Heller v. Cuddy

• Decision Date: 08 July 1927
• Docket Number: 26,108
• Citation: 214 N.W. 924,172 Minn. 126
• Parties: WALTER E. HELLER AND ANOTHER v. SARAH E. CUDDY
• Court: Minnesota Supreme Court

214 N.W. 924

172 Minn. 126

WALTER E. HELLER AND ANOTHER v. SARAH E. CUDDY

No. 26,108

Supreme Court of Minnesota

July 8, 1927

Plaintiffs appealed from an order of the district court for Blue Earth county, Comstock, J., denying their alternative motion for judgment or a new trial. Reversed and remanded.

SYLLABUS

Defense made to action on trade acceptances inapplicable in this case.

1. "Trick or artifice" inducing the execution of a negotiable instrument, within the meaning of G.S. 1923 § 7247, must deceive "as to the nature and terms of the contract so signed." The defense held without merit here because of the affirmance by the signer after knowledge of the precise character of the instruments in question.

Negotiability of instrument not affected by reference to transaction which gives rise to it.

2. Under G.S. 1923, § 7046 (N.I.L. § 3), "a statement of the transaction which gives rise to the instrument," contained in an instrument otherwise negotiable, does not render the promise to pay conditional and so destroy negotiability, and, standing alone, does not put the purchaser upon inquiry concerning the terms or status of the underlying contract.

Proof of purchase not weakened by failure to produce canceled check.

3. The proof that plaintiffs purchased a negotiable instrument, paid by check, and that the check was charged to their account by the bank upon which it was drawn, is not rendered inconclusive, no discrediting circumstances appearing, merely by reason of the fact that the canceled check was not produced and offered in evidence.

Bills and Notes, 8 C.J. p. 120 n. 55; p. 519 n. 61; p. 781 n. 35; p. 783 n. 54; p. 1056 n. 98; p. 1057 n. 1.

Pleading, 31 Cyc. p. 50 n. 69.

See note in 29 L.R.A.(N.S.) 351; 44 L.R.A.(N.S.) 395; L.R.A. 1918F, 1148; 3 R.C.L. 1073; 1 R.C.L. Supp. 973; 4 R.C.L. Supp. 234; 6 R.C.L. Supp. 219.

Horace W. Roberts, for appellants.

C. J. Laurisch, for respondent.

OPINION

STONE, J.

Pending this action, the defendant, John L. Cuddy, departed this life and his administratrix has been substituted in his place. The suit is by indorsees against the acceptor of three trade acceptances. After verdict for defendant, plaintiffs appeal from an order denying their alternative motion for judgment notwithstanding the verdict or a new trial.

The acceptances were given by Mr. Cuddy August 25, 1924, to and in favor of Aristocrat Manufacturing & Distributing Company of Chicago. They evidence Mr. Cuddy's obligation to pay for certain washing machines purchased from the Aristocrat company. They were indorsed before maturity to plaintiffs, and, according to their unquestioned proof, they paid for them face value less 5 per cent. There is not the slightest suggestion in contradiction of the testimony for plaintiffs that their purchase and payment were made in good faith, the usual course of business, and without notice of the transaction out of which they grew other than the notation appearing on the face of the instruments which will be referred to later.

1. One defense pleaded is that the signature of the acceptor was procured "through fraud, deceit, trick and artifice," and that Mr. Cuddy "did not sign said certificates knowing or believing them to be instruments negotiable under the law merchant and was not guilty of negligence at the time when his signature was procured." That averment is obviously defective because one of mere conclusion. Aside from that, it does not go to the extent required by the statute, G.S. 1923, § 7247, which, in order to raise the jury question contemplated, requires "fraudulent representation, trick, or artifice as to the nature and terms of the contract," as well as a belief by the signer that "he did not believe it to be a bill of exchange, promissory note, or other paper negotiable under the law merchant," and absence of negligence on his part. But we pass all that, and going to the record find that the only evidence in support of the defense is a naked assertion by a witness for defendant that in the negotiations for the sale of the machines a representative of the vendor had said to Mr. Cuddy, "There was nothing to be paid on those machines until after the campaign was completed. After they completed the campaign then what machines was sold was the only ones he was to settle for. The unsold machines to be returned." That has...