Court Opinion

ID: 9688622
Source: CourtListenerOpinion
Date Created: 2023-08-24 17:58:47.090307+00
Date Added: 2024-06-11T18:18:40.700992
License: Public Domain

Currie, J.
(on motion for rehearing). Defendant’s counsel in his brief on rehearing states that in our former opinion we neglected to pass on his contention that the plaintiff finance company had failed to meet the burden of proof imposed on it by sec. 116.64, Stats, (sec. 59 of the N. I. L.), to establish that it was a holder in due course. The reason we did not discuss such issue is because we had assumed that defendant was only challenging plaintiff’s title because of lack of proof of an authorized genuine signature to the assignment, on the back of the instrument. Sec. 116.64 provides in part as follows:
*164a“. . . when it is shown that the title of any person who has negotiated the instrument was defective, the burden is on the holder to prove that he or some person under whom he claims acquired the title as a holder in due course. . . (Italics supplied.)
Fraud practiced by a party to a negotiable instrument to secure the execution of the same by another person makes the title of the former defective within the meaning of sec. 116.64, Stats. Wakem v. Schneider (1927), 192 Wis. 528, 213 N. W. 328; and Jones v. Brandt (1921), 173 Wis. 539, 181 N. W. 813. Therefore, in the instant case, because of the fraud practiced by Bierman-Turnacliff, Inc., upon the defendant Elsinger, the burden of proof was upon plaintiff to establish that it was a holder in due course.
Under sec. 116.57, Stats, (sec. 52 of the N. I. L.), which defines the prerequisite elements of the status of a holder in due course, the burden was upon plaintiff to prove that at the time it purchased the note:
(1) That the note was complete and regular upon its face;
(2) That plaintiff became the holder of it before it was overdue;
(3) That plaintiff took it in good faith and for value;
(4) That, at the time it was negotiated to plaintiff, plaintiff had no notice of any infirmity in the instrument or defect in the title of Bierman-Turnacliff, Inc.;
(5) That plaintiff took it in the usual course of business.
The note was offered in evidence as an exhibit and we find it complete and regular upon its face. The testimony of Kovacs, general manager of the plaintiff, adequately proved all of the other elements set forth in sec. 116.57, Stats., to establish that plaintiff was a holder in due course. We deem it unnecessary to summarize such testimony, except as to that relating to whether plaintiff, at the time it purchased the note, had notice of any infirmity in the instrument. As to this, *164bKovacs was asked the following question and gave .the following answer thereto:
“Q. Did you have any knowledge of any infirmity existing in these notes at that time? A. No.”
The word “you” appearing in the foregoing question is ambiguous in that it could refer to either Kovacs or the plaintiff finance company, and defendant’s counsel failed to cross-examine on this point. However, the trial court could rightly assume that the knowledge of Kovacs, as plaintiff’s general manager, and that of the plaintiff company were one and the same in the absence of any evidence to the contrary.
The actual purchase of defendant’s note by plaintiff was handled by a Miss Hansen, an employee in plaintiff’s office, during the temporary absence of Kovacs from the office. Because Miss Hansen was not called as a witness by plaintiff to testify, defendant’s counsel contends this in itself constituted a failure of proof by plaintiff on the issue of whether it was a holder in due course. We deem this argument to be fallacious as plaintiff had met its burden of proof through the testimony of Kovacs. If counsel for the defendant had any reason to believe that Miss Hansen, at the time she handled the purchase of the note, had obtained any knowledge of Bierman-Turnacliff, Inc.’s fraud which she had not communicated to Kovacs, counsel had the privilege of calling her as an adverse witness and examining her on such point. This counsel did not attempt to do.
By the .Court. — The motion for rehearing is. denied with $25 costs.