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09/03/56 James BRASWELL et ux. v. C. A. TINDALL
SUPREME COURT OF TENNESSEE

James BRASWELL et ux.
v.
C. A. TINDALL



[3]    294 S.W.2d 685, 200 Tenn. 629

[4]    September 3, 1956

[5]    Rehearing Denied October 5, 1956

        1956.TN.179 <http://www.versuslaw.com> [6]    APPELLATE judges:

[7]    TOMLINSON

[8]    DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE TOMLINSON

[9]    The same code section, Section 47-159, T.C.A., which provides that every holder of a negotiable instrument obtained before maturity is deemed prima facie to be a holder in due course further provides this:

'but when it is shown that the title of any person who has negotiated the instrument was defective, the burden is on the holder to prove that he or some person under whom he claims acquired the title as holder in due course.'

Tindall did not testify. Nor did he offer any evidence to prove that he acquired title as holder in due course.

The Chancellor, however, observed that in none of our cases 'has it been held that usury in a transaction occasioned a defect in title'; hence, that the prima facie presumption that Tindall was the holder in due course must apply with the result that Braswell's suit was dismissed. The Chancellor did express the opinion that 'usury should so affect the title', but thought that such result should be brought about by legislative enactment.

The Court of Appeals concluded from the evidence

'that Tindall was familiar with the whole scheme and plan, thus taking the notes in bad faith and with full knowledge that same was a pure money-raising usurious transaction.'

Accordingly, the Chancellor was reversed, judgment rendered for the amount of usurious interest already paid, and collection of the outstanding note of $ 700 was permanently enjoined. Tindall's petition for certiorari insists that there is no evidence to support this finding of the Court of Appeals.

This 'no evidence' insistence of Mr. Tindall makes necessary a determination first as to whether under our Negotiable Instrument Law the burden was upon Tindall to show that he was a holder in due course before maturity, rather than the burden being upon Braswell to show that he was not such a holder. If there was a defect in title, then Section 47-159, T.C.A., heretofore quoted expressly places this burden upon Tindall, since Braswell has clearly established the grossly usurious transaction.

That which is a defect in title within the meaning of the Negotiable Instrument Law is, as aforesaid, declared by Section ...


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