National Bank v. Romine

• Citation: 117 S.W. 104,136 Mo. App. 57
• Parties: NATIONAL BANK OF ROLLA v. ROMINE et al.
• Decision Date: 09 March 1909
• Court: Court of Appeal of Missouri (US)

117 S.W. 104

136 Mo. App. 57

NATIONAL BANK OF ROLLA v. ROMINE et al.

St. Louis Court of Appeals. Missouri.

March 9, 1909.

Rehearing Denied March 23, 1909.

1. BILLS AND NOTES (§ 370) — BONA FIDE PURCHASER — DEFENSES — WANT OF CONSIDERATION.

Want of consideration is not available as a defense to a note as against a bona fide purchaser for value before maturity.

2. BILLS AND NOTES (§ 493) — WANT OF CONSIDERATION — BURDEN OF PROOF.

As against the purchaser of a note before maturity, the makers are bound to show by the greater weight of evidence a want of consideration for the note, as well as knowledge, on the purchaser's part before purchase.

3. BILLS AND NOTES (§ 497) — BONA FIDE PURCHASER — FRAUD — BURDEN OF PROOF.

An instruction that if plaintiff purchased the note in suit before maturity, in good faith, for a valuable consideration, and without knowledge of any fraud in its inception, plaintiff could recover, but that the burden was on plaintiff to establish by the greater weight of evidence that it purchased for a valuable consideration and without knowledge of the fraud, was proper.

4. BILLS AND NOTES (§ 538) — INSTRUCTIONS — "KNOWLEDGE."

In an action by an alleged bona fide purchaser of a note claimed to have been without consideration and fraudulently obtained, an instruction that the word "knowledge" as applied to plaintiff with reference to the defenses meant information of the facts constituting a fraud or failure of consideration, if any, and not information from which a prudent man might be

expected to investigate and ascertain whether there was any fraud or failure of consideration in the transaction or not, and that such information must be as to some material fact constituting fraud or failure of consideration, but that it does not mean that the purchaser must himself know that the facts are true, it being sufficient if he is informed that any such fact existed, was misleading and erroneous for, while notice of want of consideration or fraud will not be imputed because the purchaser was apprised of facts which would put a prudent man on inquiry, it was not essential that the purchaser's knowledge be proved by direct testimony, circumstances sufficient to warrant a finding of knowledge being sufficient.

Appeal from Circuit Court, Phelps County; Leigh B. Woodside, Judge.

Action by the National Bank of Rolla against W. T. Romine and others. Judgment for defendants, and plaintiff appeals. Reversed and remanded.

Farris & Clymer, for appellant. Watson & Holmes, for respondents.

GOODE, J.

Action on a promissory note by an indorsee. The note was executed by respondents, who are husband and wife, March 22, 1905, payable September 15, 1905, to the order of C. A. Post, for $120, with interest from maturity at 8 per cent. The answer says the note in suit and another like it were procured from respondents by the fraud of Post the payee, were without consideration, and were purchased for appellant by its cashier when he knew both facts, viz., that the notes had been obtained by fraud and were without consideration. Evidence in favor of both appellant and respondents was introduced on these issues, and one witness swore he told appellant's cashier when the latter was considering the purchase of the note that he ought not to buy it, for it was a bare-faced steal. There is other evidence tending to prove bad faith in appellant.

The disposition of the appeal turns on the rulings of the court in instructing the jury, principally on the accuracy of this instruction: "The word `knowledge,' as used in these instructions, means information of the facts constituting the fraud or failure of consideration, if any. It does not mean information of facts from which a prudent man might be expected to investigate and ascertain whether there was any fraud in the transaction or not or failure of consideration, but such information must be as to some material fact constituting such fraud or failure of consideration. Upon the other hand, it does not mean that he must of himself know that the facts are true, but, if plaintiff was informed that any such fact did...