Woodall & Sons v. People's National Bank

HARALSON, J. — There is no merit in the demurrers to the complaint. The institution of a suit in a court of this state by a foreign corporation is not an act of business therein, and may be done without having a place of business or an agent in this state. The mere fact of drawing notes or bills by such a corporation does not iinply the transaction of business in the state. — Goo'lc v. Rome B. Go., 98 Ala. 409, 12 South. 918. The two drafts sued on might well have been described in one count. — Bird v. Danniel, 9 Ala. 302; Code 1896, § 3292. The bills or drafts in this case were each dated May' 12, 1904, one payable June 1, and the other December 1, 1904. They are both alike as to amount, and differ only as to the date of payment. The first is as follows: “|73.00 Atlanta, Ga., May 12, 1904.' “June 1/05, pay to the order of the Southern Wholesale Jewelry Co. seventy-three dollars, value received, and charge to the account of “Southern Wholesale Jewelry Co., “By O. P. Linebury, Treasurer. “To H. T. Woodall & Son, Milltown, Ala.” Written across the face is: “Accepted 5 — 12—04. Payable, Roanoke, Ala. H. T. Woodall & Son.” Indorsed on the back are the words: “Southern Wholesale Jewelry Co., O. P. Linebury, Treas. Transferred to the People’s National Bank, for value received, this 27th day of May, 1904. [Signed] Southern Wholesale Jewelry Co., by W. E. Britt, Pres. No response.” These drafts were bills of exchange. As was said in Anderson v. Jones, 102 Ala. 538, 14 South. 871, of a similar paper: “The order was in writing. It was drawn by one person upon another, payable in money to a designated payee, not out of any special fund, but general [580] ly, for a specific amount. * * * It has every characteristic of a bill of exchange, and we think comes within the purview of the statute.” — 4 A. & E. E. Law (2d Ed.) 76. The defendant pleaded five pleas, the first, the general issue; the second, want of consideration, the third and fourth, fraud in the procurement of the notes sued on, and the fifth, failure of consideration. The judgment entry recites, that issue was joined on these pleas. But replications, as is therein stated, were filed to pleas 2, 3, and 5 (none to the 4th), and rejoinders to replications 2, 3, and 4, and issue was joined on replications to pleas 2, 3, and 5, and on the third rejoinder to replications 2, 3 and 4. The replications to pleas 2, 3, and 5 were, in substance, that plaintiff in the usual course of business, before the papers sued on were due, became the purchaser of said papers for a valuable consideration, without notice of the alleged want of consideration in the same, Avithout notice of any defense to the same, and of any of the transactions alleged in said pleas. Issue was joined on these replications, as the judgment entry recites. The defendant rejoined to replications 2, 3, and 4, first, by denying the truth of the replications; second, that plaintiff discounted and acquired said drafts, with the understanding that if the same Avere not paid, that the Southern Wholesale Jewelry Company should take up and pay the same, and third, that said bank, did not make an absolute and bona fide purchase of said instruments, but said purchase was a conditional one. The sum and substance of all this much pleading was, that the bank suing, on these notes, and the transferee of the same, was not a bona fide purchaser of them for value, without notice of the alleged infirmity in them for fraud in their execution. [581] Plea. 4, upon which issue ivas joined by plaintiff, sets up fraudulent representations by the original payee, by which the defendant was induced to sign the bills or drafts, and presents, prima facie, a good defense, and puts on plaintiff to reply that he purchased the bills in good faith for value, before maturity, and without notice of the alleged infirmity. — Ala. Nat. Bank v. Halsey, 109 Ala. 196, 19 South. 522. “It is a principle of general recognition, that a purchaser of commercial paper in the usual course of businenss, before its maturity, for a valuable consideration, having no notice of defenses that existed between the original parties, or have subsequently arisen, is a bona fide holder for value, and, as such, takes the instrument free from defenses which were available between the original parties. — Randolph on Com. Paper, § 14; 2 Daniel on Neg. Instr. 769. * * * We have gone to the extent of holding, that such purchaser is under no legal obligation to inquire of the maker whether there was any defense or any defect in the note (Wildsmith v. Tracy, 80 Ala. 261) ; that in his hands, the instrument is discharged of legal and equitable defenses to which it may have been subject before it'came to him (Capital City Ins. Co. v. Quinn, 73 Ala. 560); that the holder of such paper, transferring it before dishonor, for value, to a bona, fide purchaser, though he may have obtained it feloniously or fraudulently, can confer a title greater than he had, freed from all infirmity, and which will prevail over that of the true owner (Blackman v. Lehman, 63 Ala. 550, 35 Am. Rep. 57),” and such a purchaser will be protected. — Brown v. First Nat. Bank of Tusca., 103 Ala. 126, 15 South. 435. Plaintiff’s demurrer to the sixth plea was properly sustained. A negotiable paper, valid in the hands of the original holder, may be bought and sued on as any other [582] chattel, at its real or supposed value, and the transfer of such instrument at a discount greater than the legal rate of interest, is not usurious, although the transferror may have .indorsed it, and such discount does not deprive the transferee of the protection of a bona fide purchaser. — King v. People’s Bank, 127 Ala. 266, 28 South. 658; C. C. Ins. Co. v. Quinn, 73 Ala. 558. In Ala. National Bank v. Halsey, 109 Ala. 197, 19 South. 522, it was held that when the defendant pleaded he was induced to execute the note sued on, by misrepresentations made by the agent of the payee, and plaintiff replied that he purchased the note in regular course of business, for -value, béfore its maturity, in good faith, and without notice of the alleged misrepresentations; and the evidence showed without conflict, that the note had been purchased by the plaintiff in the usual course of business, for value, and before maturity — the burden was cast on the defendant to show that plaintiff had knowledge or notice of the infirmity of the transaction, growing out of said alleged misrepresentations; and in ■the absence of any evidence that plaintiff had such knowledge or notice, evidence offered by the defendant to prove said alleged misrepresentations was inadmissible. In the case before us, as we have seen, the plaintiff replied to defendant’s pleas, that he was a purchaser of the bills sued on for value, before their maturity, without any notice of a want or failure of consideration in the same, without notice of any defense to the same or of any of the matters alleged in said pleas. On this replication, the burden of proof was cast on the plaintiff to show that the bills were purchased by him before maturity, and for a valuable consideration. - — Ross v. Drinkard’s Admer, 35 Ala. 434. The plaintiff undertook to do. this by depositions of one Thompson. [583] On motion of the defendant^ the answers to the direct interrogatories were excluded. But the court overruled the motions of defendant to exclude the answers of Thompson to the cross-interrogatories; and in this, we are of opinion, the court fell into error. It is clear, from an inspection of these answers, that the witness had no personal knowledge of the purchase of the instruments sued on, by the plaintiff, and that all the knowledge he had was derived from hook entries not made by him nor by any one in his presence. We do not find as insisted by appellants that the averments of plea 4 were proven . Reversed and remanded. Tyson, C. J., and Anderson and Denson, JJ., concur.