Court Opinion

ID: 6897167
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:51:02.749946+00
Date Added: 2024-06-11T16:06:02.402886
License: Public Domain

Opinion by
Mr. Justice Wolverton.
1. It is contended that the plaintiff is a bona fide holder for value of the note in question, acquired before maturity, and that he can be affected in his title thereto and right of recovery only by showing that he had notice or knowledge of any fraud which attended its inception or induced its execution and delivery, and that it was manifest error, prejudicial to plaintiff, to permit such evidence to go to the jury without tracing knowledge of the fraud to him; in other words, if he is a holder without notice of the fraud, proof of such fraud alone could not affect his right of recovery, and hence that such evidence was irrelevant and incompetent. The defense interposed is that plaintiffs alleged purchase is colorable only, and was made without consideration, after maturity, and therefore that plaintiff is not a holder for value, so that the question as touching both the relevancy and competency of the testimony complained of depends upon the further questions as to who has the burden of proof, and the nature of the testimony required to support, the affirmative. A promissory note, regular upon its face, and bearing the genuine indorsement of the payee, raises a presumption, disputable in its nature, — first, that it was given and indorsed for a sufficient consideration; and, second, that the indorsement was made at the time and place of the *489execution of the note, arid hence before maturity: Hill’s Code, § 776, subdivisions 21, 22. So that the simple introduction of a promissory note, with the indorsement shown to be genuine, creates a prima jade case for the indorsee, and he could safely rest without more, upon the presumption thus created in his favor that the note was both executed and indorsed for a valuable consideration, and at this stage it would not be incumbent upon such holder to show what of value he paid for the indorsement. But if it be shown on the part of the maker that the note was made under duress, or that it had its inception in fraud, or if such facts be shown as will raise a strong suspicion of fraud, a further burden will thereby be cast upon the indorsee to show under what circumstances and for what value he became the holder; that is to say, he must then show that he acquired the paper bona fide, for value, in the usual course of business, before maturity, and under such circumstances as to create no presumption that he had knowledge of the facts which tend to impeach its validity: 2 Greenleaf on Evidence (15th ed.), § 172; 1 Daniel on Negotiable Instruments, § 815; Kenny v. Walker, 29 Or. 41 (44 Pac. 501); Nickerson v. Ruger, 76 N. Y. 282; Kellogg v. Curtis, 69 Me. 212 (31 Am. Rep. 273); Commissioners v. Clark, 94 U. S. 285; Smith v. Livingstone, 111 Mass. 342.
2. It is sometimes difficult to determine what facts and circumstances, when shown, will be deemed sufficient to devolve this burden upon the holder, *490but we think that under the authorities sufficient has been shown here by the defendant to rebut the presumptions arising from plaintiff’s possession of the note, and to require a showing of the circumstances under which he purchased it, and the consideration paid therefor. See Rogers v. Morton, 12 Wend. 484; Cummings v. Thompson, 18 Minn. 246; Conley v. Winsor, 41 Mich. 253 (2 N. W. 31); McLaren v. Cochran, 44 Minn. 255 (46 N. W. 408); Perkins v. Prout, 47 N. H. 387 (93 Am. Dec. 449).
3. Now, the plaintiff, in the introduction of his proof, went farther than he was required to in order to establish his case in the first instance; he not only introduced the note with proof of the indorsement by Morales, but he showed also the circumstances surrounding the alleged fact of his purchase, which appearing fair and regular, it is contended that it was incompetent for defendant to show fraud in the inception of the note without showing that plaintiff had knowledge thereof. But can the plaintiff, by anticipating the defense, and voluntarily assuming the burden of showing good faith in his acquirement of the paper, prevent the defendant from introducing proof of such fraud, even though he should be unable to charge plaintiff with notice or knowledge thereof before his purchase ? We think not. The assumption of such burden by plaintiff did not admit the alleged fraud, and defendant was entitled to prove it as a substantive defense, to rebut the presumption which the law raises in favor of plaintiff’s holding for *491value and before maturity, and to cast a counter presumption that a note conceived in fraud would be quickly transferred to another to be sued upon. See Kenny v. Walker, 29 Or. 41 (44 Pac. 501.) The court below, therefore, properly admitted the proof of the alleged fraudulent inception of the note in controversy.
4. Another contention is that the court should have instructed the jury to find a verdict for plaintiff upon the ground that the testimony of himself, Morales, and Flood showed clearly that he was a bona fide purchaser of the note for value, before maturity, and without notice or knowledge of the alleged fraud, and that there was no evidence contradicting the same. Strahan, C. J., in Coffin v. Hutchinson, 22 Or. at page 556, (30 Pac. 424,) says: “Wbten there is no conflict in the evidence, no dispute as to the facts, there is nothing to submit to the jury, and the question is one of law to be decided by the court.” Assuming that the question raised is involved in this case, the attendant facts do not seem to bring it within this rule. While the defendant has not offered any testimony which disputes directly that offered by the plaintiff to show the bona fides of his purchase, the question of fraud atténding the inception of the note was submitted to the jury, and if, upon this question, they found the defendant’s contention to be true, a presumption was established against the good faith of the transfer; and, in addition to this, plaintiff’s testimony was in itself in some respects conflicting *492and contradictory, and was attended with circumstances calculated to discredit it, so that it cannot be said that there was no conflict in the evidence, or no dispute touching the facts, and hence it was perfectly proper for the court to submit the matter to the jury for their determination.
5. Before the cause was submitted the plaintiff requested an instruction as follows, namely, “ That the defendant having received said cigars, and having retained the same without objection, and having paid the first note given as part of the consideration for the purchase of said cigars on or about the twenty-first day of June, eighteen hundred and ninety-three, about four months after the same had been executed, and having made no objection to the payment of said note sued on in this action at the time the same was presented, about the twenty-first day of August, eighteen hundred and ninety-three, six months from the date of said note, nor having made any objection to said note until the eighth day of November, eighteen hundred and ninety-three, nearly nine months from the date of said note, that thereby the defendant was estopped from setting up said alleged fraudulent representations, or objecting ■ to the ■ payment of said note, for the reason that said acts on the part of defendant amounted to a ratification of said contract,” which request for said instruction was refused by the court, and an exception was then and there duly allowed. And error is predicated upon the action of the court in this regard. But the instruction is *493subject to the vice of assuming disputed facts to have been established, and was therefore rightly refused. The judgment of the court below will be affirmed, and it is so ordered. Affirmed.