Herman v. Gunter

• Decision Date: 19 January 1892
• Citation: 18 S.W. 428
• Parties: HERMAN <I>et al.</I> v. GUNTER.
• Court: Texas Supreme Court

18 S.W. 428

HERMAN et al. v. GUNTER.

Supreme Court of Texas.

January 19, 1892.

Commissioners' decision. Section A. Error from district court, Dallas county.

Action by Nat Gunter against J. L. Herman and others upon a promissory note. Judgment for plaintiff. Defendants appeal. Affirmed.

A. S. Lathrop, for plaintiffs in error. W. Spence and Leake, Shepard & Miller, for defendant in error.

MARR, J.

The counsel for plaintiffs in error makes the following statement of the nature and result of the suit: "This suit was brought by the defendant in error, plaintiff below, against plaintiffs in error, on January 12, 1887, on a promissory note dated July 1, 1885, signed by J. L. Herman, and payable to his order six months after date, and indorsed by said Herman, and also by J. J. Levy and E. M. Tillman. In plaintiff's petition it is alleged that plaintiff bought said note from Belle C. Pierce, and that the same was transferred to him for a valuable consideration before the same became due. On the 2d day of May, 1887, defendants filed their first amended original answer, pleading general demurrer, general denial, and failure of consideration; stating fully therein wherein there was a failure of consideration in said note, and that the same was procured by fraud and false representations; and also pleaded that the defendant in error herein had actual, as well as constructive, notice of the failure of consideration of said note before he became the possessor or owner of same; which plea was duly sworn to. On the 27th day of March, 1889, defendants filed their sworn application for a continuance of said cause. The application was overruled, and defendants forced into trial, which resulted in a verdict and judgment for plaintiff. On March 28, 1889, plaintiffs in error filed a motion for a new trial, which on May 29, 1889, was overruled, to which defendants excepted, and gave notice of appeal in open court. Plaintiffs in error also took a bill of exceptions to the order of the court overruling his application for continuance." Subsequently, and in due time, the defendants below perfected the writ of error to the supreme court. We shall postpone the first assignment of error for the present.

The second assignment of error is as follows, viz.: "The court erred in that part of its charge wherein it says: `And to rebut this finding it is necessary for the defendants to show, first, that the consideration for which the note was given has failed, and that the plaintiff and his assigns had knowledge of such failure,' — for the law is that, after defendants prove failure of consideration, then it devolves on plaintiff to show that he got the note for a valuable consideration, without notice of failure of consideration." The contest in this case is between the makers of the note (which is negotiable) and remote or subsequent indorsees, between whom there is no privity. 1 Daniel, Neg. Inst. § 174. In the same paragraph of the charge in which the above language, by way of a qualification, is used, the court correctly instructed the jury to the effect that the plaintiffs, as the indorsee and holder of the note, "is presumed to have acquired it for value, before maturity, and without notice of any failure of consideration." Blum v. Loggins, 53 Tex. 121; 1 Daniel, Neg. Inst. § 812. There being evidence tending to show a failure of the consideration for the note itself, the defendants below contend that, after they had offered such testimony, the burden of proof was shifted to the plaintiff, and that it then devolved upon him to prove that he obtained the note without notice of this infirmity and for value. This may be the rule between the maker and payee, or an indorsee and his immediate indorser, but not when the plaintiff is a remote indorsee, and sues no one in privity with himself. In such case the defendant is required under the law to assume the double burden of establishing, not only the failure of the original consideration for the note, but also that the plaintiff acquired the same with notice, without paying a valuable consideration. In the present instance, there is no proof whether plaintiff had notice or paid value or not. We think that, under the circumstances of this case, there was no error in the charge of the court in the particular here complained of; and this will also dispose of the fourth assignment of error, which presents the same question upon the action of the court in refusing to allow a special instruction upon the burden of proof. Id. §§ 165, 812, 814, et seq.; Blum v. Loggins, supra; Greneaux v. Wheeler, 6 Tex. 515; Collins v. Gilbert, 94 U. S. 753. We do...