Marquand v. Branum

• Decision Date: 17 July 1926
• Docket Number: No. 3787.,3787.
• Citation: 286 S.W. 443
• Parties: MARQUAND et al. v. BRANUM.
• Court: Missouri Court of Appeals

286 S.W. 443

MARQUAND et al. v. BRANUM.

No. 3787.

Springfield Court of Appeals. Missouri.

July 17, 1926.

Rehearing Denied August 31, 1926.

Appeal from Circuit Court, Dunklin County; W. S. C. Walker, Judge.

Action by C. R. Marquand and another against W. P. Branum. Judgment for defendant, and plaintiffs appeal. Reversed and remanded.

Jesse H. Schaper, of Washington, Mo., and James A. Bradley, of Kennett, for appellants. Ely & Ely, of Kennett, for respondent.

COX, P. J.

Action as assignees upon two negotiable promissory notes. Execution of the notes was admitted, and a defense of fraud in their procurement and knowledge thereof by plaintiffs at the time they purchased the notes. Trial by jury resulting in a verdict for defendant. Plaintiffs appealed.

The S. C. Quimby Land Company was a Missouri corporation with headquarters in St. Louis, and owned a large acreage of land in Hidalgo county, Tex. The Texas law does not allow a foreign corporation to own land in that state, so the title to the land was carried in the name of E. A. Mueller in order to evade the provisions of the law of Texas. The agents of the corporation sold defendant 50.69 acres of this land for the price of $13,000. Defendant paid part in cash and gave the notes in suit for the balance. These notes recited that they were given in part payment for certain land in Hidalgo county, Tex., describing it, and reserving a vendor's lien thereon. The fraud relied upon was representations by agents of the seller that the land was very fine land and that the soil was very rich and productive and the land was worth $300 per acre, that similar land in the same locality was then being sold for $300 and upward per acre, and that the corporation was selling this land much cheaper than other land of like character in that locality could be purchased. The proof showed that the land overflowed and was marshy and not productive and not worth to exceed $60 per acre.

There is no contention in this court that the proof did not sustain the charge of fraud in the sale of land for the purchase price for which the notes were given. The plaintiffs seek to recover solely on the ground that they bought the notes in due course for value before maturity and must recover as innocent purchasers.

At the close of the evidence, the plaintiffs asked a peremptory instruction to the jury to find for them. This was refused and is assigned as error. Error is also assigned in instructions given on behalf of defendant.

Appellants contend that the burden of proof was upon defendant to show fraud in procuring the notes, and also that plaintiffs had knowledge thereof or knowledge of such facts as would constitute their act in purchasing the notes one of bad faith on their part. That is a correct statement of the law. Downs v. Horton, 287 Mo. 414, 230 S. W. 103.

Some confusion has arisen in the decided cases by the apparent failure of the courts in some instances to properly distinguish between the burden of proof and the burden of evidence. The burden of proof never shifts, but remains throughout the trial where it is placed in the beginning by the issues to be determined. In actions upon negotiable instruments by an assignee where a defense of fraud and knowledge on part of the holder is made, the burden of proof remains with the maker of the note to prove both fraud in the procurement of the note and such knowledge on the part of the holder as will prevent a recovery upon his part as an innocent purchaser. The burden of evidence may, and usually does, shift to the holder of the note, but the burden of proof never shifts from the maker to the holder. In the trial of such a case, if the execution of the note is admitted, the plaintiff need offer no proof. The burden of proof rests upon the...