Metropolitan Discount Co. v. Fondren

• Decision Date: 06 December 1915
• Docket Number: 26
• Citation: 180 S.W. 975,121 Ark. 250
• Parties: METROPOLITAN DISCOUNT COMPANY v. FONDREN
• Court: Arkansas Supreme Court

180 S.W. 975

121 Ark. 250

METROPOLITAN DISCOUNT COMPANY v. FONDREN

No. 26

Supreme Court of Arkansas

December 6, 1915

Appeal from White Circuit Court; J. M. Jackson, Judge; affirmed.

Judgment affirmed.

Ira. J Mack, for appellant.

1. The instrument sued on was a negotiable bill of exchange. 33 Ark 47; 94 Id. 100. It was purchased for value before maturity and appellant was an innocent purchaser. A verdict should have been directed for the plaintiff. 94 Ark. 100; 8 cyc. Law & Proc. p. 233; 166 S.W. 953; 170 Id. 578.

S Brundidge, Jr., and Harry Neelly, for appellees.

Appellant was not an innocent purchaser for value without notice, within the rule. 79 Ark. 149; 86 Id. 201; 90 Id. 97.

OPINION

MCCULLOCH, C. J.

The defendants, Fondren & Moore, merchants at Kensett, Arkansas, purchased a bill of jewelry from the National Novelty Import Company, a corporation doing business at St. Louis. The bill of goods aggregated $ 296, and defendants accepted time drafts drawn on them by the seller. The purchase was covered by a written contract which specified the terms of the sale. The drafts were assigned before maturity to the plaintiff, Metropolitan Discount Company, a corporation doing business at St. Louis, for the purpose, as its name implies, of dealing in commercial paper. This is a suit on one of the said drafts in the sum of $ 59.21. The defense tendered is that the jewelry was worthless and unsalable, having no merchantable value whatever, and that plaintiff was not an innocent purchaser of the negotiable paper representing the purchase price.

The testimony of the defendants tends to establish the fact that the jewelry was worthless and unsalable, and that they offered to return it. That constituted a defense against the paper while in the hands of the original holder. Main v. Dearing, 73 Ark. 470, 84 S.W. 640. There is no contention here that the evidence was insufficient to warrant a finding in favor of defendants on that issue. The case was submitted to a jury and it becomes our duty to uphold the verdict if there was evidence legally sufficient to sustain it.

The contention is that according to the undisputed evidence the plaintiff was an innocent purchaser of the paper for a valuable consideration. The burden was upon the plaintiff, of course, to show that it paid value for the paper, and then the burden shifted to the defendants to show that plaintiff purchased with notice of defects or such information as would put the purchaser upon notice. Tabor v Merchants' National Bank, 48 Ark. 454, 3 S.W. 805; Arkansas National Bank v. Martin, 110 Ark. 578, 163 S.W. 795. The plaintiff introduced two witnesses, one the manager of the National Novelty Import Company and the other the manager of the plaintiff company. The testimony of both of those witnesses tended to show that the paper which forms the basis of this suit was sold to plaintiff in good faith and for value received without any information as to any defenses against it. The testimony of each of the witnesses shows that the two corporations were entirely independent of each other, and that the two corporations had no stockholders or officers in common. There are circumstances, however, connected with the transaction which we think made it a question...