New First Nat. Bank v. Hogue

• Decision Date: 20 May 1930
• Citation: 28 S.W.2d 117,224 Mo.App. 503
• Parties: NEW FIRST NATIONAL BANK OF PARAGOULD, ARKANSAS, APPELLANT, v. MATTIE L. HOGUE AND PEOPLE'S BANK OF HOLCOMB, HOLCOMB, MISSOURI, RESPONDENTS. [*]
• Court: Missouri Court of Appeals

28 S.W.2d 117

224 Mo.App. 503

NEW FIRST NATIONAL BANK OF PARAGOULD, ARKANSAS, APPELLANT, v. MATTIE L. HOGUE AND PEOPLE'S BANK OF HOLCOMB, HOLCOMB, MISSOURI, RESPONDENTS. ^[*]

Court of Appeals of Missouri, Springfield

May 20, 1930

Appeal from the Circuit Court of Dunklin County.--Hon. W. S.C. Walker, Judge.

AFFIRMED.

Judgment affirmed.

M. P Huddleston and Orville Zimmerman for appellant.

(1) The court erred in refusing appellant's instruction at close of the case, requesting the court to direct a verdict for plaintiff, because: (a) The oral testimony offered by plaintiff shows that Stacey was given credit for the check and that the bank had no knowledge of any fraud or deception on part of Stacey; and the ledger account of bank offered in evidence by defendant, Mattie L. Hogue, and relied upon by her, shows that Stacey checked against the account and was overdrawn on date non-payment was received. (b) The check was duly negotiated by endorsement of payee; was regular on its face and taken for value without notice of any infirmity, and the bank was a holder for value. Sections 817, 838, 813, 971 R. S. 1919. (c) Until the contrary is shown, the holder of a check endorsed in blank is prima facie the owner of it, and he is presumed to have taken it in good faith for value before maturity without notice. Miller v. Bank, 193 Mo. 498, 507; Keim v. Vette, 167 Mo. 389; Horton v. Bayne, 52 Mo. 531; Johnson v. McMury, 72 Mo. 278; Fitzgerald v. Barker, 85 Mo. 13; Mayer v. Robinson, 93 Mo. 122; Ayres v. Bank, 79 Mo. 421, 424-5; Bullene v. Coates, 79 Mo. 426; 3 Ruling Case Law, p. 524, secs. 152-153, note 8. (d) A prima-facie case being made, and no testimony being offered to negative or destroy the prima-facie case made, it was duty of court to grant a directed verdict.

Hal. H. McHaney for respondent.

The court did not err in refusing appellant's instruction No. 1 at close of the case, directing verdict for plaintiff. The allegations in plaintiff's petition were denied and plaintiff had the burden of proof on the whole case. And even though plaintiff may have made a prima-facie case by introduction of check sued on after defendant showed check was obtained without consideration and by fraud the burden of evidence shifted to plaintiff, since by plaintiff's own testimony it is conceded that plaintiff had knowledge at time of the alleged purchase of check that it in fact belonged to Baldwin Piano Co. The evidence by defendant was never overcome, or even placed in equipoise and the case should have been submitted to jury. Sections 841, 845, R. S. 1919; Downs v. Horton, 230 S.W. 109; Guthrie v. Holmes, 272 Mo. 215, 233, 234; Hurch v. R. R., 252 Mo. 39, 158 S.W. 581; Hamilton v. Marks, 63 Mo. 167; Johnson v. McMurray, 72 Mo. 278; Meyer Milling Co. v. Strohfeld, 4 S.W.2d, 866; 1 Daniel on Negotiable Instruments (6 Ed.), sec. 819, p. 979; 3 R. C. L., sec. 245. (2) Whether or not the bank was agent of Stacey and had received check for collection only was matter for determination of jury. The question of whether the check was deposited for collection only is one of intention and agreement between bank and depositor. Mudd v. Bank, 175 Mo.App. 403, 162 S.W. 314. (3) If the check was entered as deposit only as matter of convenience, the bank intending that it should be deposit after collection, the title would not have passed to bank until the collection was made, and respondent had right to stop payment on check. Under conceded testimony the appellant extended credit to its depositor merely as matter of convenience in bookkeeping and as matter of courtesy to depositor which was sufficient to submit this question to jury. Midwest National Bank v. Parker Corn Co., 245 S.W. 217; Midland National Bank v. Brightwell, 148 Mo. 358; Brigance v. Bank of Cooter, 200 S.W. 668; Mudd v. Bank, 175 Mo.App. 403. (4) Stacey had received the check in payment of note belonging to Baldwin Piano Co. and therefore there was no consideration for check in question. Secs. 812, 815, R. S. 1919. (5) The bank had knowledge at time of acceptance of check that Stacey was not entitled to it and that it belonged to Baldwin Piano Co. therefore the appellant cannot be holder in due course. Sections 815, 838, 840, 842 and 844, R. S. 1919; Seehorn v. Bank, 148 Mo. 256.

COX, P. J. Bailey, J., concurs. Smith, J., not sitting.

OPINION

COX, P. J.

Action upon a check drawn by Mattie L. Hogue upon the People's Bank of Holcomb and payable to E. S. Stacey. The verdict and judgment went in favor of defendants and plaintiff appealed. The answer of Mattie L. Hogue alleges that the check sued on was obtained from her by Stacey by fraud and without consideration. That appellant was not a holder in due course, and that plaintiff was not in fact the owner of said check, and also that plaintiff had knowledge of the fact that the check was procured by fraud and was without consideration at the time said check was placed in its hands by Stacey.

At the close of all the evidence the court instructed the jury to find for defendant, People's Bank of Holcomb, and verdict for it was returned accordingly and no exception was taken to that action so that defendant is not in this court. The plaintiff appealed from a judgment in favor of defendant, Mattie L. Hogue.

The general facts in this case are substantially as follows: Mr. E. S. Stacey was a sales agent for the Baldwin Piano Company, and as such sold defendant, Mattie L. Hogue, a piano and took from her a note for $ 400 payable to the piano company for the balance of the purchase price. A short time before this note came due, Stacey came to the home of Mrs. Hogue and spoke of being hard up and wanted to sell her a note on another party. Mrs. Hogue then concluded that as her note was almost due, she would make a payment on it and asked Stacey to whom she should make the check payable and he said to make it payable to him and she then gave him her check on the People's Bank of Holcomb for $ 331.60 payable to him. She later learned that he did not have authority to collect her note to the piano company and she then stopped payment on the check. Other facts will be noted later.

There are two assignments of error as follows:

"(1) The court erred in refusing appellant's requested instruction at the close of all the evidence for a directed verdict.

"(2) The court erred in giving instruction 4 for defendant Mattie L. Hogue."

The demurrer to defendant's evidence is based on the contention that the evidence shows without contradiction that plaintiff received the check from Stacey and gave him credit on his account at the bank and permitted him to check against it and by doing so, the plaintiff bank became a holder in due course. If the evidence showed those facts and nothing more and there was no evidence to the contrary, we think that position would be sound. The holder of a negotiable instrument, in the absence of any proof at all, is prima-facie, the holder in due course, but when it is shown that the instrument was procured by fraud in the first instance, that prima facie case is dispelled until proof is offered by the holder to show that it was procured by him for value before maturity and in ignorance of any defect in the title. When that is done and no evidence to contradict it appears, then the prima-facie case of the holder becomes conclusive. [ Baade v. Cramer, 278 Mo. 516, 526, 213 S.W. 121.] And where that condition of the evidence is present we think a directed verdict for the holder should be given, but that is not the case here. Plaintiff's cashier testified on behalf of plaintiff that E. S. Stacey was a depositor in plaintiff bank. That he presented the check in question to the bank which received it and placed the amount of it to the credit of Stacey. The bank then sent it through the usual channel for collection and when it...