Citizens' Union National Bank v. Thweatt

• Decision Date: 10 November 1924
• Docket Number: 232
• Citation: 265 S.W. 955,166 Ark. 269
• Parties: CITIZENS' UNION NATIONAL BANK v. THWEATT
• Court: Arkansas Supreme Court

265 S.W. 955

166 Ark. 269

CITIZENS' UNION NATIONAL BANK v. THWEATT

No. 232

Supreme Court of Arkansas

November 10, 1924

Appeal from Prairie Circuit Court, Southern District; George W Clark, Judge; reversed.

Judgment reversed.

M. F Elms, for appellant.

The only inquiry the court should have permitted was the proposition whether the evidence was sufficient to show that appellant was not an innocent purchaser of the note sued on and, there being no dispute that it purchased the note long before maturity, for a valuable consideration and in due course, the point of the inquiry was whether or not the appellant, at the time it purchased the note, or before it paid for the same, had any notice of any possible defense to or defects in the instrument. 90 Ark. 93. Mere knowledge that the Louisville Silo & Tank Company was engaged in the business of selling and distributing silos and cribs was not sufficient to charge appellant with notice of defenses to or defects in the note. 94 Ark. 100. After-acquired knowledge or notice of defenses or defects is not effective. 90 Ark. 93.

Cooper Thweatt and W. A. Leach, for appellee.

It being admitted that the Louisville Silo & Tank Company was a foreign corporation and had not complied with the laws of this State with reference to such corporations doing business in the State, the note, even in the hands of an innocent purchaser, cannot be enforced. 136 Ark. 52; 148 Ark. 151; 141 Ark. 38. If the trial court erred in its instruction to the effect that if the appellant knew that the note was given for the purchase price of the granary, it was bound by the implied warranty that it was fit for the purpose for which it was sold, and was therefore not an innocent purchaser, a reversal of the case does not necessarily follow, and should not, if the above contention is correct.

M. F. Elms, for appellant, in reply.

The transaction, as shown by the evidence, did not constitute doing business in this State within the prohibition of the statute. The shipment of the granary along with others in the same car, did not alter its character as an interstate shipment, neither did its consignment to the salesman in Arkansas for distribution to the various purchasers change its character as an interstate shipment. 227 U.S. 389, 57 L. ed. 565; 227 U.S. 399, 57 L. ed. 569.

OPINION

SMITH, J.

The Louisville Silo & Tank Company, through its salesman, obtained an order for a steel granary from appellee, J. G. Thweatt. This order was transmitted to the company's office in Louisville, and there accepted. The granary sold appellee was shipped from Ohio, in a car consigned to the agent at Stuttgart, along with a number of other granaries for which the agent had taken orders. Each granary was separately packed, and each had the name and address of the purchaser stamped thereon. The shipments were made together to secure the advantage of car lot rates, but some of the granaries were taken out of the car in which they were originally shipped at Stuttgart and were loaded into a car for delivery at the homes of the purchasers, some of whom did not live at Stuttgart and did not receive their freight at that place. Appellee resided at DeValls Bluff, and the granary consigned to him was reloaded at Stuttgart and shipped by local freight to DeValls Bluff, where delivery was made.

Upon delivery of the granary, appellee paid the portion of the purchase price in cash which the contract of sale required, and executed his note for $ 469, the balance of purchase money, payable to the order of the silo company. This note was dated September 30, 1918, and matured January 1, 1919, and bore interest at six per cent. per annum from its date. On October 7, 1918, the note was sold, indorsed and delivered by the silo company to the appellant bank, whose place of business is in Louisville, Kentucky, and, according to the testimony offered on behalf of the bank, it paid full value for the note, and acquired the same without notice that there was any defense to it.

The granary was put up, and proved defective and valueless for the purpose for which it was sold, in that it admitted rain in openings which were intended only to admit air. An unsuccessful attempt was made to amend the defect, which appellee said was...