Profert of a promissory note is required by statutes placing promissory notes on the same footing and of equal dignity with instruments under seal.
Beebe v. Real Estate Bank, 4 Ark. (1842)
See Vandergriff v. Vandergriff, 211 Ark. 848, 202 S.W.2d 967 (1947), where this court held there can be no judgment on a note when it is not introduced into evidence and where the note's absence is not
explained.
This court has also held that secondary evidence of the contents of a note is inadmissible when the original is within the control or custody of the one seeking to enforce it.
Chaviers v. Simmons, 256 Ark. 731, 510 S.W.2d 301 (1974).
Article 3 of the UCC, first enacted in 1961 and replaced in 1991, governs the treatment of negotiable instruments. Ark. Code Ann. 4-3-101--605 (Repl. 1991). Here, because their promissory note is a negotiable instrument as defined by 4-3-104(a), the McKays contend, and we agree, that Capital Resources was obligated to satisfy the UCC requirements for negotiable instruments. We turn to those UCC requirements applicable here. Under 4-3-310(b)(3), an obligee may enforce either the note or the debt.
John P. McCAY, Jr. and Rosemary L. McCay v. CAPITAL RESOURCES COMPANY, LTD.
However, when the note is transferred to a third party (as in the present case) the only right that survives is the right to enforce the note. 4-3-310(b)(4). Also important here is Code provision 4-3-301, which provides that a person may be able to enforce the note even though that person is not the owner of the instrument or is in wrongful possession of the note.
John P. McCAY, Jr. and Rosemary L. McCay v. CAPITAL RESOURCES COMPANY, LTD.
Capital Resources also urges that the trial court was correct in admitting the copy of the note as an exception under the best evidence rule. Ark. R. Evid. 1002 provides that the original is required to prove the contents of a document. However, under Rule 1003, a duplicate is admissible to the same extent as an original, unless a question of its authenticity is raised or it would be unfair to admit the duplicate in lieu of the original. Capital Resources contends the Rules of Evidence supersede the requirements of the UCC. But we find this argument without merit.
John P. McCAY, Jr. and Rosemary L. McCay v. CAPITAL RESOURCES COMPANY, LTD.
First, as previously discussed, we mention the unfairness in these circumstances that, if a duplicate was allowed in place of the original note, the McKays could later be subjected to double liability if the actual holder of the note appeared. Next, we add that the Rules of Evidence are rules of the court involving legal proceedings, while the UCC is composed of statutes of law that established the rights and liabilities of persons. Again, as previously discussed, Capital Resources, as an assignee of the McKays' note, could not sue on the underlying debt the McKays owed to Landmark Savings. For Capital Resources to have prevailed in enforcing the McKays' note, it was required either to produce the original or satisfy the requirements for a lost negotiable instrument under 4-3-309(a) and (b). Because Capital failed to do either, we must reverse and remand.
John P. McCAY, Jr. and Rosemary L. McCay v. CAPITAL RESOURCES COMPANY, LTD.
See the entire case:
http://courts.state.ar.us/opinions/1...324/96-200.txt
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