Sanley v. Wilkinson
| Decision Date | 16 September 1924 |
| Docket Number | Case Number: 15022 |
| Parties | SANLEY v. WILKINSON. |
| Court | Oklahoma Supreme Court |
¶0 1. Bills and Notes--Bona Fide Purchasers.
Bad faith, not merely notice of circumstance sufficient to put a prudent man upon inquiry, is necessary to defeat the recovery by the purchaser of a negotiable promissory note for value in due course before its maturity.
2. Same--Suspicious Circumstances -- Due Inquiry.
If one contemplating the purchase of a negotiable promissory note before its maturity then has a knowledge which excites his suspicion and leads to inquiry, and he in good faith makes such inquiry of the maker of the note as a reasonably prudent man would ordinarily make under the circumstances, and such maker informs him that the note is valid and will be paid by him at maturity, he may rightfully act on the information thus received, purchase the note and claim the position of a bona fide purchaser.
3. Evidence--Opinion Evidence--Agency -- Failure to Object.
"Evidence that the party is or is not an agent is a mere conclusion, but the witness may state the fact and circumstances concerning the various transactions between him and the alleged principal, leaving the court and the jury to determine under the facts disclosed whether or not he was such agent." Ford Motor Co. v. Livesay, 61 Okla. 231,160 P. 901. However, when such incompetent evidence is admitted without objection, it must be given the same consideration as if it were legal evidence.
4. Same.
In this case S., the plaintiff, denied in his pleadings that M. was his agent, but when S. was testifying as a witness on his own behalf, counsel for the adverse party asked him if M. was his agent and he answered him in the affirmative without making objection thereto. No effort was made by S. or his counsel to have the question and answer stricken from the record. This testimony is the statement of a legal conclusion and is incompetent, but since it was received in evidence by and with the consent of S., it must be given its natural force and effect and it, therefore, constitutes such prima facie proof of agency as to require the submission of that issue to the jury.
Error from District Court, Major County; James B. Cullison, Judge.
Action by Daniel Sanley against J. H. Wilkinson. Judgment for defendant and plaintiff brings error. Reversed and remanded for new trial.
Ernest F. Smith, for plaintiff in error.
John F. Curran and C. B. Wood, for defendant in error.
¶1 This is an action upon three promissory notes begun in the district court of Major county by Daniel Sanley as plaintiff against J. H. Wilkinson as executor of the last will and testament of. J. W. Wilkinson, deceased. The notes were executed by J. W. Wilkinson and were payable to one C. M. Spurlock. They were by him indorsed in blank and transferred to L. F. Messman, who in turn, indorsed same in blank and transferred same to the plaintiff. In his petition the plaintiff pleads that he is an innocent purchaser of the notes in due course before maturity without notice of any defects. The defendant claims that the notes were obtained wholly without consideration and by the fraud of C. M. Spurlock, and denied that plaintiff was an innocent purchaser thereof. The case was tried to a jury, and upon its verdict for the defendant the court rendered its judgment accordingly. Plaintiff appealed.
¶2 In his answer the defendant says "that said J. W. Wilkinson received no consideration for said note; that said notes were given for certain stock represented by the said C. M. Spurlock to be of great value and guaranteed by him to sell within one year for more than double the amount of the notes." Defendant alleges that those representations were false and were made in bad faith by Spurlock, the stock being wholly without value, and were relied upon by the maker of the notes. No other representation or fraud is alleged.
--on lands therein described. The only witness to the representations made by Spurlock to J. W. Wilkinson was J. H. Wilkinson, his son, who as executor is the defendant here. The only testimony he gave on this point is that Spurlock said "that he was selling royalty"; "that he was going to have us millionaires in a short time"; "there was no chance to lose"; "he would sell these units (of royalty) before the time ran out and we would never have to pay a cent down on them at all." There is in the record no evidence of Spurlock making any false representation of an existing fact. There is no testimony that the price was fixed at which Spurlock should resell this royalty nor that he could not have resold same nor did not intend to do so nor that he was ever given permission to do so. There is no evidence that he did not believe that oil would be found on the lease sufficient to make interested parties wealthy, and such a contingency, under the circumstances, is not altogether unusual in the development of "wild-cat" oil territory in Oklahoma. There is no evidence that Spurlock had or claimed to have any scientific information, or other knowledge, of the value of this royalty other than or superior to that possessed by Wilkinson. The assignment shows on its face that the royalty was limited to the rights under the one lease and the lease was then valid and enforceable and the assignment was genuine and just what it purported to be. From the record it appears that Spurlock was the owner and had the right to sell and convey the royalty which he assigned to Wilkinson. At the time of the transfer of this royalty, the lessee in the lease referred to therein had a rig on the leased premises, doing some, but very little, active work in drilling a well for oil or gas, and the lease was then in full force and effect by virtue of an extension of the time to drill therein made by lessee with lessor. The land was in "wild-cat" territory and there had been no development thereon.
¶4 Sometime after the sale of this royalty, the lessee and its assignee abandoned the lease, and upon its expiration the assigned royalty interest thereunder likewise expired. The lessee in the lease named was the Eau Claire Oil & Gas Company, a corporation, of which C. M. Spurlock was secretary and treasurer. At the time this royalty was sold to Wilkinson, one L. F. Messman was not a stockholder, officer, or employe or otherwise connected with it. Spurlock, during his term, was selling similar royalties to others and Messman was buying many of the notes which Spurlock received therefor and negotiating them to his customers and patrons. After all these transactions were had, a partnership was formed by Spurlock, Messman, and one Wyatt, who took over the leases, drilled the well several hundred feet deeper, to a depth of about 1,200 feet, and then abandoned the project, for reasons not disclosed.
¶5 L. F. Messman testified that at the time he purchased these notes from Spurlock he knew they had been...
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...without objection, is to be considered and given weight for all purposes the same as if it were legally admissible. Sanley v. Wilkinson, 107 Okla. 54, 229 P. 574; 64 C. J. 225. ¶5 In view of our harmless error statutes (12 O. S. 1941 §§ 78, 639; 22 O. S. 1941 § 1068), it is the duty of the ......