
    ALLIED BUILDING CREDITS, INC., v. MATHEWSON.
    1. Bills and Notes- — Indorsement Without Recourse — Evidence op Subterfuge.
    Evidence presented by defendants in action on promissory note bearing printed indorsement “without recourse” held, insuffieiént to show that relationship between payee and plaintiff indorsee was a subterfuge to avoid defenses against the payee.
    2. Same — Indorsement Without Recourse — Holder in Due Course.
    Whether or not plaintiff, promissory note indorsee without recourse, was a holder in due course without notice of defendant makers’ defense of failure of consideration held, for jury and evidence on such question was sufficient to support its verdiet for defendants.
    
      References for Points in Headnotes
    [1-3] 8 Am Jur, Bills and Notes § 383 et seq.
    
    
      3. Appeal and Error — Questions Reviewable — Holder in Due Course — Failure of Consideration — -Set-off—Recoupment.
    Question as to whether or not defendant makers in action by indorsee without recourse were entitled to judgment of no ■ cause of action upon a showing of failure of consideration and that plaintiff was not a holder in due course when it purchased the note, because defendants had not claimed any set-off or-recoupment is not determined, where the issue was not pleaded, nor presented to the trial court, nor raised as a reason or ground for appeal.
    Appeal from Oakland,- Hartrick (George B.), J.
    Submitted October 9, 1952.
    (Docket No. 29, Calendar No. 45,554.)
    Decided December 9, 1952.
    Action by Allied Building Credits, Inc., a Delaware corporation, against Robert C. Mathewson and wife on promissory note. Verdict and judgment for defendants. Plaintiff appeals.
    Affirmed.
    
      Robert D. Anspach, for plaintiff.
    
      William John Beer (John B. Osgood, of counsel), for defendants.
   Butzel, J.

Robert C. Mathewson and Pauline. Mathewson, his wife, defendants herein, gave an order dated May 25, 1950, to the Certified Home Improvement Company, herein referred to as the Certified Company, for certain specified lumber and building supplies for which they agreed to pay $1,165 by promissory note payable at the rate of $37.21 per month. The order was executed by the Smith-Orr Company, a dealer, who on June 1, 1950, billed the Certified Company for it, the invoice stating that the materials were to be delivered to Mr. Mathewson at Waterford, Michigan. Shortly thereafter and while Mr. Matbewson was away from borne, tbe lumber and supplies were brought to tbe Matbewson home. Mrs. Matbewson was asked to sign a receipt and sbe at first demurred on tbe ground that sbe knew nothing at all about tbe materials but sbe did sign when told that unless sbe did so tbe lumber would not be delivered and that if her husband found any fault, tbe company would come out and check it. Tbe record does not indicate with certainty, what sbe signed. Sbe produced a document marked “customer’s copy” of an invoice of materials to be delivéred to Robert Matbewson. It contains a list of tbe materials. At tbe bottom there is a line to be signed by tbe customer with tbe words, “received by” preceding tbe line. Mrs. Matbewson referred to what sbe signed as a completion certificate. Tbe witness for tbe Allied Building Credits, Inc., a Delaware corporation, plaintiff herein, also referred to a completion certificate which showed that tbe materials were delivered. Plaintiff did not introduce tbe “completion certificate” or a copy thereof as an exhibit, nor was any objection made to a reference to its contents at tbe trial of tbe case. There was no receipt for tbe materials nor a completion certificate signed by Mr. Matbewson. Mrs. Matbewson testified that sbe bad no authority to sign.

"When Mr. Matbewson arrived home tbe day tbe materials were delivered be made an immediate examination and according to bis testimony be found tbe lumber was short and that the material be bad ordered bad not been delivered. He immediately called up tbe Smith-Orr Company who told him to call up one Jackson at tbe Certified Company. Jackson in turn instructed Matbewson to call Allied ■Building Credits, ■ Inc., tbe plaintiff herein. Upon .calling up tbe latter’s office he was told that plaintiff ¡would have a man come over on tbe following day.

Matbewson and wife bad given a note dated June 6, 1950, to the Certified Company, the seller, for $1,-339.52, evidently interest and charges having been added to the original amount. The note had printed on the back “without recourse, pay to the order of Allied Building Credits, Inc.,” then a line for signature, below which were the words “dealer or contractor” and further down another line was the word “title.” The name, of the Certified Company was written in and after it “by Mildred Cogswell, bookkeeper.” No question was raised as to her authority although the inference might be drawn from the acceptance of an indorsement by a bookkeeper that plaintiff and Certified Company had a close relationship.

The dates of the various events and conversations are uncertain. Mathewson and wife had made no memoranda and differed as to dates in recalling the exact events that happened long before the trial. It is quite probable that the note was given before the lumber was delivered. Mathewson testified that a day or two after he called up plaintiff’s office it sent a man to Mathewson’s home. He examined the lumber and stated that he did not blame Mathewson for not paying. However, he did make some further payments but when he was told that he would have to look to the supplier of the lumber for redress he stopped payment. Notwithstanding Mathewson’s difficulty in remembering dates and the confusion as to exact dates, the so-called “completion certificate” apparently was signed the day the lumber was delivered and probably during the first week in June. Mathewson testified that he had notified plaintiff that the supplies were no good late on the same day that the lumber had been delivered. Payment to the Certified Company by plaintiff for the purchase of the note was not made until June 14, 1950, when, plaintiff’s witness testified, it had the completion certificate, showing the delivery of the materials, in its possession. Plaintiff introduced no testimony to •deny Mathewson’s statement that he promptly notified’ plaintiff of the failure to deliver what had been •ordered and that plaintiff sent one of its men to inspect the material and who told Mathewson that he was justified in his complaint.

Plaintiff claims to be a bona fide holder of a note in due course. Defendants deny this and insist that plaintiff was notified of the failure of consideration immediately and prior to the completion of the negotiation of the note by paying for it. ■ Defendants further plead coverture of Mrs. Mathewson who testified she had no authority to sign the completion certificate. Defendants further claim that Certified Company is so intertwined with plaintiff as to be a branch of it and the indorsement “without recourse” is simply a subterfuge so as to avoid defenses against the original payee. The printing on the back of the note is suggestive at the most but is in no way proof •of defendants’ claims as to the relationship between the 2 companies. Plaintiff testified that it furnishes such form notes to all of its customers. The statement accompanying plaintiff’s check to Certified Company shows that plaintiff purchased an additional note signed by a different customer of Certified Company at the same time. We decline without further proof to find the intimate relationship between the 2 .companies as claimed by defendants. We do, however, hold with the trial judge that there was sufficient proof of notice to the plaintiff so that it became a jury question whether plaintiff was a holder in due course without notice. Testimony indicates that the materials were delivered prior to the payment by plaintiff to Certified Company. Otherwise there could not have been the completion certificate. The judge further commented upon the fact that the completion certificate was not signed by Mr. Mathewson and that that . must have been noted by plaintiff before purchasing the note. Plaintiff introduced testimony to the effect that after it had a note signed by both husband and wife, it was satisfied with the signature of either one on the completion certificate and that it was its custom to require-a completion certificate before it purchased a note.

The case is a close one on the facts and is particularly clouded by the discrepancy in the testimony with regard to dates. We conclude, however, that there was sufficient testimony to take the case to the-jury, which found in defendants’ favor. There seems-to be very little difference between the parties as to the law; it became solely a question whether plaintiff was a holder in due course.

Plaintiff raises the question of whether defendants, in the absence of any claim of set-offs or recoupments and loss sustained by defendants herein by reason of the alleged delivery to them of improper lumber by the original payee named in the note,, are entitled to a judgment of no cause of action upon the showing that plaintiff is not' a holder in due-course. Testimony of defendants was that the supplier of the materials did not furnish the materials-ordered. They did not claim any set-off or recoupment. This question is raised for the first time on. appeal. It was not even raised as a reason or ground for appeal. An issue not pleaded nor otherwise presented to the trial court cannot be urged on appeal. Lintern v. Zentz, 327 Mich 595 (18 ALR2d 713).

Judgment affirmed, with costs to defendants.

Adams, C. J., and Dethmers, Carr, Bushnell,. Sharpe, Boyles, and Beid, JJ., concurred.  