Opinion
No. 40686.
June 9, 1958.
1. Bills and notes — maker's defense that final payment was filled in for an amount in excess of that authorized could not be interposed against a holder in due course.
In action by assignee of conditional sales contract and negotiable note to collect on note, maker's defense that when he signed conditional sales contract and note, and authorized payee to fill in final payment, contract and note specified monthly payments totalling less than balance due on contract and note as filled out, could not be interposed against assignee as an innocent purchaser for value in due course without notice and before maturity of conditional sales contract, and promissory note sued on. Secs. 42, 46, 55, 93, 96, 97, 100, 165, 166, Code 1942.
2. Bills and notes — evidence — assignee holder in due course — directed verdict for assignee warranted by evidence.
In such case, there was no substantial evidence offered by maker to successfully refute the proof of assignee that assignee was an innocent purchaser for value in due course, and without notice and before maturity of conditional sales contract, and note sued on, and Trial Court was warranted in granting a directed verdict in favor of assignee.
Headnotes as approved by McGehee, C.J.
APPEAL from the Circuit Court of Clay County; JOHN D. GREENE, JR., J.
A.M. Edwards, Jr., Lenora L. Prather, B.H. Loving, West Point, for appellant.
I. The appellee in this case was not a holder in due course and the instrument here involved was not negotiable. Mutual Finance Co. v. Martin (Fla.), 63 So.2d 649; Porter Hardware Co. v. Peacock, 129 Miss. 129, 91 So. 856; Davis v. Ross, 208 Miss. 441, 44 So.2d 534; Lore v. Smith, 161 Miss. 579, 133 So. 214; Moore v. Vaughn, 167 Miss. 758, 150 So. 372; Secs. 42, 46, 93, 96-97, 100, 165-66, Code 1942.
Thompson McClellan, West Point, for appellee.
I. The appellee in this case is a holder in due course, and the defense offered by the appellant herein is not permissible against the appellee. Misso v. National Bank of Commerce, Memphis, Tenn. 231, Miss. 249, 95 So.2d 124; Jones v. First Natl. Bank of West Point (Miss.), 155 So. 173; Universal Credit Co. v. Thomas, 170 Miss. 21, 154 So. 272; Universal Credit Co. v. Moore, 173 Miss. 740, 163 So. 194; Hattiesburg Production Credit Assn. v. McNair, 193 Miss. 615, 10 So.2d 97; Green, Supt. of Banks v. Martin (Ala.), 132 So. 882; Mutual Finance Co. v. Martin (Fla.), 63 So.2d 649; Secs. 42, 46, 55, 93, 100, 165, Code 1942; Anno. 100 A.L.R. 1357.
APPELLANT IN REPLY.
I. The instrument herein involved was not negotiable. Misso v. National Bank of Commerce, Memphis, Tenn., 231 Miss. 249, 95 So.2d 124; Mutual Finance Co. v. Martin (Fla.), 63 So.2d 694; Stevens v. Stanley, 153 Miss. 801, 809, 121 So. 814, 122 So. 755; Smith v. Ellis, 142 Miss. 444, 107 So. 668; Moore v. Vaughn, 167 Miss. 758, 150 So. 372; Secs. 42, 46, Code 1942; 7 Am. Jur., Bills and Notes, Secs. 62, 113 p. 850; Anno. 44 A.L.R. 2d, Sec. 17 p. 84.
II. Appellee was not a holder in due course. Mutual Finance Co. v. Martin, supra; Sec. 93, Code 1942; Annos. 44 A.L.R. 2d pp. 118, 127 (K).
III. The contract in this case was fraudulently altered. Universal Credit Co. v. Thomas, 170 Miss. 21, 154 So. 272; Universal Credit Co. v. Moore, 173 Miss. 740, 163 So. 194; Hattiesburg Production Credit Assn. v. McNair, 193 Miss. 615, 10 So.2d 97; Green v. Martin (Ala.), 132 So. 882; Sec. 165, Code 1942.
On February 26, 1955, the appellant Jack B. Garnett traded his automobile on which he owed a balance of $226.48 to the G.M.A.C., in exchange for a new Ford automobile sold to him by the Bob Arnold Motors, Inc., at Birmingham, Alabama. The appellant received a net credit of $800 for his car on the new Ford automobile, the cash price of which was $2,640. The dealer was to pay to the appellant $1,026.48 for his car by paying off the indebtedness of $226.48 owing by the buyer to the G.M.A.C. and allowing him the net credit of $800 for his old car on the price of the new Ford.
At the time the agreement for the exchange of the automobile was made, late in the afternoon of February 26, 1955, the clerical help at the office of Bob Arnold Motors, Inc., had gone from the office and the appellant Jack B. Garnett signed a conditional sales contract, and also a promissory note, both payable to the order of Bob Arnold Motors, Inc. The appellant testified that at the time he signed the instruments the conditional sales contract specified "17 monthly installments of $65.00 and a final installment of ____ Dollars, beginning on 3-26-55"; that he placed his initials JBG immediately over the figure 17 and immediately over the figure $65.00 and which figures and initials were made with pen and ink. Obviously, the 17 payments at $65.00 each would aggregate only $1,105 as the difference between his credit of $800 and the total cash purchase price of the new automobile, and the appellant admittedly authorized the representative of the Bob Arnold Motors, Inc., and his own agent, to fill in the blanks in the conditional sales contract and in the note on the following morning after the two automobiles had been exchanged between the dealer and the buyer.
The proof on behalf of the dealer, disclosed that the final payment of $1,193.41, which was necessary to make out the deferred balance of $2,298.41, and which figure is also in pen and ink, was in the conditional sales contract at the time the same was signed by the appellant, although it is filled in on a line immediately below the line where the words "and a final payment of ____ Dollars" appears. Whereas the appellant contends that the figure $1,193.41 was not in either the conditional sales contract or the note at the time he signed them and that he had only agreed to pay 17 installments of $65.00 per month as the difference between the value of the two automobiles involved in the trade or exchange.
At any rate the $800 credit, and the deferred balance of $2,298.41 and the total time price of $3,098.41, including carrying charges, interest and a premium for a life insurance policy on the life of the buyer were inserted in the proper blank places in the conditional sales contract and note on the morning of February 27, 1955, by the use of a typewriter, after the note had been signed by Jack B. Garnett the evening before. The note showed the amount of the deferred balance of $2,298.41, the 17 monthly installments of $65.00 and a final installment of $1,193.41, beginning on 3-26-55, the figures being identical in amount with those in the conditional sales contract, and both instruments were on the same page of the printed form therefor. The completion of the conditional sales contract, and the filling in of the blanks in the note, was done at the office of the Bob Arnold Motors, Inc., before this negotiable conditional sales contract and note were assigned to the Associates Discount Corporation for value, without notice of the defenses which the defendant Garnett interporsed upon the trial, and before maturity.
(Hn 1) We have carefully considered together in conference all of Sections 42, 46, 55, 93, 96, 97, 100, 165, and 166 of the Negotiable Instruments Act in the Code of 1942, together with the case of K.T. Misso v. National Bank of Commerce of Memphis, 231 Miss. 249, 95 So.2d 124; Jones v. First National Bank of West Point, 170 Miss. 857, 155 So. 173, and the other cases cited in the briefs, in connection with all of the evidence in the case, and we are of the opinion that the two cases above mentioned are controlling herein, and that the trial judge was warranted in granting the directed verdict in favor of the plaintiff, Associates Discount Corporation, the appellee here. (Hn 2) There was no substantial evidence offered by the appellant as defendant in the trial court to successfully refute the proof of the plaintiff Associates Discount Corporation, showing that the said corporation was a purchaser for value in due course, and without notice and before maturity of the conditional sales contract and promissory note sued on in this case. The judgment appealed from must therefore be affirmed.
Affirmed.
Hall, Lee, Holmes and Ethridge, JJ., concur.