Bank of Ozark v. Tuttle

• Decision Date: 02 May 1910
• Citation: 144 Mo. App. 294,127 S.W. 918
• Parties: BANK OF OZARK v. TUTTLE.
• Court: Missouri Court of Appeals

127 S.W. 918

144 Mo. App. 294

BANK OF OZARK v. TUTTLE.

Springfield Court of Appeals. Missouri.

May 2, 1910.

1. BILLS AND NOTES (§ 520)—ACTIONS—EVIDENCE —FRAUD.

In an action by an assignee on notes, evidence held to show that the notes were procured by the original payees by fraudulent representations.

2. BILLS AND NOTES (§ 509)—ACTIONS—ADMISSION OF EVIDENCE—COMPETENCY.

In an action by the assignee on notes executed by the maker under the belief that they were a contract giving him the right to sell window locks in a certain territory, evidence as to a similar fraudulent scheme pursued by the original payee in another county after plaintiff had purchased the notes was incompetent, whether plaintiff had knowledge of the scheme pursued in the other county or not.

3. APPEAL AND ERROR (§ 1051)—HARMLESS ERROR—ADMISSION OF EVIDENCE — CUMULATIVE EVIDENCE.

In an action by the assignee on notes executed by the maker, believing them to be a contract giving him the right to sell window locks, error in admitting evidence as to a similar fraudulent scheme pursued by the payees in another county after plaintiff had purchased the notes sued on, offered to show that plaintiff had knowledge when purchasing of the circumstances under which the notes were procured, was not reversible where the other evidence amply justified a finding that plaintiff had sufficient notice to put it on inquiry as to the fraudulent scheme when it purchased.

4. BILLS AND NOTES (§ 315)—ASSIGNMENT OR SALE—NOTICE.

The maxim, "caveat emptor," applies to the purchaser of negotiable paper, as well as to the purchaser of other property.

5. BILLS AND NOTES (§ 525) — BONA FIDE PURCHASER—SUFFICIENCY OF EVIDENCE.

In an action by the assignee on notes, the execution of which was procured by fraudulent representation that they were a contract giving the maker the right to sell certain articles, evidence held to sustain a finding that the officers of plaintiff's bank had sufficient notice of the fraudulent nature of the scheme by which the notes were procured to put the bank on inquiry.

6. APPEAL AND ERROR (§ 1027)—HARMLESS ERROR—JUDGMENT CORRECT ON MERITS.

Where, upon consideration of the whole record, the judgment is clearly correct, it should be affirmed, regardless of errors at trial.

Appeal from Circuit Court, Christian County; John T. Moore, Judge.

Action by the Bank of Ozark against Ed. Tuttle. From a judgment for defendant, plaintiff appeals. Affirmed.

This was an action by the Bank of Ozark, appellant, as assignee without recourse of two promissory notes, each for $144. There was a judgment for defendant in the circuit court, and the plaintiff has appealed.

The facts out of which this action arose are substantially as follows: Some time in April, 1906, Mark Lowthorp and W. F. Payne arrived at the city of Ozark strangers, ostensibly for the purpose of selling a patent window sash lock. They traveled over the country, making themselves agreeable to the well to do farmers, staying for dinner and putting up window sash locks. They represented that their business was a profitable one, and that they were making from $4 to $10 a day from the sale of these locks. They exhibited rolls of money and a bank book showing large deposits in the Bank of Ozark, but in which during the three months he was there Lowthorp only deposited something less than $100. They placed locks on public buildings, mostly on trial, to be returned if called for, and most of which were never called for or returned. They represented that they intended to make Ozark a distributing center for their wares, and that they had already arranged with Adams and Taylor, the cashier and assistant cashier of the plaintiff bank, to take charge of their general office. They stated that in such business they would need a large number of managing agents to have charge of the salesmen, look after supplies, and so forth. By means of their industry quite an interest was aroused in the business by June 1st, at which time they brought on C. S. Lowthorp and one Fox to assist in gathering in their ripening harvest; Lowthorp having an interest as owner in the patent on the lock. In the meantime they had taken pains to have the plaintiff bank write to Hope, Ark., procuring letters concerning the character of C. S. Lowthorp. The plan on which the scheme was to be operated was that each of the persons selected as managing agent was required to buy a so-called "contract" for the price of $288. The price, however, was not made offensively prominent, and from some customers was altogether concealed. When a managing agent obtained a "contract," he was furnished with a book of 48 coupons of $6 each. Each of these coupons was good for an order for locks in any county in the United States. He was also given a power of attorney to appoint other managing agents on the same terms, and furnish them with similar "contracts" and power of attorney to appoint yet other managing agents, giving them the same power of attorney. Any one making a sale of a "contract" was to receive one-half the proceeds, and they had placed all the counties in the United States at the same price. They made a contract with the plaintiff bank for it to collect for such sales as might be made by their managing agents, and referred all persons to whom they wished to sell contracts to Adams and Taylor, and all persons who made inquiry of Adams and Taylor were informed by them that C. S. Lowthorp came highly recommended, saying to one victim—who had a stormy scene with Fox, and who was talking with Lowthorp in plaintiff bank—that they (Adams and Taylor) had wired to Arkansas, and, according to their knowledge, these men were all right. Several days before the plaintiff bank bought any of the notes, Adams and Taylor were shown the contract, power of attorney, and so forth, and represented that they had bought a "contract." It was shown that during June Taylor, while in and out of the bank every day, was not on duty, and that Adams had the entire management of the bank, merely reporting his action to the board at the end of each month.

From the time of beginning their work, Mark Lowthorp had been stopping at defendant's house, taking meals and leaving unsold locks there, showing silver loose in his buggy, telling him of their desire to appoint him as a managing agent to keep supplies, and so forth. On June 23d, Saturday evening, they all got the defendant into a room to "close up." He is an old man, had been subject to "dizzy spells" when hot, and, the evening being very warm, he states that he grew hot and dizzy. They stood between him and the door, some of them fanning him, and they asked him to sign what they represented and he believed to be a "receipt" of contract —two papers. His eyesight was bad, and he was unable to see without his glasses, which were at home. But they showed him where...