Anglo-California Trust Co. v. Wallace

TYLER, P. J.

This was an action brought to recover judgment upon certain promissory notes executed by the defendants, who were doing business under the firm name

[626]

and style of George J. Wallace & Company. The notes were four in number and were in the principal sum of five hundred dollars each, and were made payable to their codefendant, Emma B. Freeman. They were all executed on August 29, 1919, and matured thereafter in two, three, four, and five months, respectively. On the twentieth day of October, 1919, and prior to maturity thereof, they were indorsed by the payee to respondent, Anglo-California Trust Company. The first two notes having become due and not having been paid, suit was filed thereon on December 12, 1919, and thereafter on March 1, 1920, and after their maturity another suit was instituted on the two remaining notes. Defendants by answer set up certain defenses, including fraud and rescission. The actions were consolidated, the parties and questions being identical. At the trial and before the submission of the cases, the defendants other than Emma B. Freeman duly moved the court for permission to file certain answers supplementary and to reopen the cases for further testimony. These motions were denied for the reason, as found by the court, that plaintiff accepted the notes before maturity for a valuable consideration and without notice of the alleged defenses attempted to be set up in the proposed amended pleading. It is the contention of appellants that this finding is not supported by the evidence. Defendant • Emma B. Freeman has not appealed. It is admitted that the notes were indorsed by the payee and transferred to respondent before maturity. It is also admitted that at the time of the indorsement Emma B. Freeman was a customer of respondent and was indebted to it, and that she received additional accommodation in the nature of advances on the strength of the notes so indorsed, and that they were held by respondent as security for the payment of this indebtedness. It is further conceded that there is nothing in the evidence to show that prior to the transfer the Trust Company had any knowledge of the alleged defenses of appellants.

Notwithstanding these admissions, it is urged that the evidence disclosed certain facts which altered and changed the position of respondent as holder of the notes in due course to that of holder after maturity, and that such facts