182 Iowa 763 | Iowa | 1918
The suit is based on two notes, one for $600 and the other for $1,000, dated August 3, 1915, payable to T. L. O’Neil, of La Salle, Illinois, due April 3, 1916. The plaintiff claims to be a holder in due course, and that it purchased the notes from the original payee on August 3, 1915, but, by amendment to petition, says the date was August 30th, and before their maturity, and for a sufficient consideration. The negotiations for the transfer of the notes were between O’Neil, the payee, and one Carpenter, who was president of the plaintiff corporation, and who was acting for the plaintiff. The consideration alleged to have
( The plaintiff is a corporation, engaged in the manufacture and sale of farm wagons, selling mostly to jobbers. ONeil, the payee in the note, was engaged in the manufacture and sale of implements, and was in the habit of selling implements and taking notes in settlement for them., Defendant’s sons were engaged in the retail implement business in Eddyville, Iowa. Defendant had signed notes as surety for his sons. The notes in suit are signed by Jacob Van De Pol and H. Van De Pol.
The execution of the notes is admitted by defendant, but he alleges as a defense that certain false representations were made by the payee to induce the execution of the notes, and that there was fraud in the inception, and want of consideration; denies that plaintiff was an innocent purchaser in due course for value, and denies that plaintiff took the notes without notice of his defense thereto, or any infirmity therein, or defect in the title of the perspn negotiating it. It is further alleged by the .defendant that, if plaintiff is the owner of the notes, it was cognizant of the fraud practiced by the payee, T. L. ONeil, in the procurement thereof; that, about March 13, 1915, the ONeil Implement Company, through its agent, T. L. ONeil, sold Van De Pol Bros., of Eddyville, buggies and other merchandise of the value of $472.97, and other merchandise of the value of $472.80, receiving in payment therefor credit orders for said sums, signed by Van De Pol Bros, and the defendant herein; that, about May 1, 1915, the said ONeil Implement Company, by its agent, T. L. ONeil, sold said Van De Pol Bros, other merchandise, of the value of J$2,320, receiving in payment therefor a note, of even date,
There Avas evidence to support the allegations' of the • ansAver, and it is conceded by counsel for plaintiff that the
It is contended for appellant that:
When the evidence shows that a note has its inception in' fraud and deceit, the burden of proving that the owneiof the noté sued upon obtained the same in good faith, in the usual course of business, and for a valuable consideration, is placed upon the person making this claim. They cite Bank of Bushnell v. Buck Bros., 161 Iowa 362; Merchants Nat. Bank v. Grigsby, 170 Iowa 675, 684; Perry Sav. Bank v. Fitzgerald, 167 Iowa 446; Stotts v. Fairfield, 163 Iowa 726, 739; In re Estate of Philpott, 169 Iowa 555; Iowa Nat. Bank v. Carter, 144 Iowa 715; McNight v. Parsons, 136 Iowa 390; Arnd v. Aylesworth, 145 Iowa 185; Waukee Sav. Bank v. Jones, 179 Iowa 261.
There seems to be no dispute between counsel as to this legal proposition. It is contended also that plaintiff has failed to show that it took the note sued upon in good faith, for a valuable consideration, in usual course of business, and without notice of the defect in the title. Robertson v. U. S. Live Stock Co., 164 Iowa 230; Bank of Bushnell v. Buck Bros., 161 Iowa 362, 370.
On .the other hand, it is contended by plaintiff, and they cite authorities to the familiar doctrine, that, where plaintiff shows a clear right to recover, and the defendant has shown no defense, the court may direct a verdict for the plaintiff. They cite further Section 3060-a56, Code Supplement, 1913, to the proposition that, to constitute notice
They cite further, Section 3060-a57, Code Supplement, 1913, to the proposition that a holder in due course holds the instrument free from any defect of title in prior parties, and free from defenses available to prior parties among themselves, and may enforce payment of the instrument for the full amount thereof, against all parties liable thereon. They concede that, under the holding of the case of Robertson v. United States Live Stock Co., 164 Iowa 230, 234, the uncontradicted denial of notice by the holder is not sufficient to justify the direction of a verdict; yet the facts and circumstances supporting the denial of notice may be such as to warrant such direction. We have held that, though the evidence may not be such as to show bad faith of the party to whom the note is negotiated, still, the evidence may not be sufficient to show good faith. After a careful examination of the record, we are of opinion that the case should have been submitted to the jury on this question.
Of course, no one circumstance will determine the question, but all the facts and circumstances in the case must be considered. We shall refer to some of the circumstances relied upon by appellant. In the first place, there is the circumstance as to whether plaintiff obtained the notes in due course of business. Its business was not that of buying commercial paper, as a bank or the like; its business was that of manufacturing and selling wagons. Plaintiff did not pay money for the note outright, — at least not
Without going further into detail in regard to the evidence and circumstances, it is our conclusion that, under the entire record, a case was made for the jury. This being so, the cause is reversed and remanded for another trial.— Reversed.