[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
Appeal
from Texas Circuit Court.--Hon. L. B. Woodside, Judge.
REVERSED
AND REMANDED.
STATEMENT.--This
is an action on a promissory note given to A. H. Willard and
indorsed "without recourse." The petition, in
addition to the usual allegations, avers that plaintiff is a
holder of the note in due course. The answer raises the issue
of good faith and sets up fraud and failure of consideration.
A trial resulted in a verdict and judgment for defendants
and plaintiff appealed.
The
answer is in substance as follows:
"Defendants
deny that before the maturity of said note the payee therein
A. H. Willard, for a valuable consideration sold, indorsed or
delivered said note to the plaintiff herein who then or there
in good faith became in due course the owner or holder of
said note or entitled to receive the amount due thereon nor
is plaintiff now the owner or holder of said note.
"Defendants
further say that J. L. Harrison is an accommodation maker of
said note and that he signed the same at the request and for
the accommodation of J. W. Jackson, the principal therein.
"For
further answer, defendants say that on the 12th day of
December, 1907, there was a certain corporation known as the
Standard Horse Company, engaged in the business of buying and
selling stallions and horses under the laws of the State of
Missouri and that its principal office and place of business
was then and is now in the City of Springfield, Missouri;
that one A. H. Willard was then and is now a stockholder in
said corporation, a member of its board of directors, and
also general manager. That on or about the 12th day of
December, 1907, the said A. H. Willard came to the city of
Cabool, in Texas county, Missouri, and represented to divers
men of business, wealth and influence in that vicinity, that
the Standard Horse Company, the aforesaid corporation, was
the owner of a standard bred stallion named and known as
'Cambridge Boy;' that the said Standard Horse Company
was desirous of selling the said horse to the farmers of
Cabool and vicinity; that the Standard Horse Company, in
order to negotiate the sale of said horse to said farmers,
needed the assistance of some men of business, wealth and
influence in that neighborhood to assist it in selling said
horse to said farmers and represented to them that the plan
and scheme of said company to sell said horse was to sell
shares or interest in the horse of the value of $ 200 each
and of the number of 20; and offered if they, the aforesaid
men of business, wealth and influence, would assist in making
said sale and for the purpose of inducing the said farmers of
Cabool and vicinity to buy said horse would pretend to buy
shares in said horse, and would execute and deliver to the
said A. H. Willard their checks for eight shares of said
horse so that he, the said A. H. Willard, could have said
checks to show to said farmers as proof and tell them that
the aforesaid men of business, wealth and influence had
bought and paid for eight shares of said horse, the said
Standard Horse Company would return them their checks unpaid
and give them 8 out of the 20 shares for which said horse
should be sold, which proposition of the aforesaid A. H.
Willard and the Standard Horse Company was accepted and they
executed and delivered to the said A. H. Willard their divers
and sundry checks for the aggregate sum of $ 1600.
"That
the said A. H. Willard, after being armed with the pretended
checks went out to interview the farmers and try to induce
them to buy the remaining shares of said horse. That A. H.
Willard afterwards called upon J. W. Jackson, the principal
defendant herein, a farmer residing in the vicinity of
Cabool, and represented to the said J. W. Jackson that the
corporation aforesaid was the owner of a standard bred
stallion named and known as 'Cambridge Boy' and that
said corporation was desirous of selling said horse to the
farmers of Cabool and vicinity for the price and sum of $
4000 and that a plan had been adopted for the purchase of
said horse and that the plan adopted was to sell interest or
shares in said horse at $ 200 each to the number of 20 and
that each party who purchased shares in said horse should pay
cash or make and deliver to the said A. H. Willard his note
or notes for the same payable in one and two years after date
thereof. That the said A. H. Willard knowingly and designedly
for the purpose of inducing defendant, J. W. Jackson, to
purchase a share in said horse, falsely and fraudulently
stated to defendant, J. W. Jackson, that the aforesaid men of
business, wealth and influence had purchased and paid for
eight shares of said horse and exhibited to said defendant
for his inspection as proof of said pretense, representation
and statement, the checks of the aforesaid men purporting to
be given for the payment of the 8 shares of said horse. That
relying on said pretense, statements and representations of
said A. H. Willard and believing the same to be true and
being deceived thereby, was thereby induced to and did
purchase one share of said horse for the price and sum of $
200, and executed and delivered to the said A. H. Willard the
note filed with the plaintiff's petition, for the same.
"That
said pretense, representations and statements were made by
the said A. H. Willard for the sole purpose of inducing the
defendant to purchase a share in said horse; that in truth
and in fact the said horse was not worth the sum of $ 4000;
that said horse is absolutely worthless. That said checks
given by said men of business, wealth and influence were
given by them to the said Standard Horse Company to assist it
in perpetrating a fraud on this defendant and others, and
that their pretended checks were returned to them when the
aforesaid purpose for which they were given had been
accomplished.
"That
as seen as defendant ascertained the facts he tendered his
share in said horse back to the said A. H. Willard and the
said Standard Horse Company; that A. H. Willard and plaintiff
then and there refused to accept such tender, and defendant
now tenders in court his share in said horse."
The
plaintiff is a resident of Springfield, Missouri, and the
defendant resides near Cabool, Missouri. The note in question
was given as part of the purchase price of a stallion, but
whether from the Standard Horse Company, or from A. H.
Willard, its manager, individually, is not clearly shown. The
plan was to sell twenty shares at $ 200 each, valuing the
horse at $ 4000, and to let the purchasers through a
committee make their choice from a large number of horses.
In the
latter part of the year 1907, A. H. Willard, manager of the
Standard Horse Company, of Springfield, and an associate and
agent, one James, came to Cabool for the avowed purpose of
executing this design. They first visited, separately,
Messrs. Henry Parmenter, James McDowell, John Bauch, S.W.
Grant, and Henry Stogsdill, men of business, wealth and
influence of that community, and agreed to give each a share
in said horse for assistance in making the sale, and arranged
with these persons to give their checks for the amount which
a share would amount to with the understanding that said
checks would be returned; and they exhibited these checks to
these defendants, and others, who gave their notes, and then
Willard gave the checks back to the drawers. The nature of
the assistance contracted for is variously described by the
witnesses. Some say they were to pass on the notes, others
that they were to tell who would be likely to buy, and yet
others that they were to help place the horse. At any rate,
each of these men gave a check for $ 184, the price of a
share in the stock company, less the discount,--as he says,
"To show people I had bought a share;" with the
express understanding that these checks should not be
collected but would be returned to the drawers.
Armed
with these indicia of the genuine sale of shares, Willard and
his associate went to interview the farmers of the
neighborhood, and near the close of their labor visited
defendant Jackson. Willard was not present at the first
conversation, however, and James was introduced as a
representative of the Springfield Standard Horse Company. He
said the horse belonged to the Company and he could not sell
unless he secured twenty men to take one share each at $ 200.
He claimed the purchase would be for the good of the
community, and that he had only one share for the defendant.
As among those who had taken shares, he mentioned James
McDowell, Henry Parmenter, S.W. Grant, Henry Stogsdill, and
several farmers. Defendant declined to purchase and James
went back to Cabool. Defendant testified: "In an hour or
two Henry Parmenter called me up over the 'phone and
asked me if I had taken an interest in the horse and I told
him no. I asked him if he had and he said, 'Yes.' He
said he believed it was a good thing and he said I had better
take an interest."
In a
day or two, Willard, appeared at defendant's farm and was
also introduced as a representative of the Springfield
Standard Horse Company. He said he wanted to get defendant to
take an interest in the Company's horse, and had an
additional inducement to offer; If defendant would raise two
colts to the age of four months they would be taken in
payment for a share in the horse. He said the horse was a
sure foal getter, was cheap at $ 4000, and could not be sold
for less. "He told me that Henry Parmenter, John Bauch
S.W. Grant, Henry Stogsdill, Jim McDowell, and others, had
signed, and that the bankers with Henry Stogsdill, that is,
Grant, Parmenter, McDowell and Bauch,...
