Court Opinion

ID: 8033406
Source: CourtListenerOpinion
Date Created: 2022-09-09 03:18:00.870403+00
Date Added: 2024-06-11T16:37:02.945815
License: Public Domain

Good, J.
An opinion was heretofore adopted in this case, ante, p. 667, where a general statement of facts may be found. On motion for rehearing the case has been reargued and resubmitted. We are satisfied with the holding in our former opinion, save in the respects hereinafter pointed out.
The action is one on a promissory note brought by the indorsee against the makers. Plaintiff took the note in question from the payee as collateral security for an usurious loan to him. There is evidence tending to show that the note was procured from the makers by the payee without consideration and through fraud. Therefore, in order to recover, it is incumbent upon plaintiff to prove that he became the holder of the note in due course, for value, and without notice of infirmity. In our former opinion we held, in effect, that the evidence upon this point was in conflict, and that the matter was properly submitted to *672the jury and its verdict was conclusive. One phase of the case was overlooked.
The evidence as to whether plaintiff personally had any knowledge of the defense to the note was in conflict, but the evidence discloses that in the negotiations for the loan from plaintiff to the payee, Newman, for which the note in question was taken as collateral, C. J. Phelps, a brother of plaintiff, and acting as his agent and attorney, conducted' the entire transaction. It is evident that if the agent who conducted the transaction resulting in acquiring title to the note had knowledge of the defense, such knowledge would' be attributable to his principal. Under the circumstances, it was not only incumbent on plaintiff to prove that he had no personal knowledge of the defense to the note, but it was likewise incumbent upon him to prove that his brother who acted as his agent in acquiring title to the note was also-without notice of any defense to the note. On this question the record is practically silent.
It follows that plaintiff has not carried the burden that the law imposes upon him, and for this reason the judgment of the district court must be reversed.
Our former opinion, in so far as it affirms the judgment of the district court, is vacated, and the judgment reversed and cause remanded for further proceedings.
Reversed.