Terry v. Hickman

• Decision Date: 14 February 1876
• Parties: JOHN H. TERRY, Respondent, v. WILLIAM T. HICKMAN et al., Appellants.
• Court: Missouri Court of Appeals

1 Mo.App. 119

JOHN H. TERRY, Respondent,

v.WILLIAM T. HICKMAN et al., Appellants.

St. Louis Court of Appeals, Missouri.

Feb. 14, 1876.

Defendant executed his negotiable promissory note to an insurance company for a policy which he afterwards ascertained to be fraudulent and worthless. Plaintiff purchased the note, before maturity, for less than half its face value. Whether plaintiff had notice of the alleged fraud, and whether he purchased the note for cash, or took it as collateral for an antecedent debt, were questions in dispute. Held, 1. It was competent for the defendant to show that the insurance company had no real capital. 2. If two or more facts are necessary to establish a certain conclusion, the court may, in its discretion, direct the order in which such facts are to be presented by the testimony. 3. The refusal of an instruction which is unimpeachable in its application to the evidence is not error, when an instruction properly commenting on the evidence has already been given. 4. No harm was done the plaintiff's case by the exclusion from evidence of the company's certificate of incorporation, when the note made payable to it was in evidence for another purpose. 5. The giving of instructions, when not assigned below as a reason for a new trial, cannot be urged for error in the appellate court.

Appeal from St. Louis Circuit Court.

General term reversed; special term affirmed.

E. B. Sherzer, for appellant, cited: Brady v. Connelly, 52 Mo. 19, 20; Curtis v. Curtis, 54 Mo. 351, 352; Carver et al. v. Thornhill, 53 Mo. 283, 285, 286; Musgrave et al. v. Ausmus et al., 51 Mo. 561, 568; Saxton et al. v. Allen, 49 Mo. 417, 418; Develin v. Clark, 31 Mo. 22, 24; Byles on Bills (Sharswood's ed.), 187, 189, note 1; Develin v. Clark, 31 Mo. 22, 23; Hamilton v. Marks et al., 52 Mo. 78, 80, 81; Parvin v. Noyes, 39 Me. 384, 386; Munroe v. Cooper, 5 Pick. (Mass.) 412, 413, 414; Hunt v. Sandford, 6 Yerg. (Tenn.) 387, 392, 393; Story on Prom. Notes (7th ed.), secs. 186, 196; State ex rel. v. Saline County Court, 45 Mo. 242, 249; Henderson v. Bondurant, 39 Mo. 369, 373, 374; Smith v. Lac County, 11 Wall. 139, 147; Grued v. Stevens, 43 Vt. 125, 128, 129; Roberts v. Hall, 37 Conn. 205, 1212; Harris v. Hays, 53 Mo. 90, 96; Clements v. Maloney, 55 Mo. 352, 358, 359; Sears v. Wall et al., 49 Mo. 359, 360; Hurp v. Salisbury, 55 Mo. 310, 313, 314; Bailey v. Smith, 14 Ohio (N. S.), 396; Story on Prom. Notes (7th ed.), sec. 183; Martin et al. v. Smylee, 55 Mo. 577, 578; Bauer v. Franklin County, 51 Mo. 205, 206.

T. A. Russell, for respondents, cited: Horton v. Boyne, 52 Mo. 531; Greer v. Yosti, 56 Mo. 307; Bennet v. Torlina, 56 Mo. 309; Corby v. Butler, 55 Mo. 398; Merrick v. Phillips, 58 Mo. 436; Story Eq. Jur., sec. 199 (11th ed.); Holland v. Anderson, 38 Mo. 55.

GANTT, P. J., delivered the opinion of the court.

Hickman executed to the National Insurance Company his negotiable promissory note for $203.95, dated December 1, 1867, and payable in two years thereafter. Before maturity this note was assigned to plaintiff for $100. The note being unpaid, plaintiff sued. Hickman answered that the note was given as a premium for a policy which the National Insurance Company induced him to take out by fraudulently representing to defendant that the company was solvent and reliable, whereas it was nothing but a cheat, and its business was carried on for the mere purpose of swindling those who insured in it; that when the note was transferred to plaintiff he had full knowledge of the fraudulent nature of the note. By his reply, plaintiff claimed to be an innocent holder for value without notice. There was a trial, and the jury found for the defendant. On appeal to the general term the judgment was reversed, and defendant appealed to this court.

At the special term the only reasons assigned for a new trial were that--

1. The verdict was against law and evidence.

2. Because the court refused plaintiff's instructions.

3. Because the court admitted improper evidence on the part of defendant.

4. Because the court excluded proper evidence on the part of plaintiff.

The instructions refused were the following:

1. The jury are instructed that, in law, a valuable consideration is any moneyed [money] consideration, and, to be valuable, need not be of the marketable value of the note.

2. If the jury believe from the evidence that the plaintiff took the note sued on for a valuable consideration, without any notice of any fraud upon the part of the National Insurance Company, they will find for the plaintiff.

3. If the jury believe from the evidence that the defendant Hickman made and delivered the note in question to the National Insurance Company, and that the National Insurance Company, before the maturity thereof, transferred said note to the plaintiff for a valuable consideration, then they will find for the plaintiff, unless they believe that the plaintiff, at the time he took the note, knew that it was procured by fraud.

4. The jury are instructed that the note sued on is, by its terms, negotiable, and although they may find that the National Insurance Company procured it by fraud, yet, if the note came into the hands of the plaintiff, Terry, without any notice of such fraud, and that he paid a valuable consideration therefor, they will find for the plaintiff.

The following were given:

For the defendant: If the jury believe from the evidence that the consideration of the note sued on was the making by the National Insurance Company of a policy of insurance to defendant, and that, prior to the receipt of such policy and the execution of said note by defendant, the officers and agents of said insurance company falsely and fraudulently represented to defendant that said company was a good and solvent company, and that defendant, relying solely upon said false and fraudulent representations, accepted said policy and executed said note, and that said note was afterwards assigned by the company to plaintiff, and plaintiff, at the time of the said assignment, knew, or by the exercise of ordinary prudence might have known, how said note was obtained and the consideration therefor, then, although they may further believe from the evidence that said note was assigned to plaintiff before its maturity and for value, they will find a verdict for defendant.

For the plaintiff: 1. The court instructs the jury that the burden of showing that the plaintiff is not the bona fide holder of the note sued upon, on account of fraud in the taking and transfer of the same, is upon the defendant; and that such fraud is not to be presumed, but must be established by competent evidence; and, unless the jury find that Terry knew, or had grounds to believe, at the time of the purchase of the note, that it was obtained by fraud, they will find for the plaintiff, if they find that under the evidence and instructions he has proved himself the owner thereof.

2. The jury are instructed that if they believe from the evidence that the plaintiff acquired the note in question for a valuable consideration, then he can maintain this action without any written assignment.

The errors assigned by respondent in respect of the action of the court at special term are:

1. That the court refused to admit the certificate of incorporation of the National Insurance Company.

2. That it erred in admitting evidence of the amount of the capital stock of the National Insurance Company.

3. That it erred in admitting evidence of fraud and want of consideration, before giving evidence of notice of these to plaintiff.

4. In refusing plaintiff's instructions.

5. In giving defendant's instructions.

The evidence that the company was a bubble, from the first, was tolerably full, and the evidence tended to show that, when the note was assigned, its reputation for insolvency and fraud was general. This, however, is denied by the witnesses of plaintiff. The evidence as to the price given for the note was conflicting. It was admitted that the amount of it was $100; but whether it was for money paid, or in compensation for services rendered by plaintiff in his professional capacity, was not clear. He deposed to the first. Mr. Stone, a witness for defendant, deposed that plaintiff had told him, in the spring of 1868, that he received the note in part...