Lincoln National Bank v. Miller

Citations

• 255 Pa. 467
• 100 A. 269
• 1917 Pa. LEXIS 476

Syllabus

<p>Negotiable instruments — Promissory notes — Discount — Endorsers — Endorsement in blank — Liability.</p> <p>1. Under Section 34 of tbe Negotiable Instruments Act of May 16, 1901, P. L. 194, tbe endorsement in blank of a promissory note renders it payable to bearer; tbe party in possession thereof may lawfully negotiate it by mere delivery and there is no obligation upon the part of the purchaser to require the endorsement of the party who is negotiating the instrument.</p> <p>2. Where the president of a bank is in possession of a promissory note made by a customer and endorsed in blank by the payee, the bank may lawfully discount the note and pay the proceeds to the individual account of the holder. In such case the presumptión is that the holder is the lawful owner: First Nat. Bank of Bloomsburg v. Gerli, 232 Pa. 465, distinguished.</p> <p>3. In an action on a promissory noté it appeared from the statement of claim and affidavit of defense that a note which had been endorsed by the defendant had been given to the president of a bank by the maker, with the understanding that neither the maker nor the endorser would be liable thereon until the maker should notify the bank president that he desired to purchase with the proceeds, certain stock of the bank; that the president of the bank, in violation of the agreement, discounted the note at the bank, without endorsing it, and caused the proceeds to be credited to his individual account, having transferred the stock to the maker of the note; that the note in suit was given in renewal of such note, and after the violation of the agreement under which the original note was given; there was no allegation that defendant did not know of the discount of the original note at the time the note in suit was given. It further appeared that plaintiff was a holder in due course of the note in suit, field, the court properly entered judgment for plaintiff for want of a sufficient affidavit of defense.</p>