Matteson v. Trask

• Decision Date: 17 April 1922
• Docket Number: 4715.
• Citation: 206 P. 428,63 Mont. 160
• Parties: MATTESON v. TRASK.
• Court: Montana Supreme Court

206 P. 428

63 Mont. 160

MATTESON v. TRASK.

No. 4715.

Supreme Court of Montana

April 17, 1922

Appeal from District Court, Yellowstone County; S. C. Spencer Judge.

Action by C. E. Matteson against M. F. Trask. From judgment for plaintiff and an order denying a new trial, defendant appeals. Reversed and remanded.

Wm. V Beers, of Billings, for appellant.

Guy C Derry, of Billings, for respondent.

HOLLOWAY J.

It is alleged in the complaint in this action that on November 19 1918, defendant drew his check upon the American National Bank of Helena for $200, payable to the order of Peter Herzog, and on the same day delivered it to the payee; that Herzog indorsed the check to plaintiff; that plaintiff caused it to be presented for payment promptly; that payment was refused by direction of the drawer; and that the check has never been paid. The answer admits the execution and delivery of the check, and that it was duly presented for payment; that it has not been paid; and that defendant stopped payment upon it. By way of special defense, it is alleged that the check was procured by Herzog through fraud--the facts constituting the fraud being set forth at length--and that, if it was transferred to plaintiff, it was accepted by him with full knowledge of the fraud.

In his reply, plaintiff denied that he had any knowledge or information sufficient to form a belief as to the truth of the allegations of fraud, and otherwise denied generally the allegations of new matter contained in the answer.

Upon the trial plaintiff identified the check, and testified that Herzog indorsed it to him on November 20, 1918. The check was then introduced in evidence, and plaintiff rested. Defendant testified to the facts which tended to establish the fraud pleaded in the answer, and rested. In rebuttal plaintiff testified, over objection, that at the time he received the check from Herzog he did not have any knowledge of the fraud, and that he did not know for what purpose the check had been issued. This constitutes a synopsis of all the evidence.

The court gave instruction 2 at the request of defendant and instruction 3 at the instance of the plaintiff. Those instructions follow:

"(2) The court instructs the jury that after it has been shown that fraud or deceit was practiced upon the maker of a negotiable instrument at its inception, the burden of proof is then cast upon the holder of such instrument to show that he is a bona fide holder of such instrument, for value, and without notice of the defects.

(3) You are instructed that the defendant by making the check in question engaged to pay it according to its terms, and admitted the existence of the payee and the capacity of the payee to indorse the check to the plaintiff, and if you find that plaintiff came into possession of said check in due course of business without knowledge of any defects in the title of the indorser whether there was such defect or not, then your verdict should be for the plaintiff for the full amount prayed for in the complaint."

A verdict was returned in favor of the plaintiff for the amount of the check, with interest thereon, and from the judgment which followed and from an order denying a new trial defendant appealed.

1. The complaint does not state facts sufficient to constitute a cause of action. It is not alleged that plaintiff was either the owner or holder of the check at the time this action was commenced, which was more than two months after the check was issued. J. I. Case Threshing M. Co. v. Simpson, 54 Mont. 316, 170 P. 12.

2. The evidence does not support the verdict. Plaintiff made out a prima facie case by identifying the check, introducing it in evidence, and proving that it was indorsed to him on the day after it was issued; but when defendant produced evidence tending fairly to prove that Herzog obtained the check through fraud, the burden then shifted to plaintiff, and it became incumbent upon him to show by a preponderance of the evidence that he was a holder in due course. Section 8466, R. C. M. 1921 (N. I. L. § 59), provides:

"Every holder is deemed prima facie to be a holder in due course; but when it is shown that the title of any person who has negotiated the instrument was defective, the burden is on the holder to prove that he or some

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