120 Mich. 285 | Mich. | 1899
(after stating the facts). The rules of law applicable to the commercial paper here in controversy are well established. As briefly as I am able to state them, they are as follows:
2. If plaintiff took the paper in good faith, for value, before maturity, and without knowledge, either actual or constructive, that it was tainted with fraud, his title thereto is perfect. In such case it is no defense that the money was misapplied by one of the partners. Nichols v. Sober, 38 Mich. 678; Fuller v. Percival, 126 Mass. 381; Atlas Nat. Bank v. Savery, 127 Mass. 75 (34 Am. Rep. 345); First Nat. Bank v. Morgan, 73 N. Y. 593; Beal-Estate Investment Co. v. Smith, 162 Pa. St. 441; Phillips v. Stanzell, (Tex. Civ. App.) 28 S. W. 900; Whitaker v. Brown, 16 Wend. 505; Mechanics’ Bank v. Foster, 44 Barb. 87; Gale v. Miller, Id. 420.
3. The taker of a promissory note or bill of exchange may lawfully presume that it is a partnership transaction. Schwanck v. Davis, 25 Neb. 196; Doty v. Bates, 11 Johns. 544; Whitaker v. Brown, 16 Wend. 505; Haldeman v. Bank, 28 Pa. St. 440 (70 Am. Dec. 142); Littell v. Fitch, 11 Mich. 525; Carrier v. Cameron, 31 Mich. 373 (18 Am. Rep. 192).
4. The fact that such paper is payable to a member of the firm is no evidence that it is not a partnership transaction. Ihmsen v. Negley, 25 Pa. St. 297; Haldeman v. Bank, 28 Pa. St. 440 (70 Am. Dec. 142); Feurt v. Brown, 23 Mo. App. 332.
6. When such fraud is shown, the onus probandi then shifts to the plaintiff to show that he took the paper in good faith and for a valuable consideration. Vosburgh v. Diefendorf, 119 N. Y. 357 (16 Am. St. Rep. 836), and authorities there cited.
7. Proof of circumstances which would be sufficient to put a prudent man upon inquiry is not sufficient to defeat recovery. The circumstances must be such as to show mala, fides on the part of the holder. This may be shown by evidence of actual knowledge of the purposes for which the paper was given. Nichols v. Sober, 38 Mich. 678; New York Iron Mine v. Citizens’’ Bank, 44 Mich. 344; Miller v. Finley, 26 Mich. 249 (12 Am. Rep. 306); Borden v. Clark, 26 Mich. 410; Chapman v. Remington, 80 Mich. 552; Goodrich v. McDonald, 77 Mich. 486; Atlas Nat. Bank v. Savery, 127 Mass. 75 (34 Am. Rep. 345); Goodman v. Harvey, 4 Adol. & E. 870.
8. If the plaintiff was a bona fide holder of the original paper, his right -to recover is not defeated by renewals, and McLachlan was not released thereby. Tilford v. Ramsey, 37 Mo. 563; Preston Nat. Bank v. Pierson, 112 Mich. 435; Wilson v. Richards, 28 Minn. 337; Hopkins v. Boyd, 11 Md. 107.
We have cited only a few- of the authorities referred to in the briefs of counsel. Mr. McLachlan saw fit to enter into a trading partnership with Mr. Linn, which expressly provided for the borrowing of money, the making of promissory notes, and the procuring of indorsements. Mr. Linn, both by express contract and by implication, had the power to borrow the money and make the paper in contro
Some of these notes were renewed after McLachlan had notified plaintiff by letter, repudiating his liability upon them, and stating that Linn had no authority to make them. The partnership at the time was in existence, and, under the authorities above cited, McLachlan was not relieved by the mere renewals. Having power to make them, he had also the power to renew them while the partnership lasted.
The only remaining question is whether the court erred in the exclusion of testimony. The defendants offered in
Defendants made a motion for a new trial upon the ground that they had been deprived of certain evidence given by plaintiff upon a former trial. This evidence consisted of testimony which had been taken between the same parties in a suit tried just before the trial of the present case, which lasted nearly a week. The same attorneys tried that case; the same stenographer took the testimony. This testimony was subsequently written out, and the claim is now made that it was impossible for the defendants to have had a copy of it for use upon the present trial, and that plaintiff gave testimony upon the other trial material to the defense in this case. If this were so, the stenographer could easily have had his attention called to it, and the testimony read over, during the progress of this trial. We think the court properly refused to grant a new trial upon this showing.
Judgment affirmed.