Price Real Estate & Insurance v. Jones

Clarkson, J. The verdict on the second issue was not appealed from by defendants. The matters for our decision are in regard to the judgment as of nonsuit, the instructions of the court below on the first issue, and the admission and exclusion of certain evidence offered on the trial. The deed in trust on the land in controversy from J. L. Price to A. G. Jones, trustee for R. E. Price, to secure bond for $2,600, was dated 5 September, 1914, and due 1 November, 1915, and duly recorded. M. L. Flow testified, in part: “I live in Monroe. I knew the late R. E. Price. I knew the late C. N. Simpson. I am familiar with their handwriting. I have seen R. E. Price write. I saw J. L. Price sign his name a few times. I have seen ‘Squire’ O. N. Simpson write very often. I am thoroughly familiar with his handwriting. I have been connected with the administration of justice for about fifty years as former deputy clerk of court, notary public, U. S. commissioner, and justice of the peace.” He testified to the handwriting of J. L. Price, the maker of the note and deed in trust in controversy, and R. F. Price the/payee in the note and assignor of the note. He also testified that “Pay to— G. N. Simpson” and the notation of interest on the back of the note, etc., was in the handwriting of O. N. Simpson. J. G. M. Yann, administrator of G. N. Simpson, after testimony of Plow, stated the note and deed in trust came into his possession as administrator with other papers considered as assets of the estate of O. N. Simpson. The exceptions and assignments of error to the above testimony of M. L. Flow (5, 6, 7, 8) were abandoned by plaintiff and intervener. The note sued on was a negotiable instrument. C. S., 2982, 2987. G. S., 3040, defines who is deemed- a holder in due course: “Every holder is deemed prima facie to be a holder in due course, but when it is shown that the title of any person who has negotiated the instrument was defective, the burden is on the holder to prove that he or some person, under whom he claims acquired the title as a holder in due course. But the last-mentioned rule does not apply in favor of a party who became bound on the instrument prior to the acquisition of such defective title.” A note payable to a specific person, or his order is *180 negotiable (O. S., 2989). If payable to order, it is negotiated by the endorsement and completed by delivery (C. S., 3010). C. S., 3026, is as follows: “Except where an endorsement bears date after the maturity of the instrument, every negotiation is deemed prima facie to have been effected before the instrument was overdue.” Under the above negotiable-instrument law, when J. L. Price made the negotiable note in controversy to R. F. Price and R. E. Price endorsed and delivered it and it was in the possession of C. N. Simpson at bis death, his administrator became prima facie the holder, he “is deemed prima facie to be the holder in due course.” By due course is meant that C. N. Simpson became the holder before maturity; that he took the note for good faith and value and without notice of any infirmity in the ‘instrument or defect in the title of the person negotiating it. Nothing else appearing, this entitles the holder, the defendant J. O. M. Vann, administrator of C. N. Simpson to recover on the note. By presenting the note, proved to be signed by J. L. Price and proof of the endorsement of the payee R. E. Price (the method of proof in the present casé the assignments of error abandoned, therefore admitted), Vann, administrator of Simpson, makes out a prima facie case, that is, a case sufficient to justify a verdict, but this prima facie case may be rebutted. How ? — By plaintiff and intervener introducing evidence tending to show that the execution of the note had been obtained by fraud and tainted with illegality (infirmity in the note and defect in the title), and thereupon the burden devolved upon the holder in due course, Vann, administrator of Simpson, to show by the greater weight of the evidence, that he acquired the note before maturity, bona fide, for value, without notice of any infirmity in the note or defect in the title (fraud or illegality) of R. E. Price negotiating it. Such notice on the part of the holder means either actual knowledge of the infirmity or defect, or knowledge of such facts that his action in taking the note amounted to bad faith. Holleman v. Trust Co., 185 N. C., 49; Hayes v. Green, 187 N. C., 776; Bank v. Felton, 188 N. C., 386; Proctor v. Fertilizer Co., 189 N. C., 243. Plaintiff and the intervener, A. E. "White, allege and contend: (1) That C. N. Simpson was not a holder in due course, (2) payment in full of the note to R. E. Price, payee in the note, endorser and assignor to Simpson. The contention of payment to R. E. Price would not be good if C. N. Simpson was a holder in due course. The court below, under C. S., 567, on motion of Vann, administrator of Simpson, granted the motion for judgment as in case of nonsuit against plaintiff, Price Real Estate and Insurance Company, and, on the evidence in the case, directed the jury to render a verdict on the first issue in favor of Vann, ad *181 ministrator of Simpson for $2,600, witb interest from 1 November, 1917. In tbis we think there was error. C. S., 1795, is as follows: “Upon the trial of an action, or the hearing upon the merits of a special proceeding, a party or a person interested in the event, or a person from, through or under whom such a party or interested person derives his interest or title by assignment or otherwise, shall not be examined as a witness in his own behalf or interest, or in behalf of the party succeeding to his title or interest, against the executor, administrator or survivor of a deceased person, or the committee of a lunatic, or a person deriving his title or interest from, through or under a deceased person or lunatic, by assignment or otherwise, concerning a personal transaction or communication between the witness and the deceased person or lunatic; except where the executor, administrator, survivor, committee or person so deriving title or interest is examined in his own behalf, or the testimony of the lunatic or deceased person is given in evidence concerning the same transaction or communication.” A. ,E. Woltz testified, without objection, as follows: “In answer to your question to state when the men were in my office, will say it was sometime in November, I should say, I was cleaning up the record and trying to get the mortgage out of the way. It probably was dated 9 November, 1915. I was getting up the encumbrances. J. L. Price and E- E- Price were there. Q. At the time you were there, did you see in his possession, of E. E. Price, a note and mortgage given by J. L. Price? Answer: I did, and he took it and promised to have Mr. Jones cancel it.” The Jones referred to was defendant A. 0. Jones, trustee in the deed in trust securing the $2,600 note. A. E. Woltz was speaking about the $2,600 note and deed in trust in controversy that J. L. Price made to E. E. Price. This evidence of Woltz was not objected to by Yann, administrator of Simpson. We do not think this evidence “a personal transaction or communication between the witness and the deceased person,” etc. It was competent evidence, unobjected to; its probative force was for the jury. In Lane v. Rogers, 113 N. C., 171, it was held that the witness might say she saw the book in the hands of the deceased, at the time and place in question, but not that the deceased handed her the book. Gray v. Cooper, 65 N. C., 183; March v. Verble, 79 N. C., 19; McCall v. Wilson, 101 N. C., 598; Sawyer v. Grandy, 113 N. C., 42; McEwan v. Brown, 176 N. C., 249; In re Bradford, 183 N. C., 6; In re Harrison, 183 N. C., 460. The authorities are to the effect in this jurisdiction that a witness may testify to a substantive, independent fact. This testimony would indicate that on 9 November, 1915, after maturity of the $2,600 note, that *182 J. L. Price gave R. E. Price, and now claimed by Yann, administrator o£ Simpson as a bolder in due course, was in tbe possession of R. E. Price. If tbis be true, tbe probative force is for tbe jury. It is some evidence tbat Yann, administrator of Simpson, is not a bolder in due course and tbe note in tbe bands of Yann, administrator, is subject to any equities tbat tbe plaintiff and Woltz can show by competent evidence, either direct or circumstantial. There was error' in granting tbe nonsuit as to plaintiff and tbe charge as given by tbe court below. New trial.