Cosmopolitan Life Insurance v. Head

Wade, C. J. 1. The note sued upon was by its terms payable to the order of the maker. It appears to have been simply indorsed by him, “H. J. Head,” and to have been further indorsed as follows: “Pay to The Cosmopolitan Life Ins. Co. of Atlanta, Ga., or order. Cosmopolitan Life Insurance Company, by Wm. A. Wright, Ins. Com’r, State of Gedrgia, in charge.” “Cosmopolitan Life Insurance Company” and “The Cosmopolitan Life Insurance ComjDany” were entirely different and distinct corporations. Suit thereon was brought by “The Cosmopolitan Life Ins. Company,” as holder. “A promissory note payable to the order of the maker thereof and properly indorsed by him is a negotiable instrument, and the holder is presumed to be such bona fide and for value, and is protected from any defense set up by the maker, acceptor, or indorser, except non est factum, gambling, or immoral and illegal consideration, or fraud in its procurement by the holder.” Pryor v. American Trust &c. Co., 15 Ga. App. 822 (84 S. E. 312); Civil Code (1910), §§ 4286, 4288. None of these defenses were pleaded in the instant case. Knowledge on the part of a bona fide holder of a negotiable note that it was given in consideration of an executory contract or agreement of the payee, even though [219] the consideration be expressed in the instrument itself, will not deprive the indorsee of the character of ’ a bona fide holder, unless he had notice of the breach of such agreement by the payee; and it has been often held that such a transferee is not bound to make inquiry as to whether or not there has been such a failure. Bank of Commerce v. Barrett, 38 Ga. 136 (95 Am. D. 384); Post v. Abbeville & Waycross Railroad Co., 99 Ga. 333 (35 S. E. 405); Citizens Bank of Vidalia v. Green, 13 Ga. App. 49 .(76 S. E. 795); Simmons v. Council, 5 Ga. App. 386 (63 S. E. 338); Brooks v. Floyd, 13 Ga. App. 530 (77 S. E. 877); Fryer v. State, 12 Ga. App. 533 (77 S. E. 830); McMillan v. First. National Bank, 13 Ga. App. 33 (78 S. E. 734); Hudson v. Best, 104 Ga. 131 (30 S. E. 688); 3 R. C. L. 1067, § 373. Defendant, however, contends that the indorsement “Cosmopolitan Life Ins. Co., by Wm. A. Wright, Ins. Com’r. State of Georgia, in charge,” was a sufficient fact of itself to prevent the presumption from applying that the plaintiff was a bona fide purchaser without notice. This contention is without merit. In Wade v. Elliott, 11 Ga. App. §46 (75 S. E. 989), it was held that the law presumes that a holder of a negotiable paper bought it before maturity and for value, and that a transfer by a bankrupt court did not prevent the transferee from being a bona fide purchaser. 2. The following documentary evidence was inadmissible: “Cosmopolitan Life Insurance Company of Atlanta, Ga. Series No. 3-A 39 No. Shares 3. Eeceipt for stock settlement. Receipt. $400. Received of H. J. Head four hundred dollars (note) $400, in full payment for two shares of the capital stock of the Cosmopolitan Life Insurance Company, of Atlanta, Ga. It is understood that no person except an executive officer of the company has or shall have power to bind the company by the making of any contract for the acceptance of the subscription of the same number as this receipt. If the settlement is accepted, notice will be promptly mailed. If not accepted the settlement will be promptly returned. Not valid unless countersigned by the agent. Dated at Tunnel Hill, Ga., 6/38/1913. J. L. Holbrook, Agent, Cosmopolitan Life Insurance Company.” A transferee of a negotiable paper who receives it before it is [220] due cannot be affected by an agreement between other parties thereto, in the absence of notice. Dorris v. Farmers & Merchants Bank, 22 Ga. App. 514 (96 S. E. 450). It will be noted that the receipt is signed by “Cosmopolitan Life Insurance Company,” an entirely different and distinct corporation from “The Cosmopolitan Life Insurance Company,” which sued on the note. No statement was made by counsel as to what evidence they proposed to offer in connection with the receipt, and' no foundation was laid for its introduction, and the rejection thereof was therefore proper. See Hatcher v. National Bank, 79 Ga. 542 (2) 544 (5 S. E. 109). •3. The defendant, having admitted a prima facie case, thereby assumed the onus of proving his defense, and there being no evidence whatever introduced in his behalf, a verdict in favor of the plaintiff was demanded; the trial judge did not err in directing such a verdict, and his judgment granting a first new trial to the defendant must be Reversed. Jenkins and Luke, JJ., concur.