Reitherman v. Wheeler
| Decision Date | 29 January 1923 |
| Docket Number | No. 14623.,14623. |
| Parties | REITHERMAN v. WHEELER et al. |
| Court | Missouri Court of Appeals |
Appeal from Circuit Court, Jackson County; Thomas B. Buckner, Judge.
"Not to be officially published."
Action by Philip Reitherman against Gordon Wheeler and another. From judgment for plaintiff, defendants appeal. Affirmed.
John B. Young, of Kansas City, for appellants.
Burr S. Stottle, of Kansas City, for respondent.
This is an action on a promissory note in the sum of $325, dated Kansas City, Mo., September 16, 1919, payable six months after date to the order of M. Anderman and signed by the defendants. The note bears the indorsement, "Continental Audit Company." At the close of the testimony the court instructed the jury to find for plaintiff, resulting in a verdict, and judgment in favor of plaintiff in the sum of $358.72. Defendants have appealed.
The answer consists of a general denial and allegations that plaintiff was doing business in this state under the assumed or fictitious name of the "Continental Audit Company," in violation of the laws of Missouri; that the Continental Audit Company was a foreign corporation, organized under the laws of the state of Colorado, and had been authorized to do business in the state of Missouri, but its right to do business in this state had been terminated, and it could not maintain an action directly or indirectly in this state; that M. Anderman did not indorse, and deliver said note before maturity to any one for value; that the Continental Audit Company did not indorse and deliver said note to any one for value; that the note is now the property of either M. Anderman or the Continental Audit Company, and, if the property of plaintiff, it was purchased after maturity, and there was no consideration given for said, note; that said note was given in payment for a team of horses purchased from M. Anderman through her agent, and that said agent fraudulently represented said team to be in sound health, gentle, and well broken for farming purposes; that said agent of M. Anderman warranted said team to be sound and free from disease, gentle, and well broken for farming purposes; that said team was not sound and free from disease and not gentle, and was wholly unfit for farming purposes, all of which was discovered by defendants after the execution of the note; that, M Anderman refusing to rescind the sale, the team was sold at the Kansas City Stockyards for $200. Defendants asked credit on the note for the difference between its face and the amount the team brought, plus certain expenses.
The undisputed facts show that the note was bought from M. Anderman through her husband and agent, Leo Anderman, by plaintiff on February 23, 1919; that the note was paid for by plaintiff's giving M. Anderman on said date a check for $334.35, which check was not cashed until 35 days thereafter; that at the time plaintiff acquired the note he did not know of any defect in its title such as Is pleaded in defendants' answer; that he was not acquainted with the makers of the note, hat he had known Mr. Anderman for about 10 years, and the latter had asked plaintiff to do him a favor and purchase the note; that plaintiff asked Anderman whether the makers of the note were good, and, the latter's reply being in the affirmative, plaintiff purchased it; that he paid $9.75 more than the amount due on the note, for the reason that he thought that it bore interest from date; that plaintiff had bought out the business of the Continental Audit Company, and was doing business in Kansas City under that name, and was the sole owner of the business done under that name, and that such business was not incorporated. The note fell due on March 16, 1919. Defendants refused to pay the same upon demand being made for its payment, resulting in this suit.
Defendants contend that the court erred in peremptorily instructing the jury to find for plaintiff for the reason that there was evidence introduced on the part of defendants tending to show the matters pleaded in the answer concerning the false representations and warranties in regard to the quality of the team of horses. The rule of law in regard to the burden of proof in matters of this kind is that this burden is upon the holder of the note to prove his good faith and lack of notice of any defect in the title of the person negotiating the note to him, when such Infirmity has been shown In the procuring of the note from the maker. If the holder shows this, then the burden is upon the defendants to prove specific facts tending to show plaintiff's actual knowledge of the defect in the title or his bad faith. In case of defendants' failure to offer any evidence to that effect plaintiff is entitled to a directed verdict. Mere suspicious facts, or facts that would put a reasonable man on inquiry, or negligence, is not sufficient to charge the purchaser of the note with notice of its infirmity. Actual knowledge of the facts concerning the execution of the note must be brought home to the holder. Nothing short of actual knowledge or bad faith will defeat the holder's title. Bank of Hale v. Linneman (Mo. App.) 235 S. W. 178; Downs v. Horton, 287 Mo. 414, 230 S. W. 103. Plaintiff having shown lack of knowledge of the matters pleaded in the answer concerning the sale of the team, the burden was upon the defendants to show plaintiff's knowledge of the defects in the title or his bad faith, which we think they have wholly failed to show.. The court, therefore, properly directed a verdict for plaintiff.
There are a number of circumstances shown in the record which d...
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