Bank of Bernie v. Blades

• Decision Date: 29 January 1923
• Docket Number: No. 3237.,3237.
• Citation: 247 S.W. 806
• Parties: BANK OF BERNIE v. BLADES et al.
• Court: Missouri Court of Appeals

247 S.W. 806

BANK OF BERNIE v. BLADES et al.

No. 3237.

Springfield Court of Appeals. Missouri.

January 29, 1923.

Appeal from Circuit Court, Stoddard County; W. S. C. Walker, Judge.

Suit by the Bank of Bernie against Ray Blades and another. From judgment for plaintiff, defendants appeal. Reversed and remanded.

E. Lentz, of Poplar Bluff, and W. E. Edmonds, of Bernie, for appellants.

J. L. Fort, of Dexter, for respondent.

FARRINGTON, J.

The plaintiff, a banking corporation, brought suit on a note for $3,000 executed by defendants, payable to the order of the Oil Finance Corporation, indorsed as follows: "Oil Finance Corp. Without Recourse." "By H. C. Staggs." It is through this indorsement that plaintiff claims to own the note. The petition alleges that the plaintiff purchased the note in good faith, for a valuable consideration, $2,850, before it was due, and without any notice of infirmity therein.

The answer alleges that the note was given on the solicitation of Staggs and Turner, two men representing themselves as being agents of the Oil Finance Corporation; that defendants were to receive from the Oil Finance Corporation $3,000 worth of stock in the Lackawana Oil Company, of Oklahoma City. It is alleged that the Oil Finance Corporation was an Oklahoma corporation, and had not procured a license to transact business in Missouri. It is admitted by the cashier, Fonville, that after he had purchased this note for the bank Staggs and Turner made him a present of $70. He denies, however, knowing anything about what the note was given for or the character of the transaction out of which it grew until after the note was purchased and the $70 present handed him. The note was made on one of the bank's notes.

It is alleged in the answer that no stock was ever issued to defendants nor received by them; that Staggs and Turner procured the note by fraud, and that plaintiff had knowledge of such fraud through its managing officer when the note was purchased. There was evidence tending to establish the allegations of the answer. After the evidence was in the trial court directed a verdict for plaintiff, and judgment for the full amount of the note, together with interest, was rendered.

The first point made by appellants is that the court erred in directing a verdict for plaintiff, because plaintiff had failed in a material and necessary matter of proof. We must uphold this contention, because the law is well settled in this state, and in many jurisdictions that, where an indorsee of a note alleges ownership of same, and it is denied, the genuineness of the indorsement on the note must be proven; that is to say, where an issue is raised as to the genuineness of an indorsement by a denial thereof, it is necessary for a plaintiff suing on a note indorsed to him to prove the validity of the indorsement through which such plaintiff claims ownership and title to the note. See Wade v. Boone, 184 Mo. App. 88, 168 S. W. 360; Nance v. Hayward, 183 Mo. App. 217, 170 S. W. 429; Scotland County National Bank v. Hohn, 146 Mo. App. 699, 125 S. W. 539; Federal Discount Co. v. Becker, 138 Mo. App. 54, 119 S. W. 981. See, also, notes 11 A. L. R. 954, where a great many authorities on this question from different states are collated, including a number of Missouri cases. Under these authorities, there being no evidence that Staggs had authority to make the indorsement, we must reverse this judgment.

It is practically admitted that no consideration whatever was received for this note, and from the transactions which went on between the cashier of the bank and the representatives of the Oil Finance Corporation a jury could readily infer...