Case Title: Hendrickson v. Alpert

Citation: 412 P.2d 433

Docket Number: 

State: colorado

Court: Colorado Supreme Court

Date: 1966-03-28T00:00:00Z

Document:
412 P.2d 433 (1966) Harry J. HENDRICKSON, Plaintiff in Error, v. Sanford ALPERT, and Joanna Shew, as Public Trustee of Las Animas County, Colorado, Defendants in Error. No. 21349. Supreme Court of Colorado, En Banc. March 28, 1966. Franklin W. Azar, Trinidad, for plaintiff in error. Arthur W. Zarlengo, C. Mert Reese, Denver, for defendant in error Sanford Alpert. DAY, Justice. We will refer to the parties by name. Hendrickson instituted an action in the district court of Las Animas County to enjoin the public trustee from selling the former's property under foreclosure proceedings instituted by Alpert. The latter had purchased a $30,000 promissory note which Hendrickson had made to Waco Oil Corporation through its president and alter ego, one Griffith. Security for the note was a *434 $60,000 parcel of improved property owned by Hendrickson and located in Trinidad. The factual situation surrounding the making of the note and trust deed and delivery to Waco Oil through Griffith; the latter's action in trying to dispose of the note before finally selling it to Alpert for a $5,000 discount; the involvement of many people, including attorneys at the "closing"; and finally the assignment of the note to Alpert and the payment of $25,000 is all so involved and of such inordinate length that to detail the facts would serve no useful purpose and would only tend to unduly prolong this opinion. From the evidence the court found that Griffith and Waco Oil had obtained the note from Hendrickson by fraud and deceit. However, on the sole issue before the court as to whether Alpert was a "good faith" holder of a negotiable instrument in due course, the court found that he was. In its finding the trial court noted that: Judgment was therefore entered denying the injunctive relief sought. Although contending that the evidence does not support the court's findings and asserting that Alpert failed to sustain the burden of proof required of him to show that he purchased the note in good faith without notice of any infirmities, the thrust of Hendrickson's argument is that we should determine, as a matter of law from the totality of the circumstances, that Alpert acted in bad faith in purchasing the Hendrickson note. This we decline to do in the face of the conflict in the evidence on some of the matters which are urged in support of Hendrickson's argument. Even as to the matters not in dispute, we believe that reasonable men could differ as to whether Alpert can be charged with bad faith in purchasing the note. Whether the purchaser of a negotiable instrument had knowledge of such facts that his taking of the instrument would amount to bad faith, is normally a question of fact. A concise statement of the law in this regard may be found in Gramatan National Bank and Trust Co. v. Beecher, 122 Vt. 366, 173 A.2d 163, as follows: The court in sifting the evidence had certain well-defined guidelines in the Colorado law. C.R.S.1963, 95-1-56, states: In interpreting the foregoing section, we quoted with approval in Hukill v. McGinnis, 70 Colo. 455, 202 P. 110, the following *435 from Merchants' Bank v. McClelland, 9 Colo. 608, 13 P. 723: For a succinct definition of what constitutes "bad faith" see Burnham Loan & Investment Co. v. Sethman, 64 Colo. 189, 171 P. 884, L.R.A.1918F, 1158, wherein the following pertinent statement is set forth: Among the facts and circumstances that were probably persuasive in the mind of the trial court, as trier of the facts, was undisputed evidence that Alpert acted through attorneys, who, in turn, contacted Hendrickson's attorney as well as Griffith's counsel, both of whom were present when the original note and deed of trust were executed. Hendrickson's attorney was present at the closing transaction when Alpert purchased the note, claiming that Griffith had an obligation to Hendrickson to pay his attorney fee as part of the agreement with Hendrickson. Seven hundred fifty dollars of the money paid by Alpert to Waco went to Hendrickson's attorney. Neither inquiry of Hendrickson's attorney nor of Hendrickson himself would have disclosed any infirmities in the note because both believed at the time that the consideration for the note and deed of trust passing from Waco Oil was genuine and not spurious. It was not until several months later that the fraud practiced by Waco on Hendrickson was discovered. Even after discovery of the fraud Hendrickson promised Alpert that he would pay off the note. A letter was introduced into evidence from Hendrickson's attorney requesting an extension of time and indicating that an effort would be made to discharge the obligation because Hendrickson expected to get the money from Griffith. The foregoing is sufficient to support the determination of the trial court that Alpert did not act in bad faith. Accordingly, on the basis of well settled authority, we cannot disturb the findings of the trial court. The judgment is affirmed. MOORE, J., not participating.