Carson v. Porter

Decision Date10 May 1886
Citation22 Mo.App. 179
PartiesJ. W. CARSON, Appellant, v. J. W. PORTER, Respondent.
CourtMissouri Court of Appeals

APPEAL from Audrain Circuit Court, HON. ELIJAH ROBINSON, Judge.

Reversed and remanded.

Statement of case by the court.

This is a suit upon a negotiable promissory note, executed by defendant to Geo. H. Rice, attorney for Empire Machine Company, and by him, as said attorney, endorsed and transferred to the plaintiff.

The defendant, in his answer, alleged that he was induced to execute the note in suit by certain false and fraudulent representations made by said Rice; and that said note was procured by said Rice wholly by certain alleged frauds and without consideration; and that plaintiff, when the note was assigned to him, had knowledge thereof, and conspired with said Rice to cheat and defraud the defendant.

The plaintiff introduced the note in evidence and rested. The defendant introduced evidence tending to show the fraud, and false and fraudulent representations alleged in the answer, and that the note was procured thereby and was without consideration. To this evidence the plaintiff unsuccessfully objected as being irrelevant and incompetent, because there was no foundation laid therefor, and because the defendant should have been required to show that plaintiff had actual notice or knowledge of the specific facts which rendered the note invalid before said evidence was admitted. No testimony was given tending to show any knowledge on the part of plaintiff of any of the alleged frauds, or false and fraudulent representations. At the close of the defendant's evidence, the court refused to give an instruction, in the nature of a demurrer to the evidence, asked by plaintiff. The plaintiff, then, for himself in rebuttal, testified, in effect, that he purchased the note bona fide, for a valuable consideration and before maturity, without any notice or knowledge whatever of the consideration for or the circumstances under which it was given.

The court refused to give for plaintiff the following instruction:

“That before a verdict in this case can be rendered for the defendant, the jury must believe from the evidence in the case that plaintiff bought the said note with bad faith and fraudulently, if they shall further believe that he bought the same before due and for a valuable and fair consideration.”

Against plaintiff's objection the court gave for the defendant the following instructions:

“1. The court instructs the jury that if they believe from the testimony in the case, that the note in question was procured by fraud, and that there was no consideration for the same, then it devolves upon the plaintiff, before he can recover, to show, by a preponderance of the testimony in the case, that he purchased said note in good faith, for a valuable consideration, and before the maturity thereof.”

“3. If the jury believe from the evidence in the cause that the note sued on was procured by fraud and false representations of the person procuring the same, as to the value and utility of the sickle grinder, and that said sickle grinders were worthless, then your verdict will be for the defendant, unless you further believe from the testimony that the defendant bought said note in good faith before due and for a valuable consideration.”

The jury found for the defendant, and the plaintiff has appealed to this court.

FORRIST & FRY, for the appellant.

I. Plaintiff's demurrer to the evidence should have been sustained. While it may be admitted defendant's evidence tended to show the note was procured by fraud and the consideration of no value, yet there was not an item of evidence showing, or from which it might have been inferred, that plaintiff had any knowledge of these facts. Corby v. Butler, 55 Mo. 400.

II. There was no foundation laid for defendant's evidence of fraud and want of consideration. Defendant should have been required to show that plaintiff had actual knowledge, or notice of the specific facts which rendered the note invalid, before this evidence was admitted. Johnson v. McMurry, 72 Mo. 278; Merrick v. Phillips, 58 Mo. 436; Corby v. Butler, 55 Mo. 400; Bennet v. Torlina, 56 Mo. 309.

III. The verdict was against the evidence. The jury were influenced by prejudice, or were mistaken as to the issues or evidence. This can only be remedied by this court, as it was the second trial below. Rev. Stat., sects. 3702, 3703, 3704, 3705.

IV. The court erred in refusing plaintiff's instructions prayed. Bellmon Bk. v. Hoge, 35 N. Y. 65; Goodman v. Simonds, 20 How. (U. S.) 343; Johnson v. Way, 27 Ohio St. 278.

V. The jury was misled by the court's third instruction; and so, also, by its first. General proof by plaintiff that he received the note before due, bona fide and for value, was made in this case. It then devolved upon defendant to show that plaintiff had actual notice of the specific facts which rendered the note invalid, to defeat recovery. This is required, because mere presentation of negotiable paper, indorsed in blank, or before maturity, imports, prima facie, that the holder acquired it bona fide, for value and before due. Daniel on Neg. Inst., sects. 812, 819. Those instructions did not so direct the jury. Johnson v. McMurry, 72 Mo. 282; Third Nat. Bk. v. Tinsley, 11 Mo. App. 498; Hamilton v. Marks, 63 Mo. 167; Davis v. Bartlett, 12 Ohio St. 541; Johnson v. Way, 27 Ohio St. 378.

EDWARD T. SMITH, for the respondent.

I. The case was fairly submitted to the jury, who had the witnesses before them; and it was proper for them to pass upon the good faith of plaintiff in purchasing the note. Johnson v. McMurry, 72 Mo. 278.

II. The error in third instruction, was not called to the attention of the trial court, and could not have misled the jury. It is obvious that the use of the word defendant for plaintiff was a clerical error.

III. No error can be assigned in the appellate court, which was not made the subject of exception in the court below. Swearingen v. Newman, 4 Mo. 456; Cook v. Davis, 4 Mo. 622.

PHILIPS, P. J.

The contention of respondent is, that this case is parallel with that of Johnson v. McMurry (72 Mo. 278), and that the court below pursued the law as declared in that case. It may be conceded that the evidence in the two cases is quite alike; but the course pointed out in Johnson v. McMurry, as the proper one to be pursued at the trial, was not, in my opinion, observed in this case.

Under the pleadings, the defendant assumed the burden of showing that the note in suit was fraudulently obtained by the payee and was without consideration. Conceding that this evidence was sufficient to go to the jury on the prima facie case made by defendant's proof, it then became, on the authority of the case, supra, “incumbent upon the holder to prove that he received it (the note) bona fide, before maturity and for value. He is not required, however, to prove that he had no knowledge of the specific facts which impeach its original validity. When the general proof is made by the holder that he received the paper before due, bona fide, and for value, it then devolves upon the maker to prove that the holder had actual notice of the specific facts which would render it originally invalid; otherwise the plaintiff must recover.”

The plaintiff did offer the requisite proof that he purchased the note in good faith, before maturity, and paid a valuable consideration therefor. But the defendant offered no such countervailing proof--nothing to balance the proof of the plaintiff, but left the case...

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