Kerby v. Hiesterman

• Decision Date: 08 March 1947
• Docket Number: 36691.
• Citation: 162 Kan. 490,178 P.2d 194
• Parties: KERBY et al. v. HIESTERMAN et al.
• Court: Kansas Supreme Court

178 P.2d 194

162 Kan. 490

KERBY et al. v. HIESTERMAN et al.

No. 36691.

Supreme Court of Kansas

March 8, 1947

Appeal from District Court, Washington County; W. D. Vance, Judge.

Appeal from District Court, Washington County; W. D. Vance, Judge.

Action by J. H. Kerby and Warren H. Kerby, partners, doing business as the K-M Securities Company of Clay Center, Kansas, against John Bott and another, on a promissory note. The named defendant died and the action was revived against D. H Hiesterman and Arthur Bott, administrators of the estate of John Bott, deceased. Judgment for plaintiffs and defendants appeal.

Reversed with directions.

Syllabus by the Court.

1. The record in a promissory note case examined and it is held that the question whether the holders acted in good faith or were guilty of bad faith in connection with the purchase of the note was a question for the jury.

2. A given instruction relative to bad faith was not clearly erroneous, was not objected to at the time of the trial, and therefore, objections to the instruction, asserted for the first time on a motion for a new trial, did not compel the granting of a new trial.

3. When a prospective juror, on voir dire examination, gives a false or deceptive answer to a question pertaining to his qualifications with the result that counsel is deprived of further opportunity to determine whether the juror is impartial, and the juror is accepted, a party deceived thereby is entitled to a new trial even if the juror's possible prejudice is not shown to have caused an unjust verdict.

J. R Hyland, of Washington (H. N. Hyland, of Washington, on the brief), for appellants.

W. M Beall, of Clay Center (F. R. Lobaugh, of Washington, on the brief), for appellees.

BURCH, Justice.

This appeal is from the retrial of the same case reported in Kerby v. Bott, 160 Kan. 566, 164 P.2d 84. In the first trial the jury's verdict was for the defendant. Our decision on appeal directed a new trial. In the second trial the jury's verdict was for the plaintiffs. The original defendant, John Bott, died after the first and before the second trial occurred and the action was revived against his administrators. They appeal and assert that the trial court erred in overruling their motion for judgment notwithstanding the verdict and in overruling their motion for a new trial because they contend that erroneous instructions were given and that a juror was guilty of misconduct.

A few facts follow: Two juries have found that John Bott was induced by false statements made to him by D. J. Briggs to sign a note for $2,500. The plaintiffs purchased the note from Briggs before its maturity for $2,200. They contend that they are holders of the note in due course. The jury in the present case found that the plaintiffs were not guilty of bad faith in connection with its purchase. Plaintiffs have an unpaid default judgment against Briggs. Additional facts are recited in our first opinion and will not be set forth herein except such as may be essential for consideration of the controversial questions.

1. The first question, whether the trial court should have sustained the defendants' motion for judgment, must be answered in the negative. Counsel for the defendants contend that our opinion in the former appeal establishes the rule that under the evidence adduced in the trial of this case the defendants are entitled to judgment as a matter of law. The decision is clearly authority to the contrary. Nothing will be gained by wasting print and paper in a prolonged statement of the facts and circumstances from which different juries have reached different conclusions. It is evident that the answer to the factual question is one upon which reasonable minds may differ and consequently the question of the plaintiffs' good or bad faith was for the jury. It cannot be said in the instant case that the evidence presents only a question of law.

2. The next question before us is whether the defendants' motion for a new trial should have been sustained. Error is asserted in the giving of an instruction reading as follows: 'No. 8. You are instructed that to constitute notice of infirmity in a note, or defect in the title of the person negotiating or transferring the same, the person to whom it is negotiated must have actual knowledge of the infirmity or defect, or knowledge of such facts that his action in purchasing the instrument amounted to bad faith. What is bad faith in a case of this kind, is a question of fact to be determined by the jury, and in this connection you are instructed that neither a suspicion of defect of title, knowledge of circumstances which would excite such suspicion in the mind of a prudent man, or put him on inquiry, nor even gross negligence on the part of the purchaser will affect his rights unless the circumstances are so potent and obvious that to remain passive would amount to bad faith.'

Defendants contend that the above instruction places the burden of proving the plaintiffs' bad faith upon the defendants. If such an implication could arise from the instruction, any confusion it might have caused the jury certainly was clarified by the trial court's instruction No. 16, which reads as follows: 'You are further instructed that if you find from the evidence that D. J. Briggs was guilty of fraud or misrepresentation, as charged in this case, in securing the signature of John Bott to the note sued upon, it is then incumbent upon the plaintiffs to establish to your satisfaction, by the degree of proof above explained, and under the evidence received in the case, that they did purchase the note from Briggs before it was due, for value, and in good faith.'

Perhaps the wording of the asserted erroneous instruction is confusing and places too much emphasis upon negative circumstances even though its language is lifted largely from the opinion of this court in the case of Elmo State Bank of Elmo v. Hildebrand, 103 Kan. 705, 177 P. 6, 3 A.L.R. 54. The record in the present case, however, does not warrant our passing upon the wording of the instruction. According to the record before us, the defendants apparently made no effort to have the instruction modified or clarified before it was given to the jury. Therefore, the presumption prevails, upon the appeal, that the defendants permitted the trial court to give the instruction with their approval. In such circumstances they are not in a position to demand a new trial because they willingly participated in the possible error until it was too late for the trial court to consider correcting the instruction before it was given to the jury. The instruction as given was not entirely erroneous and consequently, the fact that defendants criticized its construction on a motion for a new trial does not make it mandatory that a new trial be granted. The question involved was given extended consideration in our opinion by Mr. Justice Parker in Sams v. Commercial Standard Ins. Co., 157 Kan. 278, at 287, 139 P.2d 859. (See, also, the opinion of this court by Mr. Chief Justice Harvey in Steele v. Russell, 162 Kan. 271, 176 P.2d 251.) The opinion written in connection with the former appeal of the instant case comments upon the failure to object to instructions, but calls attention to the fact that the jury in the first trial made damaging findings of fact which could not have been based upon any evidence. Such findings could have been attributable only to the fact that the trial court included in the statement of issues framed by the pleadings allegations of the defendant to the effect that Briggs was a dealer in oil stocks and doubtful securities. The defense had been abandoned. Nevertheless, the jury answered proper special questions by finding that Briggs was such a dealer and that he did not have a license from the state to sell such securities. Because of such circumstances, it was apparent that the plaintiffs did not have a fair trial in the first instance and a new trial was directed for such reason. We do not have a parallel situation in the present appeal and we find no reason which would justify our departure from the precedents developed in the citations hereinbefore given. Perhaps at this point it is prudent, however, to volunteer an admonition to courts and counsel that instructions should not be composed by carving from our opinions certain statements which are applicable or controlling only in the cases in which they appear and inserting such excerpts in general instructions. Instructions should be general in their nature and should not emphasize certain factors and omit others in such manner that the instructions become argumentative in effect.

Another instruction complained of in the present case reads as follows: 'You are further instructed that when a situation arises in which one of two innocent parties must suffer because of the acts of a third party, then as between said innocent parties the burden must be borne by the one who made it possible for such third party to commit the act from which loss or injury results.' We think the above instruction should not have been given. Where one sues on a note, claiming to be a holder in due course by endorsement from the payee, for value and before maturity, and when the defendant alleges and establishes by evidence that he was induced by fraud to execute the note, the burden is upon the plaintiff to show that he is a holder in due course. (G.S.1935, 52-509; United Finance Plan v. Meier, 147 Kan. 688, 78 P.2d 904, and cases there cited.) The instruction states a rule sometimes applied by courts of equity where the facts warrant it, as in Smith v. Rector, 135 Kan. 326, 10 P.2d 1077, and Wiseman v. Richardson, 154 Kan. 245, 118 P.2d 605. These cases were cited by appellees as...