Mace v. Kennedy

• Citation: 68 Mich. 389,36 N.W. 187
• Court: Supreme Court of Michigan
• Decision Date: 02 February 1888
• Parties: MACE v. KENNEDY.

36 N.W. 187

68 Mich. 389

MACE v. KENNEDY.

Supreme Court of Michigan

February 2, 1888

Error to circuit court, Lenawee county.

Wendall A. Mace, plaintiff, sued Roland D. Kennedy, defendnat, on a promissory note. Judgment for plaintiff, and defendant appeals.

MORSE J.

The plaintiff in this suit is the holder of a promissory note for $200, which was obtained in the same manner for Bohemian oats, as the note in the case of Sutton v. Beckwith, ante, 79; a bond similar to the one in that case was executed and delivered to the defendant, the maker of the note, at the time the note was given. The main question at issue upon the trial was the good faith of the plaintiff, who purchased the note before due, and for value. The note was executed by defendant December 5, 1884, and delivered to one James Armitage. The note was made payable to R. N. Sims, or bearer 15 months from date. The bond purported to be given by the Crawford, Henry, and Williams County Bohemian Oat Association, and signed by their superintendent, O. H. Brassington. No time was assigned in which the bond was to be performed, but it provided that the note given by defendant would not be called for until 100 bushels of Bohemian oats were sold by the association for defendant at $10 per bushel. Armitage sold the note about one month after its date to Frederick Sims for $180 cash. Frederick Sims is a brother of the payee named in the note. Frederick Sims sold it to plaintiff about January 3 or 4 1886, two months before it fell due for $192 cash. The defendant claimed that both Frederick Sims and the plaintiff had notice and knowledge of how this note was obtained, and of the bond executed at the same time. The defendant testified that he first talked about taking the oats with R N. Sims, afterwards with R. N. Sims and Armitage together but he completed the arrangement with Armitage, who drew up the note and filled out the bond. R. N. Sims was to deliver the oats,-20 bushels. The oats were delivered to him. Afterwards he took 10 bushels more of the oats, and the bond, which was first drawn agreeing to sell 60 bushels for him, was changed to 100 bushels, by Armitage. At that time defendant gave another note for $100. No one ever offered to sell any oats for him. Armitage represented to him that the association had an office at Napoleon, Ohio, where it was located, and had its headquarters. He represented it to be an incorporated company, and perfectly reliable, having $150,000 deposited in a bank there. Subsequently defendant went to Napoleon, and found the association had no general office there where they did business. He testified that he was influenced to go into this transaction by the fact that R. N. Sims told him that he had bought the oats the year before, and sold the oats he raised, and did well on them. Defendant also testified that he took the oats, and gave his note, because he supposed the association would perform their agreement, and sell the 100 bushels of oats for him at $10 per bushel. Testimony was also given tending to show that no such association was incorporated in Ohio. The defendant introduced considerable evidence of other transactions similar to his own, where notes were procured from others by Armitage and one Warner, who was connected with him, and similar bonds given back to the makers of the notes, and that all these notes were sold before due, and without reference to the agreement in the bonds, which was never fulfilled. It was shown that several of these notes were so purchased by Fred Sims, and also by the the plaintiff, Mace. It was sought to be inferred from these purchases of Sims and plaintiff, that they knew of the fraud, and were participating in it. Testimony was also given in one instance that Fred Sims was in the room when the note and bond were executed. The note in that case was made payable to one Alex McCabe or bearer, but it was delivered to Warner, who passed it over, while in the room, to Fred Sims, who then paid $50 to Warner upon it. The bond was read while Sims was present. There was some other evidence tending to show that Fred Sims and Mace were both acquainted with the business that Armitage and Warner were engaged in, and knew these notes, including the one in suit, were given for Bohemian oats. Fred Sims was sworn as a witness on the behalf of the plaintiff, and testified that at the time he bought this note made by the defendant and at the time he sold it to plaintiff he did not know of any charge of fraud in connection with these notes, in any shape or manner; that he purchased and sold it in perfect good faith. The plaintiff also testified that he bought the note in good faith, paying $192 in cash for it; and that he never saw the bond until the day of the trial of this suit in justice court, when the case was commenced. He admitted buying five or six of these notes of Fred Sims, and it also appears from his own testimony, clearly enough, that he knew the note in suit was given for Bohemian oats. The plaintiff had judgment in the court below for the full amount of the note and interest, and the defendant brings error. There are 18 assignments in relation to the admission or rejection of testimony upon the trial, but several of them were formally waived upon the argument.

Upon the cross-examination of the defendant, and also of one Hawley, who had given a note under similar circumstances as the defendant, these questions were asked respectively: "Now will you tell me just where the fraud is?" and "Whereabouts was the fraud?" Both of these witnesses were claiming fraud in the obtaining of their notes, and had given evidence upon the direct examination of the circumstances of the transaction. After being cross-examined upon the facts occurring at the time the notes and bonds were made, and the non-performance of the agreement in the bond, they were asked, in effect, by these questions, to specifically point out the circumstances or facts which constituted the fraud claimed. The object of these questions may have been to bring out by their answers the real motive which actuated them in giving the notes, the fact or promise which they relied upon, and which was the inducement to the making of the notes. The objection to the question is that it called upon the witness to draw a conclusion from the facts. We do not think the question open to this objection. The witness was not asked to give his opinion upon the facts, but to state what facts operated upon his mind and produced the fraud,-in what part of the transaction and by what acts he was misled and defrauded. We cannot see what possible harm could result to the defendant by this inquiry. Under the theory of the defendant as before stated, that this was a preconcerted swindle, and that several men were engaged in it, who, as soon as possible after procuring the notes, put them into the hands of third persons, and that among these third parties were Fred Sims and the plaintiff, he introduced testimony of one Denison, who had given a similar note to defendants, which note was found, before due, in the hands of one Elisha Baker. The theory of the defendant, upon the trial, as tending to implicate Sims and plaintiff in the fraud, was broad enough to also cast suspicion upon all persons in whose possession the notes were found before due. Plaintiff's counsel, on cross-examination, inquired of the witness as follows: " Question. Elisha Baker (referring to one to whom the note given by witness had been transferred) is an old citizen there in Morenci, and has lived there a good many years? Answer. Yes, sir. Q. You have known him a good many years? A. Yes, sir. Q. Ever since you were a boy? A. Yes, sir. Q. He is a very reputable old gentleman, is he not? A. I have considered him so. Q. He is a moneyed man, and buys notes? A. Yes, sir. Q. And makes that his business? A. Yes, sir." To which testimony so given counsel for the defendant objected as incompetent and immaterial, and moved to strike it out. The motion was overruled by the court, and defendant excepted.

The plaintiff's counsel claims that when the defendant was permitted to show the fraudulent character of notes obtained by Armitage and Warner from others than himself, and the passing of such notes into the hands of third parties, before due, and some of them into the hands of Sims and the plaintiff, for the purpose of establishing bad faith on the part of Sims and plaintiff, that the bad faith of other parties who bought such notes was also involved; and that where a witness for the defendant, under this theory, named a person as the purchaser of his note, the plaintiff had a right, upon cross-examination, to show that such purchaser was a reputable citizen, and engaged in the business of buying notes generally, to rebut such presumption or claim of bad faith. The trouble with this claim is that such a course of procedure would raise a score or more of collateral inquiries into the reputation and business of persons not parties to the suit, which is not desirable or permissible. The court erred in allowing this cross-examination, and in not striking out the testimony. The theory of the plaintiff was that at the time these notes were purchased by Sims, the plaintiff and others, there was no hint or talk of fraud in the community in...