170 Iowa 675 | Iowa | 1914
The note in question was given on September 28, 1909, and was one of a series of three notes of $1,000 each, representing the purchase price of an imported stallion sold by the payee to the defendant upon such date. Delivery of the horse was made sometime in December, 1909. A written bill of sale was delivered to the purchaser, including a guaranty as follows:
“We have this day sold the imported Belgian stallion, Bon Espoir de Solre No. 4072 (31720) to G. W. Grigsby, of Madrid, Iowa, and we guarantee the said stallion to be a satisfactory sure breeder, provided the said stallion keeps in as sound and healthy condition as he now is and has proper care and exercise. If the said stallion should fail to be a satisfactory sure breeder with the above treatment, we agree to take the said stallion back, and the said G. W. Grigsby agrees to accept another imported Belgian stallion of equal value, in his place, the said stallion Bon Espoir de Solre No. 4072 (31720) to be returned to us at La Fayette, Indiana, in as sound and healthy condition as he now is by May 1, 1911.”
Taking the evidence offered on behalf of the defendants as true, which we must do for the purpose of this appeal, the above warranty was breached, and the horse proved to be worthless. The horse was not a sure foal getter. Only a
The defendant pleaded not only breach of warranty but false representations, based largely upon the same state of facts and upon the further fact that the seller knew that the horse in question was not sound and healthy and was not a good breeder, and yet represented him to be such. The pleas of breach of warranty and false representations are somewhat mixed. Defendant’s answer, as to the plea of false representation, is quite indefinite. In the absence of attack, we treat it as sufficient. The question submitted for our conclusion is that of the sufficiency of the evidence in support of the affirmative defenses. Was there sufficient evidence to go to the jury on the questions: (1) Of breach of warranty. (2) If there was breach of warranty, was the condition of the warranty waived, by the seller? (3) Was the horse infected with the disease in its incipient stage at the time of the pur
The condition of the warranty, however, was never actually performed by the defendant, in this, that he never returned the horse to La Fayette, Indiana. His contention is that such return was waived by the conduct of the seller. In June, 1910, he wrote the following letter to the sellers:
“Madrid, Iowa, June 15, 1910.
“Mr. Crouch & Son, La Fayette, Ind. Dear Sir: Since writing you I have had six mares to return. I- don’t think this horse has settled anything bred to him. Have you got a Belgian horse that you could let me have to finish the season with. I would have to have a good one to fill his place. If I don’t get another horse I don’t know what I will do. Let me know by wire what you will do. Be sure and let me know what you will do as soon as you receive this.
“Yours respectfully, G. W. Grigsby.”
The sellers replied to this letter stating that they were entirely sold out of Belgian horses, but would have some more in the ensuing fall.
In view of this correspondence, it would have been an idle proceeding for the defendant to go through the form of returning his horse to La Fayette and demanding in exchange another Belgian stallion of equal value at that time. His letter was a fair request for an adjustment under the conditions of the guaranty. Crouch & Son had put it out of their power to perform their guaranty, for the time being. They were doubtless entitled to reasonable time and opportunity, but the defendant was certainly entitled to go to the jury on the question whether he could reasonably be required to lose the entire season and wait until fall for the exchange. If
The defendant introduced considerable testimony tending to prove that the horse must have been infected with the disease, and must have had it in its incipient stage before it was purchased by him. The disease is rather an infrequent one in this country. It is frequently found in Belgium and France and other European countries. When found here, it is usually in imported horses. Crouch & Son were extensive importers. They were more or less familiar with the disease and had had experience with it. They had purchased this horse in Belgium about two months before he was sold to the defendant. The horse was a fine individual, and would weigh, in ordinary flesh, between 2,100 and 2,200 pounds. He vms somewhat thin, however, when he was sold to the defendant. The defendant was never able to improve his condition as to flesh. He gradually lost weight until such loss amounted to over 500 pounds.
The defendant examined veterinary surgeons as witnesses. Their testimony all tended to show that the horse must have been in the incipient stages of this disease in 1909. One of these surgeons treated the horse in 1910. He testified to the apparent condition at that time. He also testified to his opinion that the sores upon the horse in 1910 were second or third year sores. They were too large for first year sores. None of this testimony was directly disputed. It is not incredible that an experienced veterinary surgeon could form reliable judgment as to the approximate time a progressive disease had run at the time of his observation of it.
There is evidence also by the defendant of various symptoms and scars observed by him immediately after the purchase, the significance of which, however, was not appreciated by him at the time. One of these was the condition of the horse’s flesh, to which we have already referred. Others were small scars upon the skin which could have been the result of earlier sores.
If it should be found from the testimony already referred to that the sores appearing in 1910 were second or third year sores, then the diseased condition of the horse must have been apparent to an experienced observer in the summer of 1909. Crouch & Son had possession of him for two months or more. The horse was not actually delivered to defendant at the time of sale. Crouch asked to retain the horse in order to exhibit him at the horse show in Chicago in December. For that purpose, he expected to improve his condition and increase his flesh. When December came, the condition of the horse had not improved and he was not exhibited. This was a -disappointment to the defendant. The reason given by Crouch for the failure to prepare the horse and to exhibit him was that he thought it would be better for him not to increase his flesh.
The note in suit was negotiated to plaintiff under a contract between it and Crouch & Son, whereby Crouch & Son agreed to bear all expense of litigation. Such contract, how
J. Crouch & Son was a partnership consisting of father and son. The father was a director in the plaintiff bank. No officer in the bank, other than director Crouch, had any knowledge of defendant Grigsby, nor was any inquiry made concerning his solvency or otherwise. The cashier of the plaintiff testified that he alone transacted the business for the plaintiff in the purchase of such note, and testified to his good faith and want of knowledge of any infirmity. The burden of proof being upon the plaintiff at this point, the credibility of the cashier was fairly a question for the jury, to be determined in the light of the circumstances here indicated. The case at this point is quite controlled by our previous holdings: Bushnell v. Buck Bros., supra; Iowa National Bank v. Carter, 144 Iowa 715, 722; Arnd v. Aylesworth, 145 Iowa 185, 191; McNight v. Parsons, 136 Iowa 390, 399; Bennett State Bank v. Schloesser, 101 Iowa 573; Commercial Bank of Essex v. Paddick, 90 Iowa 63, 66; Frank v. Blake, 58 Iowa 750; City Deposit Bank v. Green, 130 Iowa 384; same case, 138 Iowa 156, 161. To the same effect, see the following from other jurisdictions: Citizens Sav. Bank v. Houtchens, 116 Pac. 866; Johnson County Sav. Bank v. Rapp, 91 Pac. 382; Bank v. Walker, 72 Atl. 579; New England Mortgage Sec. Co. v. Gay, 33 Fed. 636, 649; Shellenberger v. Nourse, 118 Pac. 508; Bluthentahl v. Columbia, 57 So. 814; Winter v. Nobs, 24 Ann. Cases 302, 304, 305; Parsons v. Jackson, 99 U. S. 434; 7 Cyc. 953; Ireland v. Scharpenberg, 103 Pac. 801; Nat’l Bank v. Kirby, 108 Mass. 497; Merchants Nat’l Bank v. Wadsworth, 131 N. W. (Mich.) 1108; Union
The Negotiable Instrument Act is intended to give negotiability and mobility to commercial paper, and, therefore, to extend protection to innocent holders thereof in good faith and in due course. But it is not intended as an aid or shelter to the creation of a litigating agency. If, therefore, the note was negotiated to avoid defenses thereto, and the purchaser had notice, the statute affords it no protection.
We do not overlook the fact claimed on behalf of plaintiff and the payees that the defendant had not threatened to make defense, at any time prior to the transfer of the note, but that he had asked for an extension of time. The plaintiff is entitled to the benefit of this circumstance before the jury, but it is by no means so conclusive as to entitle it to a directed verdict.
If the jury should fail to find any fraud either in the inception of the transaction or in the negotiation of the note to avoid defense, then the'burden would rest upon the defendant to show that the plaintiff was not a good-faith holder in due course. Even from that point of view, we are convinced that the circumstances shown are sufficient to carry the question to the jury.
For the reasons indicated, the order directing a verdict for the plaintiff was erroneous. The judgment entered thereon must, therefore, be — Reversed.