O'Keeffe v. First National Bank

The opinion of the court was delivered by Johnston, J.: This was an action brought by the First National Bank of Frankfort, Kas., to recover upon a promissory note executed on the 14th day of May, 1883, by H. H. Lowery and Mary E. Lowery to Walter Bowman and Henry Bowman Brady, for $1,500, payable October 1, 1886, with interest at the rate of 8 per cent, pér annum, and also to-foreclose a mortgage executed by the Lowerys upon the same day to secure the payment of the note. The bank alleged in its petition that the payees named in the note, for a valuable consideration, had sold and delivered the note to it before the [349] maturity thereof, and that it was then the holder and owner of the note and coupons as well as the mortgage deed, and was entitled to sue and maintain its action thereon. It was also alleged that default had been made in the payment of the interest due upon the note, and that, according to the terms of the note and mortgage, the whole amount was then due, and that on the first day of October, 1885, there was due the bank thereon the sum of $1,620. There was a further allegation that, subsequent to the execution of the mortgage, the Lowerys had by a deed of general warranty conveyed the land to Jeremiah and Catharine O’Keeffe, and they were made defendants in the action. The O’Keeffes filed an answer, setting forth several defenses, the first of which was a general denial. The Lowerys answered, admitting the execution and delivery of the note and mortgage, for which they received the full amount of $1,500; and the bank replied, denying all the allegations set forth in the answer and cross-petition of the O’Keeffes. At the May term, 1889, a trial was had by the court without a j ury, upon the issues so formed, and the bank offered in evidence the note and coupons, also the mortgage, which were admitted over the objection of the O’Keeffes. No other evidence was offered by either party, and the court awarded judgment against the makers of the note, and decreed the foreclosure of the real estate described in the mortgage. The O’Keeffes now contend that the proof offered is insufficient to sustain the judgment that was rendered. They claim that, as the issues were formed, proof was necessary that the bank was the owner and holder of the note. The note was not indorsed by the payees, and there was no written transfer of the same to the bank, and, as its ownership of the note had been denied, it was incumbent upon the bank to prove that it was the owner and holder of the same. We think the proof offered was sufficient. The note and mortgage were in the possession of the bank and were produced by it at the trial. A negotiable note may be transferred without written indorsement and by mere delivery. The possession of the note and its production at the trial furnished prima fade evidence of [350] ownership in the bank, as between the contending parties in this action. If the controversy had been between the payees and a stranger, a different presumption would arise; but here neither the payees nor the makers are questioning the ownership of the note by the bank; and, as against the plaintiffs in error, who only claim an interest in the premises mortgaged to secure the payment of the note, the bank, holding possession, is prima facie the owner. Some of the considerations presented by the plaintiffs in error would be entitled to great weight if the payees were contesting the ownership of the unindorsed paper with a stranger in possession; but when the bank produced and read the note in support of its title, it furnished presumptive evidence upon which it might safely rest; and nothing being shown to repel the force of the presumption, it was entitled to recover. (Williams v. Norton, 3 Kas. 295; Washington v. Hobart, 17 id. 275; Eggan v. Briggs, 23 id. 710; Savings Association v. Barber, 35 id. 488; Durein v. Moeser, 36 id. 441; King v. Gottschalk, 21 Iowa, 512; Tuttle v. Becker, 47 id. 486; Gill v. Johnson, 1 Metc. [Ky.] 649; Jackson v. Love, 82 N. C. 405; Robertson v. Dunn, 87 id. 191; Garner v. Cook, 30 Ind. 331; Gano v. McCarthy, 79 Ky. 409; Pom. Rem., § 140.) The judgment of the district court will be affirmed. All the Justices concurring.