Walters v. Rock

• Decision Date: 21 February 1908
• Citation: 115 N.W. 511,18 N.D. 45
• Parties: A. N. WALTERS v. JACOB ROCK
• Court: North Dakota Supreme Court

115 N.W. 511

18 N.D. 45

A. N. WALTERS v. JACOB ROCK

Supreme Court of North Dakota

February 21, 1908

Appeal from District Court, Traill county; Pollock, J.

Action by A. N. Walters against Jacob Rock. Judgment for defendant and plaintiff appeals.

Affirmed.

Styles & Koffel for appellant.

Exceptions to a deposition filed before commencement of trial are in time. State v. Kent, 5 N.D. 516, 67 N.W. 1052; State v. Hasledahl, 2 N.D. 521, 52 N.W. 315; Hunnell v. State, 86 Ind. 431; Wagner v State, 42 Ohio St. 537; Cregier v. Bunton, 2 Strobh, 503; Ueland v. Dealy, 11 N.D. 530.

Evidence is necessary to identify D. E. Rogers with Daniel Eastman Rogers. Vickery v. Burton, 6 N.D. 245. 69 N.W. 193; Andrews v. Winn, 54 N.W. 1047; Morris v McKnight, 1 N.D. 266, 47 N.W. 375; Bem v. Bem, 55 N.W. 1102; Buckoven v. Lincoln Township, 83 N.W. 335.

When plaintiff shows purchase in good faith, for value, and no knowledge of circumstances surrounding the inception he is entitled to a directed verdict. 14 Enc. Pl. & Pr. 641-681; Mumford v. Weaver, 31 A. 1; Second Nat. Bank v Morgan, 30 A. 957; Newbolt v. Pennock, 26 A. 607.

The circumstances surrounding the transaction determine plaintiff's good faith. Williams v. Huntington, 13 A. 339; 4 Enc. Law (2nd Ed. ) 323; Knowlton v. Schultz, 6 N.D. 417, 71 N.W. 550; Farrell v. Lovett, 68 Me, 326; Kellog v. Curtis, 69 Me. 213; Bank v. Sargent, 27 A. 193; Cheney v. Janssen, 29 N.W. 289; Crampton v. Perkins, 3 A. 301; Martin v. Johnston, 52 N.W. 819; Rosemond v. Graham, 56 N.W. 38; Williams v. Huntington, 13 A. 339; Sec. 6358 Rev. Codes N.D. 1905; 4 Enc. Law (2nd Ed.) 300; Richards v. Monroe, 52 N.W. 339; Davis v. Seeley, 38 N.W. 901; Natl. Bank v. Young, 7 A. 490; Clarion Bank v. Morgan, 30 A. 958; Credit Co. v. Howe Co. 8 A. 476; Bank v. Pennington, 77 N.W. 1084; Cook v. Wierman, 2 N.W. 338; Bank v. McNeir, 53 N.W. 178; Tied Com. Paper, Sec. 289; 2 Rand. Com. Paper, Sec. 998, 1001; 1 Daniel, Neg. Inst. 767, 773; Tourtelot v. Reed, 64 N.W. 928.

Though the taker of negotiable paper be negligent, unless he acted in bad faith, his title will prevail. Crawford's Annotated Neg. Inst. Law (2nd Ed.) 54; Cheever v. Pittsburg Co. 44 N.E. 701; Amer. Ex. Nat. Bank v. New York Belting Co. 43 N.E. 168; Knox v. Eden Musee Am. Co. 42 N.E. 988; Canajoharie Nat. Bank v. Diefendorf, 25 N.E. 403; Vosburgh v. Diefendorf, 23 N.E. 811; Jarvis v. Manhattan Beach Co. 43 N.E. 68; Murray v. Lardner, 2 Wall. 110; Swift v. Smith 102, U.S. 442, 26 L.Ed. 193; Belmont v. Hoge, 35 N.Y. 65; Welsh v. Sage, 47 N.Y. 143; Nat. Bank v. Young, 41 N.J.Eq. 531; Fifth Ward Bank v. First Nat. Bank, 48 N.J.L. 513; Credit Co. v. Howe Machine Co. 54 Conn. 357; Ladd v. Franklin, 37 Conn. 64; Croft's Appeal, 42 Conn. 154.

The facts not being in evidence, expert's opinion is inadmissible. Kinney v. Brotherhood, 15 N.D. 21, 106 N.W. 44; 17 Cyc. 242.

He cannot predicate upon hearsay. Heald v. Thing, 45 Me. 392; Barber's Appeal, 22 L. R. A. 90; Wright v. Wright, 50 P. 444; Baltimore Safe Deposit Co. v. Berry, 49 A. 401; Bradford v. Cunard Steamship Co., 16 N.E. 719; Lane v. Bryant, 69 Am. Dec. 282; Lund v. Tyngsborough, 9 Cush. 36; Tibbits v. Phipps, 57 N.E. 1126; Foster v. New York Fidelity Co. 75 N.W. 69, 40 L. R. A. 833; Wright v. Tatham, 5 Cl. & F. 670, 2 Jur. 461; Rupe v. State, 61 S.W. 929; 17 Cyc. 242; Jones v. Portland, 50 N.W. 731, 16 L. R. A. 437; 17 Cyc. 243.

John Carmody, for respondent.

When fraud is shown in the inception of a negotiable instrument, indorsee must show his purchase in good faith, for value, without notice. Vickery v. Burton, 6 N.D. 249, 69 N.W. 193; Knowlton v. Schultz, 6 N.D. 417, 71 N.W. 550; Dunn v. National Bank, 77 N.W. 111; Kirby v. Berguian, 90 N.W. 856; Tamlyn v. Peterson, 15 N.D. 488, 107 N.W. 1081.

Evidence was sufficient to sustain the verdict. (See cases last above cited.)

Medical expert testimony may rest in part on patient's statements to him. Jones v. Chicago, St. P. M. & O. R. Co., 45 N.W. 444; Hand v. Brookline, 126 Mass, 324; Armendy v. Stillman, 3 S.W. 678; Ft. Worth v. Thompson, 76 Tex. 501; Wright v. Hardy, 22 Wis. 348; State v. Klinger, 46 Mo. 224; Matteson v. N.Y. Cent. Co. 35 N.Y. 487; Gilman v. Stratford, 50 Vt. 723.

OPINION

MORGAN, C. J.

Action on a promissory note by an indorsee claiming to be a purchaser in due course. The answer alleges that the note was procured through fraudulent representations on the part of the payee, and that the plaintiff took said note with knowledge of the fraud by which it was executed and delivered. The jury found in favor of the defendant. A motion for a new trial was made and denied. Plaintiff appeals from the order denying a new trial. The assignments are numerous; but the one principally relied on is that the evidence is insufficient to justify the verdict.

The original payee of the note was one Dr. Rea, of Minneapolis, who traveled as a specialist in curing various diseases. The defendant consulted him at Moorhead, Minn., and was informed that he was afflicted with a cancer, and the doctor agreed to cure him for $ 250. The defendant had only $ 25 in money, but gave his note for $ 250, and paid him $ 25 in cash, which was immediately indorsed as a payment on the note. The doctor then treated him by injecting some preparation into the alleged cancerous growth, and agreed to send him some more medicine by express. In a very few days the medicine came by express, but the defendant refused to accept it for the reason that it had been consigned C. O. D., and required a payment of $ 101.50 before the express company could deliver it to him. The defendant then consulted a local physician, who cured him in about one week. These are the facts as related by the defendant, and must have been found to be true by the jury in view of the verdict in his favor. Accepting the same as true, we think that the allegation of fraud in the inception of the note was sustained. The promise as made to the defendant must have been made without any intention of performing it. Under our statute the making of such a promise constitutes fraud. Section 5293, Rev. Codes 1905; Tamlyn v. Peterson, 15 N.D. 488, 107 N.W. 1081.

The evidence also amply sustains the fact that the doctor was not acting in good faith in his representations. He did not send the medicines in accordance with his agreement, but sent them by express with intent to force a payment of $ 100 not due before the medicines could be used. He sold the note very soon after the refusal to pay the $ 100 to the plaintiff. Whether the plaintiff is an indorsee in due course is a question in dispute between the parties. The plaintiff claims that the note duly indorsed was delivered to him on June 6th, and that he thereafter paid $ 202.50 therefor, having purchased on a 10 per cent. discount. He does not claim to have paid for it on that day, and first says that he does not know the day when he paid for it. He states that he paid for it later, when he made a "settlement" with the doctor for some other notes. The evidence shows that the plaintiff was accustomed to buy notes from the doctor regularly, and had been accustomed to do so for three years, and that he had some trouble in collecting some of them because the parties "did not want to pay them." He does not specifically remember the reasons why the makers refused to pay the notes, but knows that he has a considerable number of these notes now on hand, past due and uncollected. He made no inquiry concerning the financial responsibility of the defendant before purchasing the note, unless from the doctor. The defendant was a stranger to him. He immediately placed the note in the hands of an agency for collection, although it was not yet due. He knew that the doctor was accustomed to travel throughout the country in his professional capacity, and took notes in payment of services performed. He says further: "I did not know of any dispute or defense of the note at the time I purchased it. I did not inquire." He nowhere states that he bought the note in good faith. He does not state that he had no notice of defenses at the time he paid for the note. It will be noted that it was bought and delivered to him on June 6th. He claims that he paid for it later when a "settlement" was made for this note and others. On this question he testifies: "Q. At the time that you bought this note in suit from Dr. Rea, did you buy any others from him? A. I don't remember. Q. But at the time you settled with him for this note you settled for several others at the same time, did you? A. Very likely so. Q. Do you remember when you paid for the note? A. I do not." On redirect examination, in response to leading questions, he says that he is positive that the "settlement" was made prior to July 15th, which would be about three weeks before the note became due. Dr. Rea was also a witness, and on the question of the negotiation of the note testified simply that the "note was sold before maturity on June 6th." Nothing was stated by him about the time of payment nor how paid. On this testimony we are urged to declare that the verdict is not sustained by the evidence, and that it is uncontradicted that the plaintiff was an innocent purchaser. After carefully reading all of the testimony of the plaintiff, we find it evasive, contradictory, and of an unsatisfactory character to prove facts entirely within the knowledge of himself and Dr. Rea. There is not even an attempt to show that there was no notice of defenses on the day that he claims to have paid for the note. If he then had notice of defenses to the note, he would not be an innocent purchaser. Joyce on Defenses to Commercial Paper, § 240.

The plaintiff's contention, therefore, is that he is a bona fide holder by virtue of purchase and...