Cedar Rapids Nat. Bank v. Myhre Bros.

• Decision Date: 09 March 1910
• Citation: 57 Wash. 596,107 P. 518
• Court: Washington Supreme Court
• Parties: CEDAR RAPIDS NAT. BANK v. MYHRE BROS.

107 P. 518

57 Wash. 596

CEDAR RAPIDS NAT. BANK v. MYHRE BROS.

Supreme Court of Washington

March 9, 1910

Department 2. Appeal from Superior Court, Spokane County; Wm. A. Huneke Judge.

Action by the Cedar Rapids National Bank against Myhre Bros Judgment for defendants, and plaintiff appeals. Affirmed.

Munter & Lovejoy, for appellant.

Davis &amp Davis, for respondents.

PER CURIAM.

This is an action brought by appellant bank against the respondents Myhre Bros., to recover on a promissory note for $234 executed and delivered by respondents to the Sterling Manufacturing Company, and by said corporation transferred by indorsement before maturity. The note was given in payment for a consignment of jewelry. Respondents defended the action on the ground of failure of consideration, breach of implied warranty, and fraud in the inception of the instrument sued on, and denied that appellant was an innocent purchaser for value before maturity in the usual course of business. The case was submitted to a jury who returned a verdict in favor of respondents, the defendants in the action below. The testimony is overwhelming that the jewelry was worthless, and that the note was obtained by misrepresentation and fraud. The second question involved is Was the plaintiff bank the holder of the note in due course? Section 59 of the negotiable instruments law (Sess. Laws 1899, p. 351) is as follows: 'Every holder is deemed prima facie to be a holder in due course; but when it is shown that the title of any person who has negotiated the instrument was defective, the burden is on the holder to prove that he or some person under whom he claims acquired the title as holder in due course.' And section 52 of the same act is as follows: 'A holder in due course is a holder who has taken the instrument under the following conditions: (1) that it is complete and regular upon its face; (2) that he became the holder of it before it was overdue, and without notice that it had been previously dishonored, if such was the fact; (3) that he took it in good faith and for value; (4) that at the time it was negotiated to him he had no notice of any infirmity in the instrument or defect in the title of the person negotiating it.' So it appears that the burden was upon the plaintiff in this case to show that it was a holder in good faith, and the question of whether or not that burden was successfully met was one which was submitted to the...