105 Va. 51 | Va. | 1906
delivered the opinion of the court.-
J. W. Harrison, doing business under the name and style of The Aragon Coffee Company, of Richmond city, purchased of Hills Brothers Company, a corporation in the city of New York, five hundred bags of coffee, for which he made a negotiable note for $3,Y2Y.02, dated January 11, 1904, payable four months after date to Hills Brothers Company, or order, at Planters Rational Bank, Richmond, Virginia. Before the maturity of this note it was indorsed to the Rational Park Bank of New York, who it is conceded acquired it in the ordinary course of business, and was an innocent holder of it for value and without notice. When the note fell due, payment was demanded and refused, and the note was duly protested. On Rovember 14, 1904, this note was indorsed to Alfred M. Rogers, without recourse, who paid to the Rational Park Bank $3,841.69, the full amount represented by the note, principal and interest.
In March, 1905, Rogers sued the maker, the Aragon Coffee Company upon this note. The defendant pleaded nil debet and a plea of set-off, in which he avers that he purchased of Hills
Hpon this plea issue was taken, and, evidence on the part ■of the plaintiff and the defendant on this plea having been introduced before the jury, the plaintiff demurred to the defendant’s ■evidence. The jury found a verdict subject to the demurrer to
We observe in limine, that there is no occasion to discuss the transaction as between the Aragon Coffee Company and Hills-' Brothers Company. The evidence is conclusive to show a bald and iniquitous fraud. The only question which we need to consider is, whether or not the parties before the court occupy such a relation to the transaction as that, under the law merchant, we must shut our eyes to the truth and close the door upon all investigation. .
■The Rational Park Bank, being the holder for value and without notice, could transmit a complete title to a third person, even though that third person had knowledge of the facts which would have defeated a recovery upon the note in the hands of the payee; the general rule being that if a person taking with notice purchase from one without notice, he is entitled to stand in the latter’s shoes and take shelter under his good faith. If it were not so, the bona fide purchaser without notice might be unable to dispose of the property, and thus its value in his hands-be materially deteriorated. A bona fide holder, it is said, is entitled to have the whole world for his market.
But there is an exception to this rule, which is well established: If the payee sell negotiable paper to an innocent third party and repurchases it, he does not thereby acquire any better-right against the maker than he possessed in the first instance. Andrews v. Robertson, 87 N. W. 190, 54 L. R. A. 673, 87 Am. St. 870; Church v. Ruland, 64 Pa. 432; Ely v. Wilcox, 26 Wis. 91; Elwell v. Tatum, 6 Tex. Civ. App. 397, 24 S. W. 71, 25 S. W. 434; Hoye v. Kalashian (R. I.), 46 Atl. 271; Tod. v. Wick Bros., 36 Ohio St. 370.
In this, case, then, it was not sufficient for the defendant to show that there was fraud in the transaction between him and Hills Brothers Company, for notwithstanding that fraud the National Park Bank, being a bona fide holder of the note, could transmit, and Rogers, the plaintiff, could acquire a title to the note, free from all antecedent equities—unless there was evi
The only evidence adduced by the plaintiff was the note upon which he sued. Having read that to the jury, he rested.
The history of that note is given in the record. The Rational Park Bank acquired it, as we have already said, in due course of business, and is, under the law merchant, to'be considered an innocent holder for value and without notice.
On May 16, 1904, the attorney for the Rational Park Bank wrote to the Aragon Coffee Company the following letter:
"Gentlemen:
“My client, the Rational Park Bank, holds your note for the sum of $3,727.02 to the order of the Hills Brothers Co. which matured on the 11th inst. and has been returned from the bank where it was payable protested. The note has been placed in my hands with instructions to take such steps as may be necessary to collect it, and I have to request that you will send me without delay your check for the amount of the note, with interest to date, and $1.00 protest fees.
“Yours truly,
To this letter the Aragon Coffee Company replied, through its attorney:
Richmond, Va., May 24, 1904.
.....“Your letter of May 16th to the Aragon Coffee Co. has been referred to me, and in reply I beg to state that this note represents the purchase price of coffee bought by*57 the Aragon Coffee Co. from Hills Bros. & Co. The said coffee was not according to sample, and that the attention of Hills Bros, was called to this in several letters to them from the Aragon Coffee Co. some time past, bnt which they refused to consider. My clients are perfectly square people in every particular, but do not propose to pay for coffee that they cannot use. I would suggest that you will probably find your way easier to make this money out of Hills Bros. & Co. than out of the Aragon Coffee Co.
“Very truly yours,
“H. W. GOODWYR.”
It is among the agreed facts in the case that Hills Brothers Company had to their credit with the Rational Park Bank during all the period covered by this investigation at least the sum •of five thousand dollars. It appears that one of the principal stockholders in Hills Brothers Company was the father-in-law of the plaintiff, Rogers; that his brother-in-law was the presi•dent of the company; and that his wife was one of the stockholders in the company. It further appears that the first information Rogers had with respect to this note was derived from his father-in-law; that at his suggestion the plaintiff went to the attorney for the Rational Park Bank, in whose custody the mote was; that he purchased it, paying the full principal and interest due upon the note; that in order to make the purchase he had to raise the money by the sale of stocks; that he took ■the note from the bank without recourse, after it had been protested, and with the knowledge that its collection would involve a law suit. He was put upon the stand as a witness by the ■plaintiff in error, and every effort to elicit the truth with respect to this transaction was met with evasion, equivocation, or silence. He was asked if to answer the questions would tend to in
In Wigmore on Evidence, volume 1, section 285, it is said: “The consciousness indicated by conduct may be not an indefinite one affecting the weakness of the cause at large, but a specific one concerning the defects of a particular element in the cause. The failure to bring before the tribunal some circumstance, document, or witness, when either the party himself or his opponent claims that the facts would thereby be elucidated,, serves to indicate, as the most natural inference, that the party fears to do so, and this fear is some evidence that the circumstance or document or witness, if brought, would have exposed facts unfavorable to the party. These inferences, to be sure, cannot fairly be made except upon certain conditions, and they are also open always to explanation by circumstances which make some other hypothesis a more natural one than the party’s-fear of exposure. But the propriety of such an inference in general is not doubted. The non-production of evidence that would naturally have been produced by an honest and, therefore,, fearless claimant permits the inference that its tenor is unfavorable to the party’s cause.”
And continuing this subject, the same author at section 289' says: “At common law the party-opponent in a civil case was ordinarily privileged from taking the stand; but he was also-disqualified ; and hence the question could rarely arise whether
It seems plain to us that there is a stronger presumption to be raised against a party in whose possession the facts must be, if they exist, by which suspicion would be removed and all question as to the propriety of his conduct be set at rest, who stolidly réfuses, without the suggestion of a reason, to aid the court in arriving at the truth. It is within the bounds of possibility that a reason existed, why “as a matter of business,” to use his own language, the plaintiff may have thought it desirable to buy a protested note which he knew could only be collected as the result of a law suit. If such explanatory facts existed, they were in his breast, and his refusal to disclose them warrants the hypothesis that he feared the exposure.
As was said in Union Bank v. Stone, 50 Me. 595, 79 Am. Dec. 631, “There was evidence proving or tending to prove that a notice of demand and non-payment had been given the defendant. He had been notified to produce it, and did not. He was present and not a witness. If he had never received such a notice, he knew it, and knowing it, would be little likely to omit an opportunity of stating a fact thus conclusively in his favor. The evidence tended strongly to charge him. A word from his lips might exonerate him from all liability. .... If notice had been received, and the defendant knew it, he might well be silent. The utterances of the truth would establish the plaintiff’s claim. ... If he were a witness, he must either state the truth or a falsehood. If he testified truly,
And in Brown v. Schock, 77 Pa. 471, it is said: “A man of ordinary intelligence must know that his failing to appear, when he had a strong motive to appear, would be evidence against him; if he relies upon his ability to disprove the motive imputed, he takes the risk, but he leaves the effect of his conduct, as a matter of evidence for the opposite side, to go to the jury.”
In Bastrop State Bank v. Levy, 106 La. 586, 31 South. 164, the court said: “Judicial tribunals are established to administer justice between litigants, and the first and most important step to that end is the ascertainment of the truth of the controversies which come before them. It is only when the truth is ascertained that the law can be properly applied in the just settlement of disputes. Litigants owe the duty of assisting in every legitimate way in the elucidation of the truth. When a defendant can by his own testimony throw light upon matters at issue, necessary to his defense and peculiarly within his own knowledge if the facts exist, and fails to go upon the witness stand, the presumption-is raised, and will be given effect to,, that the facts do not exist.”
In the case of Battersbee v. Calkins (Sup. Ct. of Mich.), 87 N. W. 760, a firm of Miagara Ralls, Mew York, were payees and holders of the note in suit. It was a- negotiable promissory note, payable to their order. It was sold before maturity to a savings bank in Detroit, under circumstances which admittedly made the bank a bona fide purchaser. It was sold to this bank by the attorney of the payees, to whom it had been sent for collection. It did not appear whether or not the payees directed such sale. The attorney indorsed the note before sale in blank,, as the payees had previously done. The note went to protest for non-payment, and subsequently it was indorsed to “any bank or order” over the signature of the savings bank, and transferred to a State bank, which sent to the savings bank its check for the amount due upon the note. Plaintiff was the cashier of the State bank, and testified that he was not the owner of the note, and had brought this action for the benefit of the bank. The defendant, who was the maker of the note, sought to show that the note was obtained by fraudulent representations made by an agent of the payees. The attorney for the payees before mentioned, called as a witness for the defendant, testified that he received the note before maturity for collection, and indorsed and sold it to the savings bank, and received payment of the consideration, which he put in the bank to his own credit, and checked out, as he did other money; that he sold the note because he wanted to, and did not know that he was directed to do so by the payees. It was shown that after protest of the note
The case under consideration is, in our judgment, far stronger to show a collusive purchase upon the part of Rogers than the one cited. The facts which are set forth in this opinion, coupled with the conduct of the plaintiff when upon the stand as a witness, inexplicable upon any reasonable hypothesis except that he feared to disclose the truth and preferred to take the chance
We think, upon the whole case, it was for the jury to say whether Rogers was a purchaser in good faith, or was conniving with Hulls Brothers Company to purchase the note as their agent, in order to defeat the equities of the Aragon Coffee Company.
It follows that the judgment upon the demurrer should have been in favor of the defendant, and this court will enter such judgment as the Circuit Court ought to have rendered.
Reversed.