At the close of all the evidence the court instructed the jury to find for defendant, People's Bank of Holcomb, and verdict for it was returned accordingly and no exception was taken to that action so that defendant is not in this court. The plaintiff appealed from a judgment in favor of defendant, Mattie L. Hogue.
The general facts in this case are substantially as follows: Mr. E.S. Stacey was a sales agent for the Baldwin Piano Company, and as such sold defendant, Mattie L. Hogue, a piano and took from her a note for $400 payable to the piano company for the balance of the purchase price. A short time before this note came due, Stacey came to the home of Mrs. Hogue and spoke of being hard up and wanted to sell her a note on another party. Mrs. Hogue then concluded *Page 506 that as her note was almost due, she would make a payment on it and asked Stacey to whom she should make the check payable and he said to make it payable to him and she then gave him her check on the People's Bank of Holcomb for $331.60 payable to him. She later learned that he did not have authority to collect her note to the piano company and she then stopped payment on the check. Other facts will be noted later.
There are two assignments of error as follows:
"(1) The court erred in refusing appellant's requested instruction at the close of all the evidence for a directed verdict.
"(2) The court erred in giving instruction 4 for defendant Mattie L. Hogue."
The demurrer to defendant's evidence is based on the contention that the evidence shows without contradiction that plaintiff received the check from Stacey and gave him credit on his account at the bank and permitted him to check against it and by doing so, the plaintiff bank became a holder in due course. If the evidence showed those facts and nothing more and there was no evidence to the contrary, we think that position would be sound. The holder of a negotiable instrument, in the absence of any proof at all, is, prima-facie, the holder in due course, but when it is shown that the instrument was procured by fraud in the first instance, that prima-facie case is dispelled until proof is offered by the holder to show that it was procured by him for value before maturity and in ignorance of any defect in the title. When that is done and no evidence to contradict it appears, then the prima-facie case of the holder becomes conclusive. [Baade v. Cramer,
The defense then placed the defendant, Mattie L. Hogue, on the stand and she testified to facts showing that Stacey obtained the check in question by fraud. At the time Stacey deposited this check in plaintiff bank, a deposit slip was given him by the bank. This deposit slip showed a deposit by Stacey by check $331.60. It also contained other statements from which we note the following: "All checks and drafts are credited subject to payment under condition stated on back of duplicate ticket hereof." On the back of the deposit ticket was the following: "All items not payable in Paragould received by this bank for credit or collection are taken at the owner's risk. This bank as agent for the owner will forward same to the collecting agents out of this State but should such collecting agents convert the proceeds or remit any checks or drafts which are thereafter dishonored, the amount for which credit has been given will be charged back. . . . All checks and drafts are credited subject to payment."
After all the foregoing evidence was in, it could not be said that plaintiff had so clearly established its prima-facie case which resulted from the fact that it was the holder of the check, by uncontradicted evidence which made the prima-facie case conclusive and made it the duty of the court to direct a verdict in its favor. It was clearly a question for the jury to determine whether the plaintiff bought the check or took it for collection and the court did not err in refusing to give a peremptory instruction to find for plaintiff.
Instruction No. 4, the giving of which is assigned as error, told the jury that if they should find that defendant, Mattie L. Hogue, was induced to execute the check in question by false representations made by Stacey, then the burden was on plaintiff to show by the greater weight of evidence that it received said check as a deposit for the credit of E.S. Stacey without notice of said misrepresentations. It is contended that this instruction was erroneous because the burden to show that plaintiff was an innocent holder does not shift to plaintiff until the defense has offered evidence tending to show that plaintiff was not an innocent holder. The mere proof that the instrument was secured by fraud is not sufficient to *Page 508
place upon the plaintiff the burden to show its innocence. In this appellant is mistaken. Our statute, section 845, Revised Statutes 1919, provides "Every holder 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 instrument was defective, the burden is on the holder to prove that he or some person under whom he claims acquired the title in due course . . ." [See also, Keim v. Vettee,
Instruction No. 4 was not erroneous on the question of fraud and the burden of proof.
The judgment will be affirmed. Bailey, J., concurs; Smith,J., not sitting.