Spengler v. Drouet
Spengler v. Drouet
Opinion of the Court
This is an injunction suit to restrain the sale of an automobile under executory process on the ground that the debt had been paid.
J. O. Drouet, plaintiff in the injunction suit, defendant in the suit under executory process, purchased an automobile and as representing a portion of the price executed a promissory note secured by chat
For. some reason the attorneys did not mark the note paid and did not deliver it to Drouet, the maker and obligor. Mr. Staples, one of the attorneys, testified that he handled the transaction personally, that it was customary for his firm to mark notes paid when collected by his firm, and that there was probably some reason for his failing to mark this note paid, but he does not recall what that reason was.
On the same day, but subsequent to the payment of the note by Drouet to the attorneys, Spengler went to the office of the attorneys and prevailed on Staples to deliver the note to him. Spengler then took the note to the office of the W. H. Jones Company, Inc., and had it endorse the same over to him. This was, however, two days after the note had been paid to the attorneys.
Spengler, alleging that he was the holder and owner of said note in due- course, brought suit against Drouet, the maker of the note, and had the automobile seized; whereupon Drouet brought this injunction suit, asking that the proceedings be restrained on the ground that the note had been paid in full. There was judgment in favor of the plaintiff in the injunction suit, perpetuating the temporary restraining order which the court had previously-issued. The defendant, Spengler, has appealed.
OPINION
The sole question at issue is whether or not the note sued on had ’been paid. The lower court held that it had, and we think correctly so. As already stated, the note fell due while in the hands of the W. H. Jones Investment Company, Inc., which concern placed it in'the hands of its attorneys • for collection. Drouet borrowed the money with which to pay the note and carried the money to the office of the attorneys who held the note for collection and delivered it to them. The fact that he did not have the note. surrendered to him, we-
Counsel for Spengler, in brief, says that his client is the holder of the note in due course, having acquired the same from the W. H. Jones Investment Company, Inc. It is true that the W. H. Jones Investment Company, Inc., delivered the note to Spengler, having endorsed it to him without recourse. That, however, was done two days after the note had been paid by • Drouet to the attorneys and after the W. H. Jones Investment Company, Inc., had received remittance therefor. Spengler, therefore, is not a holder in due course.
A holder of an instrument in due course is one who took the instrument before it was overdue, in good faith and for value, and without knowledge of any infirmity in the instrument.
Section 52, Act 64 of 1904. (Negotiable Instruments Law.)
Spengler paid the W. H. Jones Investment Company, Inc., nothing for the note, and he knew when he took it that it was overdue and that Drouet had paid it. We quote as follows from counsel’s brief:
“Mr. Spengler was the bona fide holder of the note from the Wade H. Jones Investment Company, whose claim, although satisfied, transferred the note to Spengler, which was in accordance with the agreement between the said Spengler and Drouet.”
The W. H. Jones Investment Company, Inc., was the holder in due course of the note. The note was overdue and its claim had been satisfied, not by payment made to it by Spengler but by payment made by Drouet, the maker and obligor.
The payment of a negotiable instrument to the holder in due -course discharges the instrument.
Section 119 of the Negotiable Instruments Law provides that:
“A negotiable instrument is discharged by payment in due course by or on behalf of the principal debtor.”
Counsel for Spengler cites numerous authorities in support of his contention that the W. H. Jones Investment Company, Inc., be'ing the holder in due course of the note in question, had a right to transfer it. The authorities would be in point if the note had been in fact transferred before payment, but the facts are that the transfer made by the W. H. Jones Investment Company, Inc., to Spengler, such as it was, was made after the note had been paid in full. Spengler had full knowledge of all the facts before he took the note.
Having reached the conclusion that the note was paid, it is not necessary to discuss the other points raised by counsel for Spengler.
The judgment appealed from is affirmed.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.