McDonald Manuf'g Co. v. Thomas

• Decision Date: 26 April 1880
• Citation: 5 N.W. 737,53 Iowa 558
• Parties: MCDONALD MANUF'G CO. v. THOMAS.
• Court: Iowa Supreme Court

53 Iowa 558

5 N.W. 737

MCDONALD MANUF'G CO.

v.THOMAS.

Supreme Court of Iowa.

Filed April 26, 1880.

Appeal from Franklin circuit court.

Action by plaintiff, as a corporation, upon the promissory notes given for a threshing machine. The notes were executed to a corporation known as the Fond du Lac Threshing Machine Company, and sold by that company to the plaintiff for value before maturity. The defendant, for answer, avers that the machine for which the notes were given was sold to him by the Fond du Lac Threshing Machine Company, with a warranty; that it was wholly worthless, all which was known to the plaintiff at the time it purchased the notes.

There was a trial by jury, and verdict and judgment were rendered for the defendant. The plaintiff appeals.McKenzie & Hemenway, for appellant.

King & Henley, for appellee.

ADAMS, C. J.

1. The defendant at the time he purchased the machine made a cash payment. The evidence showed that the machine was defective and not worth more than the amount paid. Whether the plaintiff at the time of its purchase knew it was defective is one of the principal questions in the case. To show that the plaintiff did know it, the defendant introduced as a witness one McDonald, who was president and stockholder of the Fond du Lac company from its organization until the sale to plaintiff of the notes in question, and was at the time of the trial vice president and stockholder of the plaintiff company. He was asked an interrogatory in these words: “State whether or not the Fond du Lac Threshing Machine Company did not manufacture a lot of poor machines, that broke and gave trouble to the company.” To this question the plaintiff objected, but the objection was overruled and the witness answered: “The company made a few machines that the parties that purchased them claimed did not work well; while machines manufactured in the same manner, sold to other parties, gave good satisfaction. Of course, in those cases where the machine was said not to work well, it gave the company more or less trouble.” The defendant's theory is that if the plaintiff's vice president had knowledge that the machine for which the notes were given was defective, the plaintiff must be deemed, through him, to have knowledge also.

Whether in any case a corporation can be charged with having knowledge by reason of the knowledge which its vice president had pertaining to, and at the time of, a given transaction, without showing that he was charged with some duty or responsibility in regard to the transaction, we need not determine. We see nothing to show that McDonald was vice president or even member of the plaintiff company at the time it purchased the notes in question. Besides, it appears to us that McDonald's knowledge, if any, that the Fond du...