Bennett State Bank v. Schloesser

• Decision Date: 09 April 1897
• Citation: 70 N.W. 705,101 Iowa 571
• Parties: BENNETT STATE BANK v. SCHLOESSER.
• Court: Iowa Supreme Court

101 Iowa 571

70 N.W. 705

BENNETT STATE BANK

v.SCHLOESSER.

Supreme Court of Iowa.

April 9, 1897.

Appeal from district court, Dallas county; J. H. Henderson, Judge.

This action is brought by the plaintiff bank upon certain promissory notes which it claims it purchased from W. J. Wroughten & Co., the payees of said notes, for value, before maturity, and without notice of any defenses thereto. The defendant admits the execution of the notes, and denies all other allegations in the petition; denies that plaintiff owns the notes; and denies that it purchased them for value, before maturity, and in the due course of business. In a second division of the answer the defendant avers that in April, 1892, he purchased of W. J. Wroughten & Co., for breeding purposes, a stallion named “Cæsar Augustus,” and executed the notes sued upon; that he purchased the horse for breeding purposes; that he was represented by Wroughten & Co. as being sound, good, and suitable therefor, and that defendant relied upon such representations, which were in fact untrue, and known to be so by Wroughten & Co. when made; that defendant, upon discovering said defects, rescinded the contract, and returned said horse to the sellers, who accepted him, and verbally promised to surrender to this defendant his said notes given for the purchase price of said horse. In a reply, plaintiff denies all allegations in the second division of the answer. The cause was tried to the court and a jury, and a verdict returned by the jury for the defendant, upon which a judgment was entered. Plaintiff appeals. Affirmed.Preston, Wheeler & Moffit and White & Clark, for appellant.

Shortly & Harpel and R. S. Barr, for appellee.

KINNE, C. J.

1. Error is assigned upon the court's rulings in admitting evidence on the part of the defendant which tended to establish his defense pleaded. The claim is that such evidence was improper, because the evidence shows that plaintiff was a good-faith purchaser for value, and without notice. When the evidence which is complained of was admitted, no evidence had been offered by plaintiff save the notes and the indorsements thereon. Defendant was properly permitted to introduce evidence tending to sustain the allegations of the answer. If, in the further progress of the case, it appeared that plaintiff was in fact a good-faith purchaser of the notes, for value, and without notice, then the evidence objected to could not avail the defendant. Such, at least, was not the situation when the evidence objected to was offered and received. There was no error in the rulings.

2. It is next contended that the court erred in not sustaining plaintiff's motion to direct a verdict for it. There was sufficient evidence of fraud to send the case to the jury, but it is urged that there was no evidence which tended to show that plaintiff, when it purchased the notes, had notice of the matters now urged as a defense to the notes, and that in fact the evidence shows that plaintiff had no such notice. It appears that plaintiff's cashier testified that he made the deal with Wroughten & Co., in which the bank took these notes in suit; that neither he nor the other officers of the bank had any notice of the matters pleaded by the defendant as a defense to said notes. No objection was interposed to this evidence whereby the cashier undertook to testify to want of notice on the part of all the other officers of the bank. Nevertheless, as to them, his testimony was not conclusive, and was, at best, as to matters as to which he could have had no actual knowledge. Under such circumstances we have held that the question of notice and good faith in making the purchase of notes by a partnership or bank is one for the jury. Frank v. Blake, 58 Iowa, 750, 13 N. W. 50;Bank v. Paddick, 90 Iowa, 66, 57 N....