Griffith v. Shipley

• Decision Date: 18 November 1891
• Citation: 22 A. 1107,74 Md. 591
• Parties: GRIFFITH v. SHIPLEY.
• Court: Maryland Court of Appeals

22 A. 1107

74 Md. 591

GRIFFITH

v. SHIPLEY.

Court of Appeals of Maryland.

Nov. 18, 1891.

Appeal from circuit court, Montgomery county.

Action on a promissory note by Grove A. Shipley, indorsee, against Razen H. Griffith, maker. From a judgment for plaintiff, defendant appeals. Reversed.

Argued before ALVEY, C. J., and MILLER, IRVING, BRYAN, MCSHERRY, and FOWLER, JJ.

Thus. Anderson and W. Veils Bouic, Jr., for appellant. Peter & Henderson and Edward V. Peter, for appellee.

ALVEY, C. J. This action was brought by the appellee, as indorsee and holder, to recover the amount of a promissory note made by the appellant on the 20th of February, 1888, payable to F. N. Hook, or bearer, on or before the 1st of March, 1889, for $100. The note was made payable at the Union National Bank of Westminster, Md. and on failure of payment it was protested. The note itself is in ordinary form, but on the back of it there are certain printed forms of certificates or statements which have not been filled up. The purpose of one of these blank forms, it appears, was to show, when filled up, for what the note was given. The note is also indorsed in blank with the name of Francis J. Classon. Hook, the payee of the note, was at the time president of the Carroll County Industrial Grain & Seed Company, and the agent who obtained the note from the defendant was a person by the name of Forney. It appears that the note was given upon an agreement on the part of the seed company to sell to the defendant, to be thereafter delivered, 20 bushels of hulless oats, at $10 per bushel, upon the representation made by the agent, Taney, that they were of extraordinary species and productiveness. And at the time of the agreement for sale the agent produced what he represented as a fair sample of such oats, which indicated an extraordinary species or quality of that cereal, and which, he represented, would yield at least four times as much as any other oats, and would grow without hulls. He also represented to the defendant that the company would sell for him 40 bushels of hulless oats, according to the terms and prices set forth in a certain bond of the company, delivered to the defendant at the time of the making of the note, at least 30 days prior to the maturity of the note, and would from the proceeds of such sale pay off the note; that the defendant, acting upon these representations, and upon the faith of the bond, purchased the 20 bushels of "hulless oats," for which he paid the agent in cash $40, and gave the note for the balance of the price, $160; that the agent then and there assured the defendant that he would fill up the blank entry or printed indorsement on the back of the note so as to show that the note had been given for "hulless oats." This, however, the agent failed to do, and the note was transferred by Hook to Classon a few days after its date. The bond referred to in the testimony of the witnesses, and which was given to the defendant at the time he made the note sued on, is set out in the record, and is in this form: "No. 17. Feb. 20, 1888. The Carroll County Industrial Grain and Seed Company, incorporated under the laws of Maryland, F. W. Hook, Secy., W. A. Mikesell, Treas., doth hereby agree to sell 40 bushels of hulless oats for Mr. R. H. Griffith, of 7 Dist., Montgomery county, state of Maryland, at ten dollars per bushel, in good order, less $2.50 per bushel commission, on or before the 1st day of Feb., 1889. We make no monetary statements, and the person accepting this bond acknowledges to have purchased the grain at a speculative value. [Seal of Co.] F.N. Hook, President. B.H. Griffith, Buyer." The defendant then proved that he, shortly after the date of the note and the bond, received 20 bushels of oats from the seed company, but that they were in no respect similar to the sample shown at the time of the contract; that he prepared ground and seeded the oats, giving them the most favorable chances for good yield, but that the product was not more than 35 bushels, and that of a most inferior quality; that the oats in fact were worthless; and that instead of being hulless oats they turned out to be oatless hulls, and of no value whatever. And, this being the case, of course there was no attempt on the part of the company to comply with the terms of its bond. Frauds and deceptions of the character here complained of had become so frequent in some parts of the state that the legislature, by the act of 1888, c. 415, passed only a little more than a month after the date of the note sued on, has undertaken to put a restraint upon such transactions by bringing parties perpetrating such frauds within the purview of the Penal Code; and. while the provision of that statute cannot apply to this case, they furnish evidence of how such transactions are and have been regarded, and of the necessity of denouncing them as criminal by the law. In deciding this case as presented on the instruction of the court below, we must allow to the undisputed facts their full force and effect, and, so treating them, no other conclusion can be drawn than that there was gross fraud perpetrated upon upon the defendant in obtaining from him the note sued on; and the material question is whether there was evidence legally sufficient to be submitted to the jury from which they could find that the plaintiff was not a bona tide holder of the note for value. The court...