Beesley v. Wm. A. Nicholson Co.
| Decision Date | 28 April 1931 |
| Docket Number | Case Number: 19684 |
| Parties | BEESLEY v. WM. A. NICHOLSON CO., Inc., et al. |
| Court | Oklahoma Supreme Court |
¶0 1. Bills and Notes--Innocent Purchasers--Burden of Proof.
Where an action is brought upon a negotiable promissory note by one who claims as a purchaser in due course, for value, possession of the note by plaintiff is prima facie evidence that same had been acquired in good faith, for value in the usual course of business. But when the maker and other indorsers, who are sued, introduce evidence tending to show that the possession of such note had been obtained from the payee by some person by or through whom plaintiff claims, by fraud, duress, or force and fear, or other unlawful means, or for an illegal consideration, or has negotiated it in breach of faith, or under such circumstances as amount to fraud, then the burden is shifted to the plaintiff to show that he acquired the note in good faith, for value, in the usual course of business and before maturity.
2. Same--Refusal to Instruct Verdict for Plaintiff in Suit on Note Held not Error.
Even though the defendant offers no evidence on rebuttal to disclose that the plaintiff was not a bona fide holder of the note in due course, but where defendant has denied said fact, and the evidence introduced on the part of plaintiff to prove such fact was of such nature that men of ordinary intelligence might draw different conclusions therefrom, it is not error for the court to refuse to instruct a verdict for the plaintiff.
3. Same.
Record examined, and held, the court did not err in refusing to direct a verdict for plaintiff.
4. Same--Judgment--Plaintiff Held not Entitled to Judgment Notwithstanding Verdict.
A party is entitled to a judgment notwithstanding the verdict (1) where such party would be entitled to judgment on the pleadings; and (2) where there are special findings of fact contrary to the general verdict. Held, in this case, that there was an issue of fact presented by the pleadings requiring proof aliunde for determination, and there was no special finding of fact made in the case, hence the plaintiff was not entitled to a judgment notwithstanding the verdict.
Appeal from District Court, Garvin County; W. G. Long, Judge.
Action by J. M. Beesley against William A. Nicholson Company, Inc., and others upon a negotiable promissory note, and to foreclose a mortgage on real estate given to secure the same. Judgment for defendants, and plaintiff appeals. Affirmed.
Bowling & Farmer and S. A. Denyer, for plaintiff in error.
Mac Q. Williamson, Carroll J. Moody, and Yerker E. Taylor, for defendants in error.
¶1 This is an action upon a negotiable promissory note, and to foreclose a mortgage on real estate given to secure the same.
¶2 The plaintiff in error, plaintiff below, sues as a purchaser in due course for value before maturity. The note was for $ 3,000, and signed by Wm. A. Nicholson Company, with Lawrence W. Nicholson as payee. It was indorsed by William A. Nicholson, Allie E. Nicholson, and Lawrence W. Nicholson, with the further indorsement thereon signed by Lawrence W. Nicholson showing the interest paid to date of maturity, which was two years after date.
¶3 The defense of William A. Nicholson Company, W. A. Nicholson, and Allie E. Nicholson is a defect in the title of the person from whom plaintiff purchased the note, namely, E. W. Hardin Company, a corporation, or W. C. Beesley, a brother of the plaintiff; and a further defense of payment to Lawrence W. Nicholson before maturity and while the note was in his hands.
¶4 Lawrence W. Nicholson, by separate answer, pleaded, in substance, that he executed a note in the sum of $ 2,500 to E. W. Hardin Company, at the request of E. W. Hardin and W. C. Beesley, the president and secretary, respectively, of a corporation known as E. W. Hardin Company. That said officers of said company requested him to execute said note and put the same, together with the $ 3,000 note sued upon, up with the State Insurance Commissioner in order that the E. W. Hardin Company could make a sufficient showing before said official of assets necessary for it to engage in business in Oklahoma. That the note sued upon was not to be transferred or assigned, but was to be used only for the specific purpose above stated, and that the same was to be re-assigned or returned to him as soon as they could arrange to substitute other sufficient security; that said note was thereafter transferred by said company to W. C. Beesley, who was its secretary, and was by him transferred to plaintiff, who is W. C. Beesley's brother, without consideration, and in connivance with plaintiff and said company, and for the purpose of defrauding said defendant; that there was no consideration for the $ 2,500 note, and no consideration for the transfer of the $ 3,000 note sued upon, and he was the owner of said $ 3,000 note, and was entitled to judgment thereon, for which he prayed.
¶5 Plaintiff replied by general denial.
¶6 Upon the issues thus joined the cause was tried to a jury, resulting in a verdict and judgment for defendants, from which plaintiff appeals.
¶7 There are six assignments of error presented under four propositions.
¶8 It is first contended that the court erred in refusing to instruct the jury to return a verdict for plaintiff; in overruling plaintiff's demurrer to defendants' evidence; and in denying plaintiff's motion for a judgment notwithstanding the verdict.
¶9 We first consider the question of the correctness of the ruling on the demurrer to defendants' evidence. This depends, of course, upon the state of the evidence at the close of defendants' case in chief.
¶10 In the class of cases here under consideration the plaintiff is deemed prima facie to be a holder in due course. But if defendant shows that the title of any person who negotiated a note is defective, the burden is then upon the plaintiff to prove that he, or some person under whom he claims, acquired the title in due course. Section 7729, C. O. S. 1921.
¶11 This does not mean that the defendant must prove to a certainty that some person who negotiated the note held the same by defective title, but when he introduces evidence reasonably tending to show such state of facts, then the onus or burden is shifted to the plaintiff to show that the note had been acquired by him in good faith, for value, in the usual course of business and before maturity. Moore v. First Nat. Bk. of Iowa City, 30 Okla. 623, 121 P. 626.
¶12 The record, as we view it, contains abundant evidence tending to show, and from which it might reasonably be inferred, that the title of the E. W. Harden Company, the United Fire Insurance Exchange, and W. C. Beesley, and each of them, to the note in question was defective. To set out such evidence at length would require too much space. Briefly and in substance, the record shows that at the time the note was obtained from Lawrence W. Nicholson, he was a young man just past 21 years of age. Apparently he was an Indian, and had owned some land near Caddo, which he had sold upon obtaining his majority. He had thereby secured $ 3,000, which he had loaned to the Wm. A. Nicholson Company, a corporation, owned or controlled by his uncle, William A. Nicholson. The $ 3,000 note in question and the mortgage securing the same was obtained by him in this way. Shortly thereafter he went to Oklahom City, and there met E. W. Hardin and W. C. Beesley, who were organizing and endeavoring to finance an insurance company known as the United Fire Insurance Exchange. They learned of his ownership of the note and mortgage and very promptly and generously offered him employment under terms which would require him, or by which he at least agreed, to buy some stock in the insurance company. They were to put him to work soliciting business for the company and appointing agents in such territory as he might select in Oklahoma, receiving as his compensation certain commissions on the business brought to the company by him, and through the agents appointed by him. The insurance company, however, was to be of such magnitude, or for some other undisclosed reasons, that it was necessary to have another corporation organized to act as attorney in fact for it. This was the E. W. Hardin Company, which was described by Hardin as a reciprocal company and had no assets, but whatever assets that came into its hands, by reason of the reciprocal relation between the two companies, automatically became the property of the insurance exchange. Young Lawrence agreed to purchase the stock and gave his demand note payable to the E. W....
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