’s motion for a new trial.
This is a suit by the administrator of an alleged indorsee against the defendant as maker and indorser of two promissory notes of the Sunset Vineyard Company, of date January 25, 1892, for the sum of one thousand dollars each. The notes became due on January 1, 1898, and on non-payment were duly protested and notice of dishonor given to the defendant.
The complaint alleges that the defendant, on or before. February 1, 1894, for value received, duly indorsed, transferred, and delivered said promissory notes to the deceased, Bradley, the indorsee, and that at the time of his death he was the owner and holder of the notes. The answer “denies each and every material allegation” of the complaint; and as the case seems to have been tried upon the theory of the sufficiency of this denial, all of the allegations of the complaint are to be regarded as denied, with the exception of the execution of the promissory notes, which are set out at length. It is also affirmatively alleged that the note sued on was secured by a mortgage on real property; that there was no
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consideration for the alleged indorsement and transfer; and, for separate defense, in effect, that the notes in question were two of thirty promissory notes made to defendant by the Sunset Vineyard Company as part of the purchase price of certain lands sold to it by the defendant, which at the time of the indorsement had been set to vineyard, and were being operated as such by the company, which owned no other land; that the company, of which Bradley was a large stockholder, was at that time heavily indebted and pressed by its creditors, and it thus became necessary for them to raise a large amount of money, which could be borrowed only from Bradley; and further (in terms), “that plaintiff’s intestate, James A. Bradley, shortly prior to the indorsement of the notes sued on by defendant, complained to defendant (who was a stockholder and director of the company), that the Sunset Vineyard Company had paid a sum for its real estate greatly in excess of its value, and desired defendant to surrender some of the notes given to him as part of the purchase price for said land, and the said James A. Bradley wanted and was anxious to continue the raising of grapes and in pursuing the business of the corporation, as aforesaid; [that] it was then proposed by said James A. Bradley to defendant Bush that if he (Bush) would surrender the two notes in this action sued upon, said Bradley would advance to the corporation, Sunset Vineyard Company, the face value of said notes, with interest, which said proposition was accepted by defendant Bush, and thereupon said Bush indorsed said notes,' and the moneys realized thereon were applied to the payment of the debts of the said corporation and the further carrying on of its business. ’ ’
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