Clay & Funkhouser Banking Co. v. Dobyns

• Citation: 255 S.W. 946,213 Mo. App. 468
• Decision Date: 06 November 1923
• Docket Number: No. 18067.,18067.
• Parties: CLAY & FUNKHOUSER BANKING CO. v. DOBYNS et al.
• Court: Court of Appeal of Missouri (US)

255 S.W. 946

213 Mo. App. 468

CLAY & FUNKHOUSER BANKING CO. v. DOBYNS et al.

No. 18067.

St. Louis Court of Appeals, Missouri.

November 6, 1923.

Appeal from Circuit Court, Audrain County; Ernest S. Gantt, Judge.

Action by the Clay & Funkhouser Banking Company against Ralph Dobyns and another. Judgment for defendants, and plaintiff appeals. Affirmed.

Fry & Fry, of Mexico, Mo., for appellant.

Rodgers & Buffington, of Mexico, Mo., for respondents.

ALLEN, P. J.

This is an action upon two bills of exchange, referred to in the evidence as trade acceptances. The two instruments are identical in form, and we set one of them out below as follows:

                "$250.00
                   10.06
                ________
                 $260.06   Mexico, Mo., April 1, 1921
                

"One hundred and eighty days from date hereof, pay to the order of the Producers' Consolidated Oil Company, $250 at the office of Savings Bank of Mexico, Mo., for petroleum products sold to drawee. With interest hereon at the rate of 8 per cent, from date.

                To ______
                    "The Producers' Consolidated Oil Company
                        "By M. E. Pride, Secy-Treas."
                

Written across the face of each instrument, at the left end thereof, is the following:

"Accepted April 1, 1921. This obligation arises out of the actual purchase of goods from the

                drawer.           [Signed] Ralph Dobyns
                                            "A. L. Hendrix."
                

The suit is by the plaintiff bank against the two acceptors, Dobyns and Hendrix, plaintiff claiming to be a holder in due course. The defense is that the acceptance of the instruments by defendants was procured by false and fraudulent representations on the part of the drawer thereof; that the acceptance by defendants was wholly without consideration; that the instruments were negotiated in breach of faith, and under such circumstances as to amount to a fraud.

It appears from the testimony in plaintiff's behalf that plaintiff acquired the instruments before maturity, receiving them as collateral security for a loan made to the drawer, the Producers' Consolidated Oil Company. And it further appears from plaintiff's evidence that plaintiff bank took the instruments without notice of the defense now asserted by these defendants.

The testimony in defendants' behalf tends to show that they accepted these instruments upon the agreement of the Producers' Consolidated Oil Company that it would erect an oil pumping and filling station in Mexico, Mo., and that defendants would receive certain coupon books entitling them to receive gas and oil from such station at a reduced rate. It appears, without dispute, that such gasoline and oil station was never completed; that the company became bankrupt, and defendants received nothing whatsoever in the transaction. It further appears that the instruments were accepted by the defendants upon the agreement of the drawer that they would be placed in the Mexico Savings Bank with the coupon books to be delivered to defendants, there to remain until defendants had used the amount of gas and oil called for by such coupons.

At the close of the entire case the trial court peremptorily directed a verdict for the defendants, which was accordingly returned by the jury. From a judgment entered on this verdict the plaintiff has appealed.

In thus directing a verdict the trial court evidently proceeded upon the theory that neither of the instruments sued upon was complete and regular upon its face when negotiated, since the name of the drawee did not appear therein, and that consequently the plaintiff did not and could not become a holder thereof in due course under the statute. And such is the contention of learned counsel for defendants, respondents here. This contention, we think, must be upheld. Section 838 of our Negotiable Instruments Law; i. e. section 838 of the Revised Statutes of 1919, provides 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. * * *"

Other sections of our Negotiable Instruments Law are referred to by respondents in this connection, but we deem it unnecessary to advert thereto. No drawee is named upon the face of either of these instruments; the place intended for the name of the drawee being left blank. It is true that these defendants accepted the instruments by an acceptance written across the face...