Union Inv. Co. v. Rosenzweig

• Decision Date: 08 April 1914
• Citation: 139 P. 874,79 Wash. 112
• Parties: UNION INV. CO. v. ROSENZWEIG et al.
• Court: Washington Supreme Court

139 P. 874

79 Wash. 112

UNION INV. CO. v. ROSENZWEIG et al.

Supreme Court of Washington

April 8, 1914

Department 2. Appeal from Superior Court, Franklin County; O. R Holcomb, Judge.

Action by the Union Investment Company against H. J. Rosenzweig and others. From a judgment on a verdict for defendants plaintiff appeals. Affirmed.

Driscoll & Leonard, of Pasco, for appellant.

H. B Noland, of Tacoma, for respondents.

FULLERTON J.

This action was brought by the appellant against the respondents to recover on a promissory note. In its complaint the appellant alleged that the note had been made and delivered by the respondents to McLaughlin Bros., a partnership, and by the McLaughlin Bros. indorsed and delivered to it for value before maturity, and that it was a holder thereof in due course. The answer was a denial of the allegations of the complaint, and an affirmative plea of fraud in the procurement of the note, failure of consideration, and knowledge on the part of the appellant of the circumstances under which the note was procured by their indorser. The answer also contained an affirmative plea to the effect that the indorsement and transfer of the note from McLaughlin Bros. to the appellant was made in pursuance of a conspiracy entered into between them which had for its purpose the giving of the transaction an appearance of good faith and thereby prevent defenses to an action brought to recover on the note which would prove fatal if sued upon by the original holders. The reply was a general denial of the new matter in the answer. At the trial, which was had before a jury, at the conclusion of the evidence the appellant moved that the jury be discharged, and that it have judgment in its favor, on the ground that the evidence showed conclusively that the note had been indorsed and transferred to it for value before maturity, and that there was nothing to impugn its good faith in the transaction. The court overruled the motion, and submitted the cause to the jury, which returned a verdict in favor of the respondents, on which judgment was afterwards entered.

There was abundant evidence in the record from which the jury were warranted in finding fraud in the procurement of the note and want of consideration. The note was given as part of the purchase price of a stallion which the respondents desired for breeding purposes. The horse proved to be afflicted with an incurable infectious disease, which not only rendered him inefficient as a foal-getter, but dangerous to the mares which were bred to him. Indeed, it was shown that some five of the mares took the disease from him, one of which died from its effects. The evidence also justifies the conclusion that the McLaughlin Bros. had knowledge of the condition of the horse at the time they delivered him to the respondents. He then had a fresh scab upon his leg which was accounted for by the explanation that he had been injured while in transportation. In the spring, however, when the horse was put to service, the wound developed into a running sore, and similar sores broke out elsewhere on his body. A veterinarian described his affliction as a well-known disease which remained quiescent during cold weather, but which developed in warm weather, and particularly in the breeding season, rendering the horse entirely unfit for breeding purposes. He gave it as his opinion, also, that the particular wound visible at the time of the delivery of the horse had been cauterized so as to conceal its true nature by giving it the appearance of an ordinary abrasion of the skin. By the terms of the warranty given with the horse the vendors had agreed that, if the horse did not comply with the warranty, they would replace him with 'another stallion of the same breed and price' on the return of the horse to them at their stables in Minneapolis, Minn. This horse, after discovery of his defects, was so returned, and another one, selected by the vendors without consultation with the vendees, delivered in his place. This horse proved but little better than the first one. He was not of the same breed as the first. He proved to be so vicious in temper as to make him dangerous and exceedingly difficult to control, and was, moreover, a 'ridgeling'; that is, a stallion only one of whose testicles came down into the scrotum. These facts, it was shown, rendered him unfit for breeding purposes. It was testified that such a horse was not only uncertain as a foal-getter, but that a large percentum of his male progeny was liable to have his own defects, preventing their castration except by an expert, and then at a high percentage of loss. The horse was fully matured at the time of his delivery to the respondents, and, as the vendors were long-time dealers in horses, the jury were fully warranted in finding that they knew of his defective condition at that time, and knew, also, that he was unsuitable and unfit for breeding purposes, and were warranted in drawing the conclusion that there was fraud in the procurement of the note and a total want of consideration therefor.

The more difficult question is whether the trial court erred in refusing to grant the motion of the appellant for judgment in its favor made at the conclusion of all of the evidence. As we have stated, the testimony of the appellant is that it is an indorsee of the note for value prior to maturity...