Eames v. Crosier
Before: Paterson
Synopsis
Action Upon Note—Pleading—Ownership—Assignment.—Although an allegation in an action upon a note that the “ plaintiff is now the holder and owner of the said promissory note” is not sufficient in itself to show ownership in the plaintiff, yet, where it is also alleged that the note when made was delivered to the payee named therein, and that thereafter such payee for value, and before maturity, assigned the note by indorsing the same in blank on the back thereof, such allegation, taken in connection with the allegation of possession, is sufficient to show the plaintiff’s title.
Id.—Effect of Indorsement in Blank. —The effect of indorsement in blank is to make the paper payable to the holder, not as indorsee, hut as hearer.
Id.—Purchase From Bona Fide Holder—Pleading—Variance.—Where the complaint avers that the note was indorsed in blank and delivered by the payee to the plaintiff, and the answer denies such delivery, and alleges that the note was indorsed and delivered by the payee to a third party, who is alleged to he the owner of the note, and the evidence shows that the note was indorsed in blank by the payee and delivered to such third party, who, before the maturity thereof, assigned and delivered it to another person, and that the latter, after maturity, sold and transferred it to the plaintiff, and the court finds that the assignor of the plaintiff purchased, received, and paid for the note in good (faith, without notice of the facts pleaded in the answer, as a defense, such evidence and finding are not outside of the issues raised by the pleadings.
Id.—Notice of Fraud in Procuring Note—Burden of Proof.—Upon proof, by the defendant, of fraud or illegality iii the inception of the note, the burden is cast upon the indorsee to show that he is an innocent holder, which he may do by showing that he purchased the note before maturity, or from an innocent indorsee for value, in the usual course of business; and when he has done this, unless the evidence shows that the note was taken by plaintiff under circumstances creating the presumption that he knew the facts impeaching its validity, the burden is cast upon the defendant to show that the plaintiff took the instrument with notice of the defendant’s equities.
Id.'—Transfer After Maturity—Protection of Holder.—One who takes a note when overdue, from a prior holder who took the note for value before maturity, without notice of any infirmity in it, acquires as good a title as that of the prior holder; though he must show that the prior holder took the note for value before maturity.
Paterson, J. The plaintiff recovered judgment in the court below for the sum of six hundred and eiglityone dollars and fifty-two cents and costs of suit on two promissory notes for two hundred and fifty dollars each, dated May 9, 1889, payable in six and twelve months respectively after date.
It is claimed by the appellants that the second count does not state a cause of action. The point made is that it is insufficient to allege that the “plaintiff is now the holder and owner of said promissory note.” The point would be well taken if this were the only allegation showing ownership in the plaintiff. It is alleged, however, that at the time the note was made it was delivered to Bandholt, the payee named therein, and “that thereafter J. F. Bandholt, for value and before maturity, assigned said note by indorsing same in blank on the back thereof.” This, taken in connection with the allegation of possession, was sufficient to show the plaintiff’s title, the effect of an indorsement in blank being to make the paper payable to the plaintiff, not as an in[262]dorsee, but as bearer. (Poorman v. Mills, 35 Cal. 120; Curtis v. Sprague, 51 Cal. 241.)
It is alleged in the first count that the note was indorsed in blank and delivered by Bandholt to the plaintiff. But the findings and evidence show that the note was indorsed in blank by Bandholt, the payee, and delivered to one Runels, who, before the maturity thereof, assigned and delivered the same to M. M. Talmage; and that the latter afterwards sold and transferred the note to the plaintiff. It is claimed by appellant that, inasmuch as the plaintiff acquired the note after maturity, he can recover only upon showing title in a prior bona fide holder, and that this cannot be done because of the allegation of a direct assignment of the note from Bandholt to himself. The court found that Talmage “purchased and received and paid for said notes in good faith, without notice of any of the facts stated in the answer.” This finding, it is claimed, is outside of the issues raised by the pleadings; and this would be the fact if there were nothing more in the pleadings on the subject than the allegation of the complaint that the note was indorsed and delivered by Bandholt to the plaintiff. In the answer, however, it is denied that Bandholt ever assigned or delivered said note to the plaintiff, and it is alleged that the note was indorsed and delivered by Bandholt to Runels, and that the latter “ is still the owner of said note.” The finding, therefore, is not outside of the issues raised by the pleadings.
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