44 Mo. App. 316 | Mo. Ct. App. | 1891
This is another case of agricultural commercial paper.' Some men, desirous of earning money without working for it, met at Springfield, Missouri, and pretended to organize “The Missouri and Kansas Grrain & Seed Association,” and to establish a board of . sixteen directors,' who in their by-laws were designated as “Our Honorable Board of Directors.” These by-laws were seventeen in number, and the two most important of them were the second and third. In the second they agreed to “hold together as one body.”
“$200.
September 1, 1887.
“Thirteen months after date I promise to pay J. D. L. Wiley, or bearer, $200 at Springfield, Missouri, with interest at the rate of ten per cent, per annum from date, value received.
“I. L. Neill, “William Neill.”
The makers of this note were so well satisfied of the honesty of the payee, that they did not even demand the wheat before giving the note. They got something better than wheat. It was the following “ bond ” of the aforesaid “association:”
“No...... A BOND. No. Bushels, 60.
J. T. Stoner, Treas. S. S. Cox, Pres..
Alex. Kain, Supt. Alex. Kain, Yice-Pres.
R. E. Bailey, Secy.'
“MISSOURI AND KANSAS GRAIN AND SEED ASSOCIATION.
“ It is understood by and between the parties named in this bond and said company that the transaction covered by this obligation is of a speculative character, and not based on the real value of the grain.
*318 “Know all men by these presents that we hereby agree to sell sixty bushels of Ohio Hybrid wheat for Mr. Isaac L. Neill at $15 per bushel in cash or by note, less thirty-three and one-third-per-cent, commission, which we agree to take in notes of the purchaser, on or before September 1, 1888.
“ In testimony whereof, the said Missouri and Kansas Grain’ & Seed Association has caused this bond to be signed and sealed by the superintendent of said company this first day of September, 1887.
“This company will not be held responsible for any outside contracts made by agents other than those expressed on the face of this bond. This bond is void without the company seal and signature of the superintendent.
“[L. S.'] A. Kain,
“ Superintendent.”
They got also the verbal assurance, that the “ association ” had been duly incorporated, which was false in fact. They also in due time got the wheat; but it proved to be common Mediterranean wheat, worth no more than sixty cents a bushel. Immediately after receiving the note, the payee of it put it in the hands of another, who proceeded in search of a “ bona fide purchaser in good faith,” which he readily found in the person of this plaintiff, a gentleman in the habit of purchasing notes, who consented «to purchase it of him for the sum of $170, — thus realizing, as the note bore interest from date in case he succeeded in collecting it without the troublesome aid of a lawyer, interest at the rate of twenty-five per cent, per annum. Both parties, no doubt, became ultimately convinced that they had entered into a transaction of a “speculative character; ” for the defendants, finding that they had been made victims of a low and shallow fraud, refused to pay the note ; and the plaintiff has been obliged to resort for the collection of his note to a lawsuit.
We shall set out only those instructions of which the defendants complain. The first is as follows: .
“The court instructs the jury that, even though the note sued on in this action was procured from defendant and put in circulation by means of fraud, or false and fraudulent representations, made by Stoner, Bailey, Cox or Kain, yet the plaintiff was not bound or required, in buying the same, to make inquiry as to the consideration of the note, or the circumstances under which it was- signed by defendants, and, if he obtained it without specific knowledge of the facts and circumstances which impeach its validity as between the original parties, the plaintiff must recover for the reason among others, that, when one of two innocent parties must suffer for the wrongful act of another, the one who puts the wrong-doer in the position to obtain money from an innocent party must suffer.”
We do not understand that this instruction expresses the law. It is in accordance with the observation of the court in Johnson v. McMurry, 72 Mo. 282, which is as follows : “ When the general proof is made by the holder that he received the paper before due, bona fide and for value, it then devolves upon the maker to prove that the holder had actual notice of the specific facts which would render it originally invalid, otherwise, the plaintiff must recover.” A similar principle was announced in Mayes v. Robinson, 93 Mo. 122, in the following language; “Gross negligence even is not
The other two instructions of which the defendants complain, numbered 7 and 8, embody the same principle. The seventh tells the jury that, if they find a certain state of facts to be true, “then the note was obtained from the defendants by fraudulent means and representations, and is, also, void in the hands of any
These instructions were, therefore, also erroneous.
Pour instructions were requested by the defendant and refused by the court, and this refusal is assigned for error. In view of the instructions which the court gave, we do not think there was error in this refusal. We do not see that these instructions contain any principle, which it was necessary to convey to the jury in order to the proper determination by them of the issues. In so far as they embody the principle that bad faith on the part of the plaintiff might be shown by circumstantial evidence, that principle was ■well embodied in the ninth instruction given by the court.
But, although we do’not see that the fifth instruction, requested by the defendants and refused by the court, was covered by any instruction which the court gave, we have come to the conclusion that it was not error to refuse it. It was as follows :
“You are instructed that, while gross negligence is not alone sufficient to defeat the plaintiff’s right to recover, yet, if you find from the evidence that the plaintiff was grossly negligent in failing to inform himself as to the consideration for the note sued on, or as to the ownership thereof, when he purchased the same, then you will take that fact into consideration, together with other facts and circumstances in evidence in the case, in determining whether he purchased the note in good faith.”
But we think there was such evidence in the case. The plaintiff bought the ziote of a stranger to him early in the morning of the day after that on which it bore date. This man was not Wiley, who is mentioned in the note, but one Stoner. Stoner was introduced to the plaintiff by one Smith, of whom the plaintiff had previously bought some “life insurance notes, said to have been issued by a wild-cat insurance company at Carthage.” A witness, called by.the defendants, named Osborne, testified that, some time in August (this transaction was on the second of September), he had a talk with the plaintiff, and the plaintiff asked witness about the “Hybrid wheat” that was being sold in the county, and, also, about the financial condition of John Lee and Porter Lee ; “and said they had given their notes for wheat, and they would probably come here to be sold, and if he got a chance he’d buy the notes. He said the dog-oned scamps ought to be in the pen., but, if men were green enough to give their notes, he’d buy them.” Notes of other parties, given in similar transactions to the note in sziit, had been purchased by the plaintiff before he purchased this, and he knew that one of them had been given for wheat. He testified : “ When I bought this note of the Neills I asked them how they had two notes
Here we have testimony tending to show that the plaintiff knew that notes were being procured from farmers for wheat, under circumstances, which justified him in regarding them as “ green” for giving them. A note signed by a man whom he knew to be a farmer, which was given for consideration of grain, was offered to him by a stranger on the morning after it bore date. The stranger was introduced by a man of whom the plaintiff had previously bought “wild-cat insurance paper.” He knew that, if he made inquiries and learned that the note was procured from the makers by fraud, he could not enforce payment of it against them. He, of course, knew that, if the note was obtained from the makers by fraud, and he bought it as an innocent purchaser, he would, by his act, deprive, the makers of the note of all defense against it on the ground of fraud, and would thus assist the holder of the note in- cheating them, which they could not do without the aid of a bona fide purchaser of the note. Under these circumstances he bought the note at the discount already stated. We hold that these were circumstances, under which it was proper to allow á jury to say whether he acted honestly or dishonestly. It would not have been unreasonable for the jury to say, upon this evidence,
We, therefore, conclude that we must reverse the judgment and remand the cause. It is so ordered.