State Bank of Chicago v. Oyloe Piano Co.
| Decision Date | 12 May 1923 |
| Docket Number | 35175 |
| Citation | 193 N.W. 403,195 Iowa 1152 |
| Parties | STATE BANK OF CHICAGO, Appellant, v. OYLOE PIANO COMPANY, Appellee |
| Court | Iowa Supreme Court |
Appeal from Winneshiek District Court.--W. J. SPRINGER, Judge.
ACTION at law, to recover upon trade acceptances. Trial to a jury. Verdict and judgment for defendant. Plaintiff appeals.
Affirmed.
C. N Houck and H. F. Barthell, for appellant.
E. W Cutting and W. M. Allen, for appellee.
On June 13, 1918, the defendant, being engaged as a dealer in pianos at the town of Ossian, Iowa, was solicited by an agent of the Morenus Piano Company, a manufacturer and dealer in such instruments at Chicago, Illinois, for an order for the purchase of pianos. Terms were agreed upon, and defendant ordered and the Morenus Company undertook to furnish plaintiff six pianos, one to be delivered immediately, and the remainder in September following, at the aggregate price of $ 840. In consideration of this undertaking, the parties executed three drafts or trade acceptances, in the following form:
Morenus Piano Company.
The other two acceptances are identical in form, except in being made to mature respectively in four and five months. Across the face of each instrument are written the words:
On October 19, 1918, the plaintiff bank, claiming to be a holder in due course, brought this action, to enforce collection. Answering the claim so made, the defendant, while admitting his signature upon these papers, alleges that the execution and delivery thereof were obtained by fraud. He alleges that, at the time of said transaction, the Morenus Company had already failed and ceased to manufacture pianos, and neither had nor was able to furnish the pianos ordered, and never did in any manner fill or comply with said order or furnish the agreed consideration; and that the procurement from him of the said order and the making of said acceptances were a scheme whereby to perpetrate a fraud upon him. He further denies that plaintiff is a good-faith holder in due course of the instruments sued upon, and alleges, in substance, not only that they were obtained by fraud, but that they were made and delivered subject to the condition that they were not to become effective until the order for the pianos was filled. The officers of the plaintiff bank assert and testify that they took the said acceptances in good faith, and without notice or knowledge of any defense thereto, and for a valuable consideration. The question whether the paper was tainted by fraud in its inception, and if so, then whether the plaintiff was, nevertheless, a good-faith holder, was submitted to the jury, and, as we have seen, the verdict was for defendant.
I. The leading, if not the principal, contention of the appellant is that defendant made no such showing of fraud or defect in the title to the paper as serves to cast upon plaintiff the burden of proving its status as a holder in due course. To this we cannot agree. Confessedly, Morenus had ceased the manufacture of pianos early in April, before the date of this deal in June, 1918, and never did fill the defendant's order, and, indeed, is not shown to have been able to fill it. It was competent, we think, for the jury to find from the evidence that he was then in a failing...
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