Case Name: METROPOLITAN DISCOUNT COMPANY v. GEORGE M. BAKER
Court: Supreme Court of North Carolina
Jurisdiction: North Carolina
Decision Date: 1918-12-04
Citations: 176 N.C. 546
Docket Number: 
Parties: METROPOLITAN DISCOUNT COMPANY v. GEORGE M. BAKER.
Judges: 
Reporter: North Carolina Reports
Volume: 176
Pages: 546–547

Head Matter:
METROPOLITAN DISCOUNT COMPANY v. GEORGE M. BAKER.
(Filed 4 December, 1918.)
Negotiable Instruments — Acceptances — Purchaser — Fraud—Due Course— Vendor and Purchaser — Evidence.
In an action to recover upon an acceptance of which the plaintiff claims to be a holder in due course, and there is evidence to show it was given in the purchase of jewelry by sample; which upon delivery was ascertained to be of very inferior or unmerchantable quality and not according to the sample, and the action is defended upon the ground that the sales agent had perpetrated a fraud therein upon the acceptor of the paper: Held, the burden was upon the plaintiff to show that he was a purchaser in due course, before maturity, in good faith, for value, without notice of the infirmity of the instrument, etc. (Revisal, sees. 2201, 2208) ; and evidence of the defendant as to its price, inferior quality, or that it was not up to the standard and had been refused by his customers, etc., is competent.
Appeal by plaintiff from Gline, J., at July Term, 1918, of Mitchell.
Charles E. Greene for plaintiff.
No counsel for defendant.

Opinion:
Clark, C. J.
Tbis is an action begun before a justice to recover on five acceptances of $40, each executed to the payee therein, the National Novelty Import Company, of St. Louis, Mo. It appears that the salesman of said company came to the defendant's place of business in Bakersville, N. C., and sold him silverware and jewelry, by sample, for which these acceptances were given. The defendant testified that when the articles came they were very inferior and not up to the sample, and the jury find that the execution of the acceptances were procured by the false and fraudulent representations of the National Novelty Import Company.
The court instructed the jury that if the plaintiff bought the acceptances in the open market, in a fair and honorable way, as negotiable paper in tbe ordinary course of trade, tbat is in good faitb and before maturity for valuable consideration, to so find. Tbe plaintiff company resides in St. Louis, where tbe payee of these notes also resides. Tbe jury found tbe second issue in tbe negative.
Tbe only exceptions are tbat tbe court permitted tbe defendant to testify' from whom he bought tbe silverware, and bow much be paid for it; tbat .the silverware was permitted to be exhibited to tbe witness, who was allowed to state tbat it was not a standard brand; tbat be was also permitted to state tbat be offered tbe jewelry for sale, and tbat it was inferior, and tbat be would not have purchased it if be bad known its quality. All these exceptions were upon tbe first issue, and tbe evidence was competent as tending to show tbe fraud perpetrated by tbe agent in tbe sale of tbe goods. It seems strange tbat tbe defendant gave bis acceptances before tbe goods came.
Tbe plaintiff claimed, however, tbat it was a purchaser in due course, having taken tbe paper before maturity in good faitb and for value, and tbat it bad no notice of any infirmity in tbe instrument or defect in tbe title of tbe person negotiating it, and therefore is entitled to recover. Revisal, 2201. Tbe jury have found tbe second issue to tbe contrary, and there is no exception as to tbat issue nor to tbe charge, nor for any refusal to charge.
Tbe defendant having pleaded fraud as to tbe execution of tbe paper and introduced evidence, tbe burden was upon tbe plaintiff to prove by tbe greater weight of tbe evidence tbat it was a bolder in due course, for value, and without notice. Revisal, 2208; Campbell v. Patton, 113 N. C., 481; Mfg. Co. v. Summers, 143 N. C., 109; Bank v. Fountain, 148 N. C., 590; Park v. Exum, 156 N. C., 228; Bank v. Walser, 162 N. C., 62; Trust Co. v. Ellen, 163 N. C., 46; Smathers v. Hotel Co., 168 N. C., 72; Bank v. Branson, 165 N. C., 344.
No error.