Any person, firm, company, or corporation who may purchase any note, contract, or other evidence of debt given for any of the articles or things set forth in Code Section 10-3-3 when the consideration of said note is expressed on the face thereof as is provided in said Code section, whether before due and without notice or otherwise, where the consideration is so expressed, shall take the same with all the equities existing between the original parties; and the maker of such note, contract, or other evidence of debt shall have the right to make any defense to the payment of same as against such purchasers that could have been made against the original payee.
(Ga. L. 1897, p. 81, § 2; Civil Code 1910, § 4294; Code 1933, § 14-1805.)
Law reviews.- For article, "Copyright = Speech," see 65 Emory L.J. 199 (2015).
JUDICIAL DECISIONS
Innocent purchaser protected unless consideration stated.
- This section clearly contemplates that an innocent purchaser of a negotiable instrument before due and without notice will be protected, except if the consideration is stated on the face of the instrument. Ferguson v. Bank of Dawson, 50 Ga. App. 604, 179 S.E. 236 (1935) (construing former Ga. L. 1912, p. 153, as to sales of corporate stock).
Protection extends to defense of want of consideration.
- If a note does not express upon the note's face the note's consideration, the principle that a bona fide holder of a negotiable promissory note, purchased for value and before maturity, is protected against a defense that the note was without consideration is applicable. Ferguson v. Bank of Dawson, 50 Ga. App. 604, 179 S.E. 236 (1935) (construing former Ga. L. 1912, p. 153, as to sales of corporate stock).
Presumption that holder took before maturity, for value, and without notice.
- If a note does not express upon the note's face the note's consideration, the principle that when a negotiable note payable at a future date was endorsed by the payee to the plaintiff, in the absence of proof to the contrary the law will presume that the plaintiff took before maturity, for value, and without notice, is applicable. Ferguson v. Bank of Dawson, 50 Ga. App. 604, 179 S.E. 236 (1935) (construing former Ga. L. 1912, p. 153, as to sales of corporate stock).
Actual notice of consideration to director of bank.
- Actual notice to a director of a bank, who is also on the loan committee of the bank, as to the consideration for a note about to be discounted by the bank, is sufficient notice to the bank of that fact, so as to let in all defenses against it that existed between the original parties. Ferguson v. Bank of Dawson, 50 Ga. App. 604, 179 S.E. 236 (1935) (construing former Ga. L. 1912, p. 153, as to sales of corporate stock).
RESEARCH REFERENCES
Am. Jur. 2d.
- 11 Am. Jur. 2d, Bills and Notes, § 209.
C.J.S.- 10 C.J.S., Bills and Notes; Letters of Credit, §§ 15, 127.
ALR.
- Right to inventions as between employer and employee, 32 A.L.R. 1037; 44 A.L.R. 593; 85 A.L.R. 1512; 153 A.L.R. 983; 61 A.L.R.2d 356.