On Petition for Rehearing. The appellee, Maury National Bank, has filed a petition asking this court to reconsider its opinion heretofore filed, set aside its decree heretofore rendered, rehear the case, and affirm the decree of the chancellor.
The case involves a controversy between the Universal Credit Company and the Maury National Bank — both of whom are petitioners in a general creditors' proceeding in the chancery court of Maury county — as to which of them has the prior and superior right and title to a fund of $970 in the hands of Mora B. Farris, *Page 384 receiver, which fund was realized from the sale by the receiver, under the orders of the court below, of five automobiles described in the record. The chancellor adjudged that the claims of the Bank to said fund were prior and superior to those of the Universal Credit Company to the extent of $852.40, and that the Credit Company was entitled to the remainder of said fund, viz., $117.60.
The Universal Credit Company appealed and assigned errors, and this court sustained certain of the assignments of error and, in part, reversed the decree of the learned chancellor and adjudged and decreed that the claims of the Universal Credit Company in and to the fund of $970, representing the proceeds of five automobiles in controversy, are prior and superior to those of the Maury National Bank, to the extent of $852.42, and that the Bank is entitled to the remainder of said fund, viz., $117.58 (representing its claim against the automobile known in the record as the Haywood car).
It is insisted for the petitioner that the Universal Credit Company "has absolutely no claim of any nature or kind" in and to the automobile known in the record as the "Hardison car," for the reason that on the back of the original conditional sale contract for said car the following appears:
"Assignment. September 10, 1931. For value received the undersigned hereby sells, assigns and transfers to Commerce Union Bank all the right, title and interest in and to the within contract and the property described therein.
"Universal Credit Company "By H.E.C. Williams "Asst. Treas."
This endorsement on the Hardison contract was observed by this court prior to our former opinion and decree, but, in the light of the stipulations and proof in the record, we did not then, and do not now, regard it as of any controlling importance. Counsel for the Bank did not call attention to it in their brief, and we likewise omitted any reference to it in our opinion.
It is stipulated in the record, with respect to the S.R. Hardison, Jr., contract (on which said endorsement appears) as follows:
"Its (it is) stipulated that on January 26, 1931, S.R. Hardison, Jr., bought of Fry Brothers, of Columbia, Tennessee, a New Ford Standard Coupe, Model A, Motor #3987525.
"Its further agreed that Fry Brothers transferred this contract to the Universal Credit Company immediately, for a valuable consideration.
"Its agreed that the Contract of S.R. Hardison, Jr., signed on January 26, 1931, is attached hereto, and may be considered as a part of this deposition as fully as if copied herein. *Page 385
"And its further agreed that this contract was transferred from Columbia, Tennessee, by or through the Maury National Bank, and that a draft accompanied said Contract, and that the Maury National Bank received the money on said draft, having permitted Fry Brothers to deposit said draft to the credit of it.
"And its further agreed that the envelope attached hereto, endorsed as follows: `Pay to the order of any bank or banker. All prior endorsements guaranteed. January 26, 1931. Maury National Bank. 87-85 Columbia, Tennessee, 87-85,' is the envelope and draft which accompanied said Contract."
The contract described in the above-quoted stipulation was produced by F.F. Crowley, branch manager of the Louisville branch of the Universal Credit Company, and was filed by him as an exhibit to his deposition, and he testified that "Universal Credit Company is the owner of this Conditional Sales Contract at this time."
This testimony of the witness Crowley is undisputed, and there is no suggestion in the record that the Commerce Union Bank, or any one other than the Universal Credit Company, is claiming to be the owner or holder of said Hardison contract.
Upon the foregoing stipulated and proven facts, and in the absence of any evidence of delivery to the Commerce Union Bank, the presumption is that the endorsement was placed on the contract in contemplation of a transfer that was never effectuated by delivery.
"A delivery of a bill or note is necessary to its transfer whether by endorsement or otherwise. So a note may be endorsed by the payee, yet if not delivered to some one as endorsee or holder, the title remains in the payee who still is its holder, and no contract whatever from such endorsement is created or implied." 3 R.C.L., p. 967, par. 175.
The remainder of the Bank's petition for a rehearing deals with matters concerning which our findings of fact and conclusions of law were fully set forth in our written opinion heretofore filed and to which, on reconsideration, we are constrained to adhere. A statement of our views would, therefore, be a mere repetition of our former opinion, which, of course, is unnecessary.
However, we would suggest that the petition indicates that its draftsman misconceived the holding of this court on at least one important point in the case. It is said in the petition that: "The Court will bear in mind that the undisputed proof is that the appellee, Maury National Bank, purchased the notes in question for value received in due course of trade before maturity without any knowledge of any character or kind as to any alleged former title contract."
The excerpt just quoted from the Bank's petition is in direct conflict with the holding in our former opinion, wherein we said: *Page 386
"We are of the opinion that, on this record, the Bank does not occupy the status of a holder of said notes in due course, and its rights with respect thereto are no greater than those of Fry Brothers prior to the time of the transfer of said note of $157.02 to the Bank.
"Where there is substantial evidence that the title of the original holder of a note was defective, a later holder has the burden of proving that he took the note in good faith and for value, and that at the time the note was negotiated to him he had no notice of any infirmity in the instrument or defect in the title of the person negotiating it. Code, sections 7376, 7382, 7383; Security Finance Co. v. Duncan, 5 Tenn. App. 631, 634.
"The Bank has not discharged the burden which thus rested upon it. Its witness, Leslie Clark, admitted that he had no personal knowledge of the acquisition of the note by the Bank, and that he did not make the original entries on the books about which he testified. He mentioned other officers of the Bank — Mr. Chaffin and Mr. Cochran — as having some connection with the transaction, but neither of these gentlemen testified, and their failure to do so is not explained.
"There is a presumption that competent and pertinent evidence within the knowledge and control of a party and which he withholds is against his interest and insistence. Standard Oil Co. v. State, 117 Tenn. 618, 672, 100 S.W. 705, 10 L.R.A. (N.S.), 1015; Fisher v. Insurance Co., 124 Tenn. 450, 483, 138 S.W. 316, Ann. Cas., 1912D, 1246; Western Union Telegraph Co. v. Lamb, 140 Tenn. 107, 111, 203 S.W. 752; Citizens Bank v. Langford, 6 Tenn. App. 238, 242.
"`Where it is apparent that a party has the power to produce evidence of a more explicit, direct and satisfactory character than that which he does introduce and relies on, it may be presumed that if the more satisfactory evidence had been given it would have been detrimental to him and would have laid open deficiencies in, and objections to, his case which the more obscure and uncertain evidence did not disclose.' 22 C.J., p. 115, section 55.
"Upon the foregoing facts, we find that the Bank is not a holder of the Hardison note in due course, and that the Bank stands on no higher ground with respect to said note than does its assignor, Fry Brothers; hence, the right and title of the Credit Co. in and to the Hardison car and the proceeds of the sale thereof are superior to those of the Bank, and the Credit Company's assignments of error directed to that part of the Chancellor's decree ruling otherwise, are sustained."
Similar rulings were made with reference to the notes for the other cars in controversy, except the Haywood car. *Page 387
The Bank's petition for a rehearing is overruled and denied.
The Universal Credit Company has filed a petition for a rehearing of the action of this court in overruling its twelfth assignment of error, which assignment challenged the chancellor's adjudication of certain costs against the Universal Credit Company.
The former opinion of this court was filed on July 22, 1935. The Bank's petition for a rehearing was filed on July 26, 1935, and thereafter counsel procured the transcript of the record and withheld it until November 8, 1935, when it was returned to the court and the Universal Credit Company's petition for a rehearing was filed on the latter date.
Rule 22 of the published rules of this court require that petitions for a rehearing and for other and additional findings of fact in any case must be filed within 10 days after the opinion of the court is filed. See Williams Annotated Code, vol. 7, p. 552. It is too obvious to need comment that a petition for a rehearing filed more than 3 months after the opinion was filed cannot be considered, and the said petition of the Universal Credit Company is also overruled and denied.
The costs incident to each of said petitions will be taxed to the respective petitioners.
Crownover and De Witt, JJ., concur.