Union Nat. Bank v. Fox

• Decision Date: 28 September 1928
• Docket Number: No. 4297.,4297.
• Citation: 9 S.W.2d 1070
• Parties: UNION NAT. BANK v. FOX.
• Court: Missouri Court of Appeals

9 S.W.2d 1070

UNION NAT. BANK v. FOX.

No. 4297.

Springfield Court of Appeals. Missouri.

September 28, 1928.

Appeal from Circuit Court, Texas County; W. E. Barton, Judge.

Action by the Union National Bank against J. O. Fox. Judgment for defendant, and plaintiff appeals. Affirmed.

Page & Barrett, of Springfield, for appellant.

Hiett, Lamar & Covert, of Houston, for respondent.

BRADLEY, J.

This is an action in replevin to recover an Overland automobile. The issues were submitted to a jury, and verdict and judgment went for defendant. Motion for a new trial was overruled, and plaintiff appealed. Heretofore we handed down an opinion in this cause, affirming the judgment, but granted a rehearing.

March 25, 1926, defendant purchased the car in question from the Overland-Knight Company of Springfield, Mo., hereinafter referred to as the automobile company. Defendant traded in as a part of the consideration a used car, and gave for the balance his note for $370.59. This note was payable in monthly installments of $30.88 each, except the last installment, which was for $30.91. The note provided that, if default was made in payment of any installment the remaining installments, at the option of the legal holder, would become due and payable. At the time of the purchase of the car and execution of the note, defendant gave to the automobile company a chattel mortgage upon the car to secure the note. March 30, 1926, five days after execution thereof, plaintiff bank purchased the note from the automobile company, giving to said company a deposit for the amount of the face of the note, and the note was indorsed by the automobile company, and it and the mortgage were delivered to plaintiff. Defendant paid one of the installments and then defaulted.

Defendant in his answer admitted the execution of the note and mortgage, and denied generally all other allegations, and as a special defense pleaded that the note and mortgage were given to the automobile company in payment of the balance due on the purchase price of the car in question; that at the time he purchased the car it was represented to him as a new and unused car; that such rep-presentation was false and untrue; that said car was, in fact, a used or secondhand car when purchased by him; that he had paid the full value of said car. Further answering, defendant states that at the time of the institution of this suit plaintiff was not the owner or good-faith holder of the note and chattel mortgage; that at the time this suit was instituted the automobile company was the owner and holder of the note and mortgage. Also it is alleged in the answer that the plaintiff at the time it purchased the note knew that the same had been procured from the defendant by the false and fraudulent representations alleged. The reply was a general denial.

The chief assignment is based upon the refusal, at the close of the whole case, of an instruction in the nature of a demurrer to the evidence.

Plaintiff introduced in evidence the note and mortgage. The note showed that only one installment had been paid, and that payment was made May 13, 1926. Also the indorsement of the note by the automobile company to plaintiff shows that the automobile company guaranteed payment.

J. L. Hines, president of the automobile company, and a witness for plaintiff, testified that he sold the note to plaintiff on March 30th, after its date of March 25th; that plaintiff gave the automobile company credit for the face value of the note; that the payment made on the note was made after it was sold to plaintiff; that the automobile company had authority from plaintiff to make the collection on the note; that the automobile company was advised by plaintiff of defendant's default in payments on the note; that he (witness) did not sell the car to defendant; that Mr. Berry, representative of the automobile company, made the sale; that he (witness) did not know what representations Berry made; that plaintiff did not charge back the note to the account of the automobile company, but carried the note as past-due paper.

Walter A. Coon, vice president of plaintiff, testified that plaintiff purchased the note from the automobile company March 30, 1926, and gave therefor the face value of the note; that a deposit for that amount was given the automobile company; that plaintiff furnishes "all the agents whose paper we handle, a list of past due payments each week and they understand that they must get out and collect their payments and must assist in the collections of the payments"; that "the bank has been the owner and holder of it (the note) ever since (the purchase of the note) and is now."

That defendant's evidence tends to support the allegation in his answer that the car was a used and secondhand car, etc., when purchased by him, cannot be questioned under this record; hence we shall not set out the evidence on that question. While the answer pleads that plaintiff knew, when it purchased the note, of the alleged false representations, there is no evidence in the record that plaintiff, when it purchased the note, knew anything about the alleged false representations.

The evidence relied upon by defendant to establish the defense that plaintiff was not the owner of the note and mortgage, when this cause was instituted, is substantially as follows: July 7, 1926, the automobile company filed a suit in replevin before a justice of peace of Texas county against defendant whereby it was sought to recover the car in controversy. Writ was issued by the justice and served by the constable. On the return day, July 19th, the cause in the justice of the peace court was withdrawn or dismissed and on the same day the cause at bar was filed in the circuit court. That the suit in the name of the automobile company as plaintiff in the justice of the peace court was filed by one Robertson, who was collector for the automobile company. That the suit was dismissed, according to the evidence of the justice of the peace, on the ground that the amount involved exceeded his jurisdiction. That Robertson was sent from Springfield to Cabool by the automobile company to collect the balance due on the note after defendant's default. That the automobile company instructed Robertson before he went to Cabool to "get the car if he could not collect."

Plaintiff's vice president, Mr. Coon, testified that he never heard of the suit in the justice court "until a few minutes ago"; that he did not know whether the automobile company had the note at the time the suit was filed in the justice court, but he supposed they did not; that such "is not customary."

The president of the automobile company, Mr. Hines, testified that his company did not have the note when the suit was filed in the justice court; Tom Robertson, collector for the automobile company, was down at Cabool and brought the suit in the justice court; that Robertson had no attorney; that he (Robertson) "transacted the business himself"; that the automobile company sent Robertson to Cabool to collect from Fox and that he (Robertson) filed the replevin suit in the justice court; that he (witness) did not know in whose name the suit was filed; that he did not think that Robertson had with him the chattel mortgage when the suit was filed in the justice court; that there were three copies of the mortgage; that two copies were delivered to plaintiff and one copy kept in the files of the automobile company.

Every holder of a note is deemed, prima facie, to be a holder in due course, but, when it is shown that the title of any person who has negotiated the note was defective, then the burden is on the holder to prove that he or some person under whom he claims acquired the note in due course. Section 845, R. S. 1919. A holder in due course is a holder who has taken the note or instrument under the following conditions: (1) That it is complete and regular on its face; (2) that he became the holder of it before it was overdue and without notice that it...