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by proof that is clear and satisfactory upon, (Thomp). Shan. Code, $ 3510a18), which is every point essential to title by gift.

as follows: Appeal from Chancery Court, Greene “Where the holder of an instrument payable County; Hugh G. Kyle, Chancellor.

to his order transfers it for value without inSuit by Edgar R. Allen and others against such title' as the transferer had therein, and

dorsing it, the transfer vests in the transferee G. S. Hays and others. From the decree, the transferee acquires, in addition, the right certain of the parties appeal. Aflirmed.

to have the indorsement of the transferer. But,

for the purpose of determining whether the Epps & Young, of Jonesboro, and W. H. transferee is a holder in due course, the negoPiper, of Greeneville, for Allen and others. tiation takes effect as of the time when the Shoun & Trim and Susong & Biddle, all of indorsement is actually made.” Greeneville, for Hays and others.

But this section clearly contemplates the

making of proof of a transfer. Swanby v. WILLIAMS, J. This is a controversy in Northern State Bank, 150 Wis. 572, 157 volving the distribution of the estate of Dr. N. W. 763; Kiefer v. Tolbert, 128 Minn. 519, M. F. Jeralds, a leading physician of Greene 151 N. W. 529; Crawford, Neg. Ins. Law county, who died in January, 1913. There

(4th Ed.) $ 49, p. 91. were two executors of his estate. One of

Further, such transfer must be one for these, Allen, filed the bill of complaint value; and it is not claimed that value sur against the other, Dr. G. S. Hays, and other ported the claimed gift of the notes in ques

tion. defendants, for the purpose, among others of calling Hays to account for the amount

The above-quoted section does not have of certain notes executed by one C. A. John- any bearing upon the matter of presumption. son to Jeralds and secured by a mortgage on We need not determine whether, under the real estate.

rule of construction expressio unius, section The defendant executor defends on the 16 of the act (Thom. Shan. Code, g 3516a 15), ground that, though he had collected the notes, which does deal with the matter of prethat fact preceded the death of Jeralds, and sumptions, shows that no such presumption that the latter had long prior to the date obtains, in this phrase: of collection given the notes to him, G. S. session of a party whose signature appears

"When the instrument is no longer in the posHays, to be held as a gift to Gerald Ilays, thereon, a valid and intentional delivery by him the son of Hays, who married a daughter of is presumed until the contrary is proved.” testator.

Pretermitting that question, is there such The money, along with other funds belong. a presumption at common law against the ing to Hays personally, was lent by Hays payee? to one Shanks; the sum in solido being rep- In Roy v. Duff, 170 Iowa, 319, 152 N. W. resented in a note payable to Hays himself, 606, which arose after the passage of the without any definition in the note or in the Uniform Act in that state, it was said remortgage securing it of any trust, as to any specting the presumption existing against portion of it in favor of the boy, Gerald. the payee of such a note:

The complainant executor's theory is that “This title is presumed to continue until it the fund collected by Hays came into the is shown to have been divested, and we take it hands of the latter as a personal representa- to be the rule that the mere possession of such

paper, without indorsement, where there is no tive of Jeralds and should be accounted for evidence of a consideration paid, and no eviaccordingly.

dence of delivery except possession, is an inThis opinion concerns the question wheth- sufficient showing of the passing of 'title to the er or not a parol gift of the Johnson mort- negotiable promissory note or any negotiable

The mere possession of a gage notes by the grandfather to defendant instrument, the title to which passes under the Gerald Hays is established.

law merchant by indorsement and delivery, is The proposition advanced by counsel of not prima facie evidence of ownership as against

the payee. The absence of the indicia of ownHays and Gerald Hays is that the possession ership is wanting, and mere possession does of the notes raises a presumption of title, not supply this.” and that proof of possession along with In an earlier case, Tuttle v. Becker, 47 testimony showing that Hays asserted at Iowa, 486, it was said that, if possession is various times that the possession held by prima facie evidence of ownership, then the him was for his son, in explanation thereof, thief or wrongdoer would have the owner made a sufficient case, at least prima facie, at a serious disadvantage. to entitle the possession to be maintained un- Gano v. McCarthy, 79 Ky. 409, was a contil the contrary is established.

test between one claiming a note under vol[1] It becomes material, therefore, to in- untary gift alleged to have been made by the quire whether, since the notes which were deceased payee and the latter's adminispayable to order, but not indorsed by Jeralds, trator, There was no indorsement of the the payee, such a presumption of owner note, but it was in the claimant's possession. ship arises from possession.

The court said: The defendant seeks to buttress the claim “The mere fact of possession upon such a to a presumption of title, arising from pos- state of facts, was not prima facie evidence of session of the notes, by referring to section of the note, or a verbal sale of it, by the in

ownership. There might have been such a gift 49 of the Negotiable Instrument Law | testate to his niece, as to prevent a recovery

by his personal representative, is not doubted ; , being a part of the costs of defense, and the but such a defense must be sustained by the expression “at its own expense” meaning pracproof, and the law will not presume the exist- tically the same as "at the cost” of the insurer. ence of such facts from the mere possession of 2. INSURANCE Cw513–LIABILITY INSURANCE the note by the claimant as will deprive the -EXTENT OF LIABILITY—“MONEYS EXPENDowner of title. The presumption is that the

ED IN DEFENSE." title and right of possession is with the original

Under such policy, where an appeal was owner, and the burden is on the claimant to taken from a judgment recovered against insurshow that his possession is rightful.

ed on the claim for personal injuries, the insurIt would be an easy matter to deprive the own- er was liable for the interest accruing on the er of his property, if in such a case he were re- portion of the judgment for which it was liable; quired not only to make his action good by such interest coming within the term “moneys showing title in himself, but must, in some other expended in said defense,” which by the policy manner than the exhibition of his title, negative were to be excluded from the limitation of liathe idea that the possession of the defendant bility. is wrongful." See, also, Robertson v. Dunn, 87 N. C. 191;

Appeal from Chancery Court, Hamilton Vastine v. Wilding, 45 Mo. 89, 100 Am. Dec. County; W. B. Garvin, Chancellor, 347; Bausman v. Kelley, 38 Minn. 197, 36

Suit by the Southwestern Surety Company

From N. W. 333, 8 Am. St. Rep. 661.

against the Casey-Hedges Company. [2] The case in hand is yet stronger a decree for complainant, defendant appeals. against the presumption. The notes' pro

Affirmed. ceeds were found at the death of Jeralds in Sizer, Chambliss & Chambliss, of Chattathe hands of Hays as one of his executors, nooga, for Casey-Hedges Co. Martin & Trimwe think must be the legal effect of the ble, of Chattanooga, for Southwestern Suretransactions, nothing else appearing. The ty Co. presumption in such case is that the notes, unindorsed when collected, were yet the GREEN, J. This suit was brought to reproperty of the payee. See note, 50 L. R. A. cover a balance alleged to be due complain(N. S.) 588.

ant on an employer's liability policy. There Where, therefore, as here, the claim of the was a decree for the complainant below, alleged donee, the child of the defendant exec- from which defendant has appealed. utor, may arise out of the fact that his

The complainant is a manufacturer in father had opportunities as personal repre- Chattanooga, and in 1912 obtained a liabilsentative to come into possession of the notes ity policy from the defendant covering acciand their proceeds not only is the burden of dents to complainant's employés, which polproof on the claimant but he must overcome icy will be more particularly referred to that presumption by proof clear and satisfac- later. tory upon every point essential to title by One J. R. Oliphant, an employé of the gift. Reading Trust Co. v. Thompson, 254 complainant, sustained certain injuries in the Pa. 333, 9S Atl. 953.

course of his work alleged to have been due Without meaning to impute wrong to the de- to complainant's negligence, and brought suit fendant executor, or to intimate that the rec- for $25,000 damages in the District Court of ord indicates any degree of unfaithfulness to the United States. Notice of this suit was bis trust, we hold, as did the chancellor, that given to defendant surety company, and the the competent proof fails to show that the defense thereof was conducted jointly by the notes passed as a gift inter vivos to Gerald complainant and the surety company. There Hays.

was a judgment in the District Court for The chancellor's decree on this and the $6,000. A writ of error was sued out in the other matters in contest being correct, it is name of the complainant, and the case caraffirmed. Costs of the appeal will be paid ried to the Circuit Court of Appeals, where one-third by defendants and two-thirds by the judgment of the trial court was affirmcomplainant.

ed. 228 Fed. 636, 143 C. C. A. 158.

An effort was made to obtain a review of

the case on certiorari, which was denied by CASEY-HEDGES CO. v. SOUTHWESTERN the Supreme Court of the United States. SURETY CO.

Meanwhile an execution issued and was lev(Supreme Court of Tennessee. Feb. 11, 1918.) ied on property of the complainant to sat1. INSUBANCE 513—LIABILITY INSURANCE isfy the judgment in favor of Oliphant and - EXTENT OF INSURER'S LIABILITY “At his costs and interest on said judgment pendITS OWN EXPENSE."

Under a policy insuring against loss from ing the disposition of the writ of error by claims for personal injuries, limiting the insur- the Circuit Court of Appeals. This execuer's liability on account of one accident to $5,- tion was paid off by the complainant. 000, and reserving to the insurer the right to assume the management and defense of suits

The surety company paid to the Caseyfor such injuries, and providing that when it Hedges Company the sum of $5,000, but deassumed such defense it would defend at its nied liability for any part of Oliphant's costs own expense, the moneys expended in such de- recovered, and for any part of the interest fense not to be included in the limit of liability which had accrued on the judgment of the previously fixed, the insurer was liable for taxable costs in addition to the $5,000; such costs District Court.

For other cases see sawe topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

This bill was filed to recover the amount , dertaking therefore on the part of a liability of Oliphant's costs and interest on $5,000 of company to defend a suit at its own cost or the judgment.

at its own expense binds such company for The policy issued by the defendant sure the payment of court costs, even though such ty company insured the complainant here- costs exceed the maximum liability of the in against

company for damages on account of an acci"loss and expense arising from claims upon the dent. Such costs are part of the cost of deassured for damages on account of bodily inju- fense. ries accidentally suffered or alleged to have been suffered during the period of this policy by any

[2] This proposition is not very seriously employé of the assured by reason of the prose-controverted by the defendant in this case. cution of the work described herein."

The principal controversy is with reference Another provision of the policy is as fol- to the defendant's liability for any part of lows:

the interest which accrued on the judgment "The company's liability on account of an of the District Court. accident to one person is limited to $5,000.” It may be conceded that the greater num

There is a provision with respect to notice ber of adjudicated cases construing policies of accidents, and then appear these clauses: such as the one under consideration hold

“If a claim is made on account of an accident, that interest on a judgment accruing during the assured shall give like notice thereof; and the time that an appeal therefrom is pending the company at its own expense will settle or is not a part of the costs and expenses of the contest the same."

"If a suit is brought on account of an acci- litigation in such a sense that it may be aldent, the assured shall forward immediately to lowed in excess of the stipulated indemnity. the company or to its duly authorized agent Davison v. Maryland Cas. Co., 197 Mass. 167, every process and paper served on him. company at its own expense will settle or de 83 N. E. 407; Munro v. Maryland Cas. Co., fend said suit, whether groundless or not; the supra; National, etc., Worsted Mills v. Frankmoneys expended in said defense shall not be in- fort, etc., Ins. Co., supra; Coast Lumber Co. cluded in the limitation of the liability fixed v. Ætna Life Ins. Co., 22 Idaho, 264, 125 under this policy. The assured shall not as- Pac. 185, and other cases collected in notes sume any liability nor interfere with any negotiations for settlement of any legal proceeding, Ann. Cas. 1914D, 1067, and 43 L. R. A. (N. S.) nor incur any expense, nor settle any claim ex- | 1128. cept at his own cost without written consent

The question is undecided in this state, of the company."

and with due deference we think that the The contention of the defendant is that view announced in the cases just cited is too the extent of its liability, according to the narrow, and we are not inclined to follow terms of this policy, is $5,000, which sum it these authorities. has paid, and that it cannot be held for any Under the stipulations of the policy the thing else except “moneys expended in said insured has no control of the course of the defense." It is insisted that the costs and litigation after the liability company underinterest herein sued for are not included in takes the defense. Any interference on the the phrase, “moneys expended in said de- part of the assured may forfeit his rights fense,” and are not a part of the expense of under the policy. He has no voice whatever defending the suit.

in determining the propriety of an appeal. [1] Most of the liability policies which It would seem, therefore, that interest achave come under our notice provide for the cruing during an appeal on so much of a defense of suits against the assured “at the judgment as the insurer was liable for should cost” of the liability company. In this pol- be borne by the insurer. To that extent the icy the insurer reserves the right to defend appeal is prosecuted for the benefit of the such suits "at its own expense.”

insurer. There is some effort on the part of counsel It is said, however, that the whole matter to distinguish between the meaning of these rests in the domain of contract, and that it is two phrases. We are not able to take such competent for the parties to agree that the distinction. The phrases are practically liability of the insurer shall be so much and equivalent.

This is undoubtedly true, and the It has been held in a few cases that this question should be determined on the conundertaking to defend at its own cost did tract made between the parties. not bind the insurer for the taxable costs In the contract before us the insurance of the case, but that the language referred company undertook to respond to the extent merely to such costs as attorney's fees, ste of $5,000 for damages sustained by the asnographer's charges, and the like. National sured on account of bodily injuries suffered Provident Worsted Mills v. Frankfort, etc., by the insured's employé. The insurer also Ins. Co., 28 R. I. 126, 66 Atl. 58; Munro v. reserved the right to assume the manageMaryland Cas. Co., 48 Misc. Rep. 183, 96 N. ment and defense of any suits brought to Y. Supp. 705.

recover such damages against the insured, We think the weight of authority is now and, when it assumed the defense, undertook to the contrary. See cases collected in note to defend at its own expense—the moneys to Ætna L. Ins. Co. v. Bowling Green Gas- expended in such defense not to be included light Co., 150 Ky. 732, 150 S. W. 994, as re in the limit of liability previously fixed. ported in 43 L. R. A. (N. S.) 1128. An un The insurer not only agreed to reimburse

no more.

the insured to the extent of $5,000 for loss (peal has nothing to do with who shall pay this sustained for damage claims, but also stipu- interest, but if it did, the parties would be on lated that it would conduct any suit, the de- an equal footing, because the insurance com

pany also had the use of the $5,000 during the fense of which it undertook, at its own ex-appeal. It is simply a question of which one pense.

should bear this item of expense, and we think The expense of the latter undertaking, the insurance company should.” therefore, is expressly excluded from the In the case before us the writ of error limitation of liability for damages on account seems to have been sued out with the consent of the accident.

of the insured. Both the insurer and insured Is the interest on that part of a judgment joined in the prosecution of this writ of erfor which the insurer is ultimately liable, ror in the Circuit Court of Appeals. The accruing during the prosecution of an appeal, judgment affirmed was for $6,000. The intaken at the instance of the insurer, a part surer was liable for $5,000, or five-sixths of of the expense of the litigation or of the this judgment. The insurer is here seeking defense?

a recovery of five-sixths of the interest acWe think it is. The interest on a judg- crued and paid by it. ment during such period is fixed by law. The chancellor pronounced a decree in faIt applies to every case and is taxed on ev- vor of the complainant for the costs and fiveery judgment which is not reversed in the sixths of the accrued interest paid by it, and appellate courts. It is incident to every this decree will be affirmed. appeal and part of the expense of every unsuccessful appeal. The prosecution of an appeal or a writ of error is a part of the

STATE ex rel. JONES et al. v. HOWARD. defense, and expense so incurred is an expense of the defense. We can see no rea- (Supreme Court of Tennessee. Feb. 11, 1918.) son for excluding such an item from the ob- 1. CERTIORARI On 0 Moot CASE Costs ligation of the policy to reimburse the as- - MERITS. sured for “moneys expended in said de-bility of officer to hold office, the Supreme Court

On certiorari bringing up question of eligifense."

will consider the case, though term of office has Such interest is commonly taken into con- expired where matter of costs remains to be adsideration by counsel along with costs in ad- judicated and this depends on the merits. vising about the propriety of appellate pro

2. JUDGES Ont-COUNTY COURT-CHAIRMAN

-QUALIFICATIONS. ceedings, and is reckoned as a possible ex

Under Const. art. 6, § 1, vesting the judipense of litigation.

cial power of the state in the Supreme Court This is the result reached by the Kentucky and other courts, and “in justices of the peace,' Court of Appeals in Ætna Life Ins. Co. v. Thomp. Shan. Code, $ 221, providing that 'a

court to be called the county court is establishBowling Green Gaslight Co., supra. Such ed in each county, composed of the magistrates, also appears to be the opinion of the Circuit section 5992, providing that the county court Court of Appeals for the Sixth Circuit in consists of the justices of the county, and socNew Amsterdam Cas. Co. v. Cumberland poration, and the justices of the county court

tion 493, providing that every county is a corTelephone & Telegraph Co., 152 Fed. 961, 82 are the representatives of the county, no one C. C. A. 315, 12 L. R. A. (N. S.) 478. See, is eligible for the office of chairman of the counalso, the dissenting opinion in Saratoga Trap ty court who is not a justice of the peace of Rock Co. v. Standard Acc. Ins. Co., 143 App. 3. STATUTES Cw188—CONSTRUCTION.

the county. Div. 852, 128 N. Y. Supp. 822.

Courts have no right to give to statutes a Responding to one of the arguments ad- meaning not deducible from the unambiguous vanced by the courts disallowing a recovery

language used. of interest under such circumstances, the Certiorari to Court of Civil Appeals. Kentucky court said:

Quo warranto proceedings by the District "An attempt, however, is made to distinguish Attorney General in the name of the State, between the items of damage and cost and the on the relation of B. D. Jones and others, items of interest, and the argument is made that as the assured had the use of the $5,000 dur- against Joe J. Howard. The Court of Civil ing the appeal, and as this use was worth the Appeals reversed the decree of the Chancelinterest, therefore, this should not be accounted lor dismissing the bill, and defendant petian expense, as the assured did not lose any. tions for certiorari. Decree of Court of Civthing by paying the interest. But this argument overlooks the fact that the assured had to pay

il Appeals affirmed. to the claimant the interest it now demands, and unless it recovers it from the insurance

McCroskey & Peace, of Madisonville, for company, it will be out this item of expense

State rel. B. D. Jones and others. incurred by the litigation. If the insurance Lindsay, Young & Donaldson, of Knoxville, company had paid the $5,000 when the judg- and M. F. Valentine, of Madisonville, for ment was rendered in the lower court, at which Joe J. Howard. time the claimant first became entitled to interest, that would have ended its liability under the policy. But this it refused to do, and now, FENTRESS, J. This is a quo warranto unless it pays the interest that accrued on this proceeding, instituted by the District Attor$5,000 after that time and pending the appeal, the assured will lose it. The fact that the as: ney General, in the name of the state, upon sured had the use of the $5,000 pending the ap- I the relation of B. D. Jones and other citi

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

ex

zens and taxpayers of Monroe county, against This provision is taken from section 402 the defendant, Howard. The bill alleged of the Code of 1858. that Howard had been elected chairman of [3] Thus it is repeatedly declared that the the county court of that county for the year county court is composed of the justices, and 1915, and that he was not eligible for the that they are authorized to act for the counoffice because he was not a justice of the ty. The statutes do not mention other perpeace; and furthermore that he had been sons, and the courts have no right to give guilty of maladministration of its duties, to the statutes a meaning not deducible from and should also, on that account, be removed. | the unambiguous language used. So it is we

Defendant demurred to so much of the are of the opinion that no one except a bill as alleged that he was ineligible to fill justice of the county has the right to particithe office. The chancellor sustained the de- pate in any of the functions of that court. murrer, and upon the final hearing dismissed Of course, we are not to be understood as the bill, and the relators appealed to the holding that a county judge may not be lawCourt of Civil Appeals. That court revers- fully appointed by the Governor, or elected ed the decree of the chancellor, upon the by the people, under statutory authority, alground that defendant was not qualified to though such judge is not a justice of the hold the office, and entered a decree direct- peace. The contrary has been frequently ing that he be removed.

held. Redistricting Cases, 111 Tenn. pp. The defendant filed his petition here for 277–281, 80 S. W. 750, and authorities cited. certiorari, and insists that he was not dis We could rest the decision of this case qualified to hold the oflice because he was upon the above statutes; however, no one not a magistrate. The writ was granted has the authority to act as chairman of the pro forma by this court.

county court, except a justice of the peace, [1] While the term of office which the de- for the reason that by the Constitution (arfendant was filling has long since expired, ticle 6, 8.1) it is provided : nevertheless the matter of costs remains to

“The judicial power of this state shall be vestbe adjudicated, and this depends upon the ed in one Supreme Court, and in such circuit, merits of the case.

chancery and other inferior courts as the Leg[2] We are of the opinion that no one is tablish; in the judges thereof, and in justices

islature shall from time to time, ordain and eseligible for the office of chairman of the of the peace. The Legislature may also vest county court except a justice of the peace such jurisdiction in corporation courts as may

be deemed necessary. of the county.

Courts to be holden by

justices of the peace may also be established.” After the adoption of the Constitution of 1834 there was passed by the General Assem

It has been repeatedly held by this court bly "An act to reorganize the county courts that the chairman or judge of the county in this state.” Acts 1835–36, c. 6. Section court is a judicial officer. Ledgerwood v. 1 of this act provides :

Pitts, 122 Tenn. 606, 125 S. W. 1036; John“That hereafter there shall be established a

son v. Brice, 112 Tenn. 67, 83 S. W. 791; court in each and every county in this state, to be held by the justices of the peace thereof State v. Leonard, 86 Tenn. 485, 7 S. W. 453; * * to be called the county court."

State ex rel. v. Maloney, 92 Tenn. 62, 20 S. The substance of this section of the above ex rel. v. Glenn, 7 Heisk. 472. The law has

W. 419; State v. McKee, 8 Lea, 24; State act appears in Code 1858, § 127, as follows: imposed upon him the duties of the quorum

“A court is established in each county of this court. By Shannon's Code, 8 6006, it is prostate, composed of the magistrates for the despatch of probate and other business vided : intrusted to it, to be called the county court."

"The chairman of the county court shall atThomp. Shan. Code, $ 221.

tend at the courthouse of his county on the first By section 5992, Thomp. Shan. Code, it is Monday of every month, and shali exercise all

jurisdiction heretofore exercised by the quorum provided :

courts; and shall, on said first Mondays and “The county court consists of the justices of such subsequent days as may be necessary, atthe county. It is divided into a quarterly and tend to all matters and adjudicate and determine monthly court, the first being held by all or all questions and do all other acts and things such number of the justices necessary to trans- the quorum courts could do." act business, the latter by the chairman or judge of the county court. No discontinuance of pro

The powers of that court are defined by cess, or any matter or thing depending in said Thomp. Shan. Code, $ 6027 et seq., and are court, shall be produced by a failure to hold court at any regular session."

paraphrased in the opinion of this court in

Johnson v. Brice, 112 Tenn. 67, 83 S. W. 791. This provision of the Code is based upon

It will be observed that these duties are Acts 1794 (N. C.) c. 1, § 44; Acts 1835, c. 6, § 1; entirely of a judicial character, and it has Acts 1838, c. 135; Acts 1875, c. 70; also Code been so held by this court. Johnson v. 1858, 88 4179, 4180, 4186. It is also provided by Thomp. Shan. Code, v. State ex rel., 115 Tenn. 303, 89 S. W. 101,

Brice, 112 Tenn. 59, 83 S. W. 791; Murray § 493, as follows:

5 Ann. Cas. 687. “Every county is a corporation, and the justices in the county court assembled are the rep-stitution and under the statute law of the

Thus it is seen that both under the Conresentatives of the county, and authorized to act for it.”

state the defendant is not eligible for the

*

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