Iowa City State Bank v. Milford

BUCK, J. This is a suit by the Iowa City State Bank against R. G. Milford, seeking a recovery, as assignee, upon a note in the principal sum of $100, with interest at 6 per cent, from September 26, 1914. From a judgment in favor of defendant, the plaintiff has appealed. [1] The note was given by appellee to the Franklin Price Company in payment of certain goods ordered by Milford and was made payable in four installments of $25 each, due three, five seven, and nine months after date. On the back of the note it was indorsed: “December 7, 1914. Pay Iowa City State Bank, Iowa City, Iowa, or order. [Signed] Franklin Price Company, by M. H. Taylor.” The evidence shows without dispute the following facts: That the note was received hy Franklin Price Company in Iowa City from its traveling salesman on September 26, 1914; said note being attached to the order for the goods for which the note was given and separated therefrom by a perforated line. The order provided: “The company is authorized to detach the below note when this order is approved and shipped.” On September 24, 1914, the day after the note was given, though the note itself seems to have been dated September 26th, Milford wrote to Franklin Price Company, at Iowa City, the following letter: “Gentlemen: On yesterday I booked an order for some of your goods, which since I have considered the proposition I am in no shape to take up this line now; so I am asking you to bold it up for me for awhile. Don’t ship- it until notified; the farmers are not selling their cotton and I will wait and see how things go before opening up a line like that. Hoping this is satisfactory, I remain, “Tours respectfully.” This letter was received by the Franklin Price Company on September 28th, at which time they had already accepted the order and delivered the goods for shipment to the transportation line, and received a bill of lading therefor, dated September 26, 1914. The transfer by the Franklin Price Company to the bank, appellant here, was made on the date alleged, December 7,1914, for a valuable consideration, and prior to the maturity of the first installment. The bank had no knowledge of any infirmity in the note. At the time of delivery to the bank, the note had been detached from the order. We are of the opinion that the evidence shows without doubt that the appellant at the time of the suit was a holder for value, without notice of any infirmity in the note sued on, and was entitled to judgment for the face value of the note, Interest, and attorney’s fees. Therefore it becomes our duty to reverse the judgment, and here render judgment for the appellant for the amount of the note, principal, interest, and attorney’s fees, and it is so ordered. Articles 582 and 589, V. S. Texas Civil Statutes; Daniel v. Spaeth, 168 S. W. 509; Kaufmann & Runge v. Robey, 60 Tex. 308, 48 Am. Rep. 264; Texas Banking & Ins. Co. v. Turnley, 61 Tex. 365; Landon v. Foster Drug Co., 186 S. W. 434; Landon v. William E. Huston Drug Co., 190 S. W. 534; First National Bank v. N. Nigro & Co., 110 S. W. 536. [2, 3] We presume that the trial court entered judgment for defendant, on the theory that because the evidence showed that the note had a perforated edge, tending to show that the note had been detached from some other instrument, and thereby altered since its execution by the payor, it was therefore not shown to be negotiable; and because the evidence showed that the note had been discounted at 10 per cent, in the transfer of it by the Franklin Price Company to appellant bank. But this case is easily distinguishable from Landon v. Halcomb, 184 S. W. 1098. Here, unlike the facts in the cit *885 ed ease, it is shown that, in the written contract between Franklin Price Company and appellee, it was specifically agreed that the note might be detached by the company from the order and contract after said order had been received and approved by the Franklin Price Company. Here it is not shown, as was there, that the goods shipped, prior to the request by the appellee for a postponement of the shipment, were not of the reasonable value of the amount mentioned in the note. In fact, the record is silent as to whether appellee received the goods and used them, or what became of them. Indeed, so far as the record discloses, appel-lee would have had no sufficient defense against the payment of the note, had a suit been brought by the Franklin Price Company as plaintiff. A notice by the consignee, subsequent to the shipment of the goods, to postpone the filling of the order and the shipment, could not be held to invalidate or impair the note given for the purchase price of the goods. In the case of Harrison v. Hunter et al., 168 S. W. 1036, the Amarillo court passed upon a case very similar in its facts and principles to the one under consideration, and held that where an order expressly provided that the note given for the purchase price of goods, the note being attached to the order but separated from it by a perforated line, as here, might be detached from the order, said detachment was not an alteration of the contract, and that thereby the note was not rendered nonnegotiable. [41 In Landon v. Huston Drug Co., supra, this court held that the mere fact that the edge of notes showed perforations indicating that they might have been attached to other paper was not -sufficient to show notice of defects or defenses against them. Judgment reversed and here rendered for appellant. CONNER, C. J., not sitting, serving on writ of error committee at Austin. Footnotes [1] <§=»For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes [2] (&wkey;>For other oases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes