Court Opinion

ID: 7809135
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:10:39.903534+00
Date Added: 2024-06-11T16:30:25.142027
License: Public Domain

HART, J., (after stating the facts),. The note in question was transferred to the plaintiff bank for value before its maturity. ' It is earnestly insisted by counsel for thev plaintiff that the note sued on was negotiable in form under our Negotiable Instrument Law (Acts of 1913, p. 270), and that the court erred in not so stating to the jury. But the views we shall hereinafter express make it unnecessary for us to decide this question. The trial court was evidently of the opinion that the note was not negotiable; for in its general instructions to the jury it refused to submit the question of whether or not the plaintiff was an innocent holder before maturity for value and in the usual course of business. The court submitted the case to the jury on the question of the false representations of the salesman of Donald-Richard Company. Among other instructions at the request of the defendant it gave the f ollowing: “If you find from the evidence that defendant was induced to buy the goods by reason of false and fraudulent representations of the salesman of Donald-Richard Company, and if you further find that defendant offered to return the goods within a reasonably fit time after discovering such fraud, then your verdict will be for the defendant. ’ ’ The plaintiff asked the court to give the following instructions: “No. 3. Fraud is a material false representation, made with a knowledge of its falsity, or a reckless disregard of whether it is true or false, intending that the party to whom it is made shall rely upon it, and the party to whom it is made must have the right to rely upon such statements, and he must rely upon them, and so relying act upon them to his injury.” “No. 4. By material misrepresentation is meant a false statement about existing or past facts, as distinguished from expressions of opinion of what could be done in the future; statements that goods were salable or would increase sales, and bring business are mere matters of opinion and do not constitute fraud.” (1) Tbe court gave instruction No. 3 but modified instruction No. 4, by striking therefrom tbe words “were salable or.” Tbe court did not err in giving tbe instruction on tbis phase of the case asked by tbe defendant nor in striking from tbe instruction No. 4 as asked by tbe plaintiff tbe words'“were salable or.” Tbe company manufactured tbe goods which it offered for sale. Its place of business was in another State. Tbe buyer bad no opportunity to inspect tbe goods before he purchased them and bad a right to rely upon the representations made by tbe seller of goods of his own manufacture. In such cases tbe law implies a warranty that tbe articles shall be merchantable and reasonably fit for tbe purposes for which they were intended. Main v. Dearing, 73 Ark. 470; Main v. El Dorado Dry Goods Co., 83 Ark. 15; American Standard Jewelry Co. v. Hill, 90 Ark. 78; and Metropolitan Discount Co. v. Fondren, 121 Ark. 250. (2) Tested-by tbe principles' of law laid down in these cases it is perfectly evident from tbe testimony recited in tbe statement of facts of tbe witnesses for the defendant (and which need not be repeated here) that tbe evidence is legally sufficient on tbis phase of tbe case, to warrant tbe verdict. Tbis being true it becomes immaterial to decide whether or not tbe note sued on was ne-' gotiable in form under our Negotiable Instrument Act; for, if it be assumed that the note was negotiable in form still tbe court was right in rendering judgment in favor of tbe defendant on tbe general verdict. We have copied into tbe statement of facts tbe special interrogatory submitted to tbe jury and tbe answer thereto. Under tbis tbe court submitted to tbe jury the question of whether or not tbe plaintiff was an innocent purchaser. Section 6207 of Kirby’s Digest, provides that in all actions tbe jury may be required by tbe court in any case in which they render a general verdict to find specifically upon a particular question of fact to be stated in writing and that this special finding is to he recorded with the verdict. Section 6208 provides that .when the special finding of fact is inconsistent with the general verdict, the former controls the latter, and the court may give judgment accordingly. So it will be seen that under our statutes, a general verdict for the defendant imports a finding in his favor upon all the issues in the case which are consistent with the special findings returned by the jury. Little Rock & Ft. Smith Ry. v. Miles, 40 Ark. 298, and Mauney v. Millar, 117 Ark. 633. There is no inconsistency in the present case between the general and special verdict. Indeed, the latter aids the former.. (3) It is contended by counsel for the plaintiff that the special finding of the jury was based upon the theory that the note was non-negotiable. "We do not agree with counsel in this contention. The jury specifically answered that the plaintiff was not an innocent purchaser. ' The court in framing the interrogatory defined an innocent purchaser of a note to be one who obtains it in due course of business, for value before maturity, in good faith without notice of any defenses the maker might have had to it. The jury must have had in'mind this definition of an innocent purchaser when it made its special findings. It is well settled that when a question of consistency between the general verdict and the special one arises, nothing is presumed in aid of the special findings, while every reasonable presumption is indulged in favor of the general verdict. Morrow v. Bonebrake, 84 Kan. 724, 34 L. R. A. (N. S.) 1147, and Kafka v. Union Stock Yards Co. (Neb.), 110 N. W. 672. Mr. Thompson says that, if possible, the special findings will be interpreted so as to support the verdict rather than overturn it. Thompson on Trials, (2 Ed.), Sec. 2693. (4) Finally it is insisted that there is no testimony in the record upon which to base the finding that the plaintiff was not an innocent purchaser for value. But we can not agree with counsel in this contention. It is true that the cashier of the bank testified that his bank purchased the note sued on for value in the usual course of business before maturity and that at the time he did not know for what the note was given or that the defendant had any defense to it. On cross-examination, however, the cashier detailed a state of facts which tended to contradict this testimony and from which the jury might have found that the bank was not an innocent purchaser for value. The bank had been extensively engaged in purchasing notes of between one hundred and two hundred dollars in amount for several years prior to the transaction in question. It knew that the company was engaged in the wholesale manufacture and sale of toilet articles to merchants in various parts of the country. More than five hundred notes of about the same amount as the note sued upon had been transferred by the company to the bank during the past few years. These notes were given by persons scattered over different states. No investigation of their financial standing was made by the bank when the notes were transferred to it, except to ask the manufacturing company if the makers were solvent. The cashier stated that he understood in a general way that the notes were customers ’ notes; that he had been a witness in from twenty-five to fifty suits on notes of this kind during the past few years and that the defense of fraud similar to the defense made in the present case had been set up in about twenty-five per cent of these cases; that the bank had been successful in from seventy-five to eighty-five per cent, of them; that the manufacturing company was required to put $1.25 in collateral in notes for every $1.00 furnished by the bank; that the company paid .all the expenses of suit when it was necessary to sue on the notes. The bank and the manufacturing company were engaged in business in the same city and under the circumstances detailed above the jury was warranted in finding that the bank was not an innocent purchaser of the note sued on. Holland Banking Co. v. Booth, 121 Ark. 171; First National Bank of Iowa City v. Smith (Col.), 136 Pac. 460; Johnson County Savings Bank v. Rapp (Wash.), 91 Pac. 382, and Johnson County Savings Bank v. Gregg, 117 Pac. 1003. It follows that the judgment must be affirmed.