Harding v. Jenkins

The action is brought on a note of $807.50, made by defendants, in their Arm name of T. J. Jenkins & Bros., to the order of William Kerby, dated March 1, 1897, and payable three months after date. Kerby indorsed the note over to Isaac L. Sheppard & Co., who indorsed the same over to plaintiff. The defense admits the note,- but avers that a trust mortgage covering real and leasehold property was made by the defendants on June 1, 1894, to their creditors, whose names and the amounts of their

The evidence adduced establishes the following uncontradicted facts: The said note was given by defendants to Kerby in payment of ranges sold to him by them. Kerby indorsed and delivered the same within a few days after its date to the firm of Isaac L. Sheppard & Co., of Philadelphia, for value, to wit, credit received on his merchandise account due to said firm for stoves purchased, and that, after the note had become due, said firm indorsed and delivered to plaintiff. Prior to 1894, Kerby had in the neighborhood of $3,000 worth of notes of the defendants, which were given for a good, full, and valuable consideration, viz. stoves and ranges sold and delivered, which notes were renewed from time to time, and the note in suit was a renewal of other notes, which defendants had given prior to 1894. Kerby indorsed and delivered the original notes given prior to 1894 to the said firm of Sheppard & Co., in payment of an indebtedness of his to said firm for stoves, etc.; and all renewals of said notes, including the note in suit, were indorsed and delivered over by Kerby to Sheppard & Co., upon surrender of a previous note. On June 1, 1894, the defendants conveyed some real and leasehold property to a trustee for the benefit of creditors specifically named, to secure payment of specific debts therein specified, including $3,319, for William Kerby. From time to time thereafter, portions of the claim covered by this so-called trust mortgage were paid by dividends declared by the trustee, and the amount thereof was credited on the notes, and the renewal notes were given for the unpaid balances. Finally, an understanding was had between the defendants, the makers of said trust mortgage, and the creditors interested in said trust, whereby certain parcels of land covered by the trust mortgage were allowed to the different creditors in full satisfaction and discharge of their claims. Accordingly, the three creditors,—Kerby, the payee of the note in suit, one Sadlier, and one Lindsay,—on April 22, 1897, accepted jointly a conveyance of the leasehold property, corner Tenth street and Second avenue, in payment of the indebtedness of the defendants to them. Before this conveyance was taken, the defendants informed the creditors that all charges upon the property had been paid up to the time of the transfer; that, after it was taken, they found out that this statement was untrue, and that the arrears for ground rent and taxes amounted to more than the value of the leasehold, whereupon they abandoned it, and the defendants took it back. Defendants alleged and attempted to maintain that Kerby

The mere possession of a negotiable instrument, produced in evidence by the indorsee, or bv the assignee where no indorsement is necessary, imports prima facie that he acquired it bona fide for full value, in the course of business, before maturity, and without notice of any circumstance impeaching its validity, and that he is the owner thereof, entitled to recover the full amount against all prior parties. In other words, the production of the instrument and proof that it is genuine- (where, indeed, such proof is. necessary) prima facie establishes his case; and he may there rest it. “The party making payment should insist on the presentment 'of the paper by the party demanding payment, in order to make sure that it is at the time in his possession, and not outstanding-in another.” Kerby was liable, on said note, and on the series-of notes to Sheppard & Co. and the plaintiff herein, as prior indorser; and whatever security he took or accepted for his protection as first indorser does not affect the subsequent indorsers. The subsequent indorsers, Sheppard & Co., were not parties to the said! trust mortgage, and were not mentioned as creditors therein, although the defendants knew that they held and owned the notes.. They did not take or accept any conveyance of any property covered by the said trust mortgage in payment or satisfaction of their claims under the notes, and were not parties to any understanding or agreement or compromise with defendants in relation to their claims under the note in question. They never executed any paper, nor delivered up the note in suit. Sheppard & Co. held and owned the original notes prior to 1894, free of any defense in law or equity, while subsequently the said trust mortgage was given (on June 1, 1894), and also the conveyance of the leasehold at corner Tenth street and Second avenue (on April 22, 1897). The note-in suit was dated March'1, 1897, and indorsed over by Kerby to Sheppard & Co. within a few days thereafter.

From the above, we.conclude that the direction of a verdict in favor of plaintiff was right, and that the request of defendants to go to the jury “on the question of bona fides of Sheppard & Co. and the plaintiff herein, and also as to the credibility of the witness Shep

Judgment affirmed, with costs. All concur.