Farmers' State Bank of Riverton v. Johnson

• Decision Date: 08 March 1927
• Docket Number: 1286
• Citation: 253 P. 858,36 Wyo. 191
• Parties: FARMERS' STATE BANK OF RIVERTON v. JOHNSON [*]
• Court: Wyoming Supreme Court

253 P. 858

36 Wyo. 191

FARMERS' STATE BANK OF RIVERTON v. JOHNSON ^[*]

No. 1286

Supreme Court of Wyoming

March 8, 1927

APPEAL from District Court, Fremont County; ROBERT R. ROSE, Judge.

Action by the Farmers' State Bank of Riverton against L Johnson, instituted before a justice of the peace. Judgment for defendant, and plaintiff took case to district court by a proceeding in error, where judgment was affirmed, and plaintiff appeals.

Affirmed with Direction.

A. C Allen, for appellant.

The District Court erred in dismissing the appeal from Justice Court; defendant in error waived right to challenge jurisdiction of District Court by filing an amended answer therein and joining issue with plaintiff in that court; the court erred in dismissing the appeal, for that an attachment had been issued and the issues thereunder remained undisposed of; the District Court erred in dismissing the appeal, for the reason that Section 6394 C. S. required that court to retain cases on error, for final judgment, the same as cases on appeal, except where reversed for want of jurisdiction the record discloses that the District Court doubted its jurisdiction; the justice had jurisdiction under Section 6394 C. S.; Glendenning v. Guise, 55 P. 447. Judgments of Justice Courts may be reviewed (1) by appeal; (2) by proceedings in error; Laws 1895, Chapter 57; 3127-3173 C. S.; defendant pleaded to the merits in Justice Court, and waived defects in pleadings; the amended answer, filed in the District Court, admitted execution of the note and endorsements, alleged that payee obtained the note under false representations, and that plaintiff was not a holder in due course; knowledge by endorsee of a note, that it was given in consideration of an unperformed executory agreement, does not deprive endorsee of his character of a bona fide holder in due course, unless he had notice of the breach prior to his acquisition of the note; Moyses, et al. v. Bell, (Wash.) 114 P. 193; Joyce on Com. Paper, 2nd Ed., Sec. 636; Dawson Gas Co. v. Woodhull, 67 F. 451. A note payable to order may be transferred by delivery without endorsement, and an endorsee may recover thereon without proving the transfer; Gumaer v. Sowers, (Colo.) 71 P. 1103. Possession imports prima facie that the holder acquired it bona fide for value, and is the owner thereof; Joyce 389. A written assignment is unnecessary in the absence of statute, to transfer a title to a note; Bank v. Moore, 137 F. 505-507. One pleading want of consideration must prove it by a preponderance of the evidence; Topper v. Snow, 200 Ill. 434; McMicken v. Stafford, 197 Ill. 540; Gallahan v. Co., (Ky.) 131 S.W. 995; 8 C. J. 890. The endorsement proves itself unless put in issue; where endorsee does not claim title by endorsement, but merely by purchase in due course of trade, proof of the endorsement is not necessary; 8 C. J. 1054; Bank v. Aprout, (Nebr.) 110 N.W. 713. Suspicion of defect of title will not defeat title; that result can be produced only by bad faith; Stevens v. Grisso, 216 P. 671. Every endorsee is presumed to be a holder in due course; Wells v. Ins. Ass'n., 213 Ill.App. 549. The pleadings were sufficient to entitle plaintiff to judgment and were supported by the evidence; the court refused to enter judgment for plaintiff in accordance with the law on the evidence; the court erred in entering judgment against plaintiff for costs.

George H. Paul, for respondent.

No error having been discovered, the judgment was properly affirmed on appeal; 6393 C. S. Nothing is examinable but the bill, answer and exhibits; 4 C. J. 672. The justice judgment was entered within twenty-four hours after the trial, as required by statute; 6253 C. S. A party is bound by his pleadings; 15 Wyo. 217. Where judgment of a justice is affirmed on error, it carries costs; 6393 C. S. An amendment after judgment is permissible in furtherance of justice; 15 Wyo. 150; 21 Wyo. 448. The same principle applies to appeals; 2 Haynes on New Trial, p. 1552. Where holder of instrument, payable to his order, transfers it without endorsement, the transferee takes such title as the transferor had therein; 3982 C. S. Endorsements on a note are no part thereof; Bank v. Bank, 24 Wyo. 423. 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 title in due course; 3992 C. S. The title is defective when the instrument, or any signature thereto, was obtained by fraud, duress or other unlawful means; 3998 C. S. The mere crediting a depositors account does not constitute a bank a holder in due course; Thompson v. Bank, 150 U.S. 231; Bank v. Trading Co., 6 A. L. R. 340, and cases cited. Until deposit is drawn out, the bank holds subject to the equities of prior parties; the title of a person, who negotiates a note in breach of faith, is defective; 1917 B Ann. Cas. 839; Bank v. Carter, 144 Ia. 715; Connoly v. Bank, 185 N.W. 887; Trust Co. v. Vaughn, 277 F. 145; Bank v. Marden, 234 Mass. 161. It is the contention of respondent that there is a secret understanding between the bank and Allen and Kingery that they will pay the amount of money to the bank in the event the bank fails to enforce payment from Johnson.

KIMBALL, Justice. BLUME, Ch. J., and POTTER, J., concur.

OPINION

KIMBALL, Justice.

The plaintiff sued before a justice of the peace to recover on a promissory note for $ 147, signed by defendant, payable to H. W. Kingery, an agent for a life insurance company. The note was for the first premium on a policy of insurance for which the defendant had made application. The defendant admitted making the note, but claimed that it had been procured by false representation; that the policy of insurance for which the note was given had never been delivered, and that the plaintiff was not a holder in due course. The justice of the peace after a trial without a jury, rendered judgment that the plaintiff recover nothing, and that the costs taxed at $ 7.40 be paid by plaintiff. The plaintiff took the case to the district court by proceeding in error. The district court found no error disclosed by the record, and affirmed the judgment of the justice court. Following Section 6393, Wyo. C. S. 1920, the judgment of the district court included a judgment against plaintiff for the costs in the district court, and awarded execution therefor, and for the "additional sum of $ 7.40, being the judgment for costs heretofore made and entered by the said justice of the peace in favor of defendant." From this judgment of the district court, the plaintiff appeals.

When the case came to the district court, a great many unnecessary things were done. After the defendant had unsuccessfully demurred to the petition in error and moved to dismiss the proceeding, the plaintiff obtained leave to amend its written pleading filed in the justice court, and the defendant filed several amended answers. Evidence was taken as though the case were ready for trial de novo. The plaintiff sued out a writ of attachment, and defendant's property was attached. All this, before it had been decided whether or not there was any error for which the judgment of the justice of the peace should be reversed. A proceeding in error in the district court for the purpose of reviewing the judgment of a justice of the peace, is not unlike the similar proceeding in this court to review a judgment of the district court. Unless the record brought up discloses some reversible error, the judgment of the lower court will be affirmed. An important difference is that in the district court, when the judgment of the justice of the peace is reversed, the case is retained for trial de novo, except in cases where the justice had no jurisdiction. C. S. 1920, Sec. 6394. Critchfield v. Robinson, 80 Ohio St. 364, 88 N.E. 792. If the record brought up to the district court in response to the petition in error discloses no reversible error and the judgment of the justice is accordingly affirmed, there is no issue of fact for trial in the district court. In the case at bar, the district court, having found no error in the record, affirmed the judgment, and on appeal to this court the only point to be decided is whether the district court erred in its decision on the record sent up from the justice court. Hudson Coal Co. v. Hauf, 18 Wyo. 425, 435; 109 P. 21; Haney v. Welty, 24 Wyo. 531, 534, 162 P. 932.

The judge of the district court seems to have had the foregoing principles in mind, and when, without first having decided that a new trial was proper, he listened to evidence on the issues that had been tried by the justice, it was probably understood that such evidence was not to be considered or acted on unless the judgment of the justice were reversed. This evidence, and the amendments in the district court of the pleadings on which the case had been tried in the justice court, must be disregarded by us as no doubt they were by the judge of the district court when he affirmed the judgment of the justice.

It is frequently alleged in the specifications of error that the court erred in "dismissing the appeal." There was no appeal pending in the district court. An appeal from a justice of the peace under chapter 409, C. S. 1920, is very different from a proceeding in error under chapter 390. The proceeding in error in the district court was not "dismissed." In order, therefore, to give any meaning to specifications of error that refer to the "dismissing of the appeal," we must assume that they refer to the judgment affirming the judgment of the justice.

The first specification of error is that the district court erred in "dismissing the appeal from the justice court" for the reason that, at a previous term, defendant's motion to dismiss had been denied....