80 Ind. App. 598 | Ind. Ct. App. | 1923
Action by appellee on a promissory note for $2,500, executed by appellant, March 12, 1917, payable with interest to the order of American Underwriters, Inc. hereinafter designated American Underwriters. The note was due four months after date, and payable at appellee bank. It is averred in the complaint that for value received, and before maturity, the note had by payee been assigned to appellee. Appellant, in addition to the general issue and a plea of payment, filed five special answers setting up, failure of consideration and fraud. In our view, it will not be necessary to make further reference to appellant’s answer, except as to the sixth paragraph, material averments of which are, in substance, that appellant executed a written subscription for certain
It is further averred that appellant relied upon the representations so made, and was thereby induced to enter into the contract for the purchase of the stock. The paragraph closes with the following prayer: “Wherefore, this defendant says that the consideration of the note sued on has wholly failed, and he asks that he may go hence with judgment for his costs.”
The theory of this answer, when read as a whole, is that the note was procured by the payee by fraudulent representations as to the value of the stock. The allegation in the’prayer that the consideration of the note had failed is not controlling. A pleading is to be tested and construed by the facts averred therein, and not by its prayer for relief. McGuffey v. McClain (1892), 130 Ind. 327, 30 N. E. 296; Crawfordsville Trust Co. v. Ramsey (1912), 178 Ind. 258, 98 N. E. 177; Supreme Sitting, etc., v. Baker (1893), 134 Ind. 293, 314, 33 N. E. 1128, 20 L. R. A. 210.
The issues were closed by a reply in denial, and two affirmative replies pleading facts to show that appellee was a bona fide holder in due course.
The cause came on for trial with a jury. At the conclusion of the evidence, the trial court, on motion of appellee, peremptorily instructed the jury to return a verdict for appellee for the amount of the note, and judgment. was rendered accordingly.
It is contended by appellant that there is evidence that the execution of the note by appellant was procured by fraud, thus placing the burden upon appellee
In passing upon a motion for peremptory instruction, the trial court must accept as true all facts which the evidence tends to prove, and, as against the party requesting such instruction, must draw all inferences which the jury might reasonably draw. If the evidence is conflicting, it is only the evidence which is favorable to the party against whom the instruction is asked, that can be considered. Lyons v. City of New Albany (1913), 54 Ind. App. 416, 103 N. E. 20, and cases there cited.
Sections 55 and 59 of the Negotiable Instruments Act of 1913 (Acts 1913 p. 120, §§9089c2, 9089g2 Burns 1914) provide as follows:
“55. The title of a person who negotiates an instrument is defective within the meaning of this act when he obtains the instrument, or any signature thereto, by fraud * * * or when he negotiates it in breach of faith, or under such circumstances as amount to fraud.”
“59. 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 as holder in due course. But the last-mentioned rule does not apply in favor of a party who became bound on the instrument prior to the acquisition of such defective title.”
Governed by these statutes, and keeping in mind the above rule of law fixing the duty of the trial court in considering the evidence when called upon to rule on a motion for a peremptory instruction, we are con
It is suggested by appellee that the evidence does not show that appellant, when he purchased the stock and executed the note therefor, relied upon the representations made. We cannot concur in this view. There is no evidence that appellant made any independent investigation, or that he was in possession of any information as to the value of the stock
Other questions properly presented are not likely to-arise in another trial, and are, therefore, not discussed. A recent opinion of this court, which may prove instructive on a retrial of this cause is National City Bank v. Kirk (1922), (Ind. App.) 134 N. E. 772.
Reversed, with instructions to grant a new trial.