
    The Discount & Deposit State Bank v. Litt et al.
    
      Negotiable instruments — Defense of knowledge of infirmities — Burden of proof on holder, when — Finding by jury conclusive, when — Reversals on weight of evidence — Charge to jury — Confined to issues pleaded and facts.
    
    1. A trial judge is not bound to give to the jury written charges before argument, which embody abstract propositions of law, however sound, unless they are applicable to the issues pleaded and the particular facts developed during the hearing.
    2. Where the defendant, in an action on a note, denies that the plaintiff became the owner in good faith before due, but on the contrary was aware of infirmity in the note and that defenses would be interposed thereto, and testimony is offered in support of these allegations, the burden of proof is cast upon the plaintiff to establish his title, if he has not already done so, by affirmative proof; and where the jury has found that the plaintiff did not become the owner of the note in good faith for value before maturity and without notice of defect in the title of the person negotiating it, a reviewing court will not reverse the judgment as against the weight of the evidence, unless the court is satisfied upon the whole record that the judgment is manifestly against the evidence.
    (Decided June 19, 1916.)
    Error : Court of Appeals for Knox county.
    
      Mr. Wm. Darroch and Messrs. Greer, Greer & Cromley, for plaintiff in error.
    
      Mr. W. A. Ho sack and Mr. L. C. Stillwell, for defendants in error.
   Houck, J.

Error is here prosecuted to reverse the judgment of the common pleas court of Knox county, Ohio.

The parties to this action stand in this court in the same position that they stood in the court below.

The action below was based on a promissory note for $1,100, executed and delivered by defendants, B. E. Litt and others, to one Will H. Ade, and claimed to have been duly sold, assigned and transferred to the plaintiff for a valuable consideration, before due. Said note was dated February 13, 1913, and in its petition plaintiff alleges that it is the owner and holder thereof, and entitled to recover said sum of $1,100, with interest.

The defendants filed an answer in which they set forth the following alleged defenses:

1. That said note was not-purchased by plaintiff before due, and that plaintiff is not now and never was the legal owner and holder of said note.

2. That said Will H. Ade, the original payee of said note, is the owner and holder of the same, and is indebted to these defendants in the sum of $2,850, in this, to-wit: That on the 3d day of September, 1912, the defendants purchased a certain stallion of said Will H. Ade, paying therefor the sum of $1,500, and that said Ade warranted said stallion to be a sure foal-getter, etc., and that they relied on said warranty; that said stallion proved to be worthless for the purposes for which they purchased him, and they were damaged in the sum of $2,850; and that as soon as they learned the defects of said stallion they so informed said Ade, and that he then promised to make said loss good, but has failed to do so.

3. That said plaintiff and said Ade, for the purpose of cheating and defrauding these defendants out of their said claim, or so much of it as is represented by said note in question, falsely represented and claimed that plaintiff had purchased said note before due for a valuable consideration.

The plaintiff filed a reply to the answer, being a general denial.

The cause was submitted to a jury and a verdict returned in favor of the defendants. The plaintiff filed the usual motion for a new trial, and the court overruled said motion, and a judgment was entered on the verdict.

The plaintiff in error seeks a reversal of the judgment below, and in its petition in error sets forth a number of grounds of alleged error, but in oral argument and brief seems to insist upon the following: That the court erred in its refusal to give certain special written charges before argument; that the court erred in its general charge to the jury; and that the verdict is against the manifest weight of the evidence and is contrary to law.

As to the special requests in writing presented by the plaintiff before argument and refused by the court, the plaintiff presented twelve requests, the court giving four and refusing eight. We are aware of the fact that a party to a lawsuit has the legal right to have given to the jury, before argument, such written propositions of law as he may request, provided such written propositions of law so requested to be given before argument properly state the law applicable to the case on trial. Mere abstract propositions of law, while sound as such, if not applicable to the issues raised by the pleadings and the particular facts in the case in which they are sought to be given, the court may without error refuse to give. We have examined with much care the charges which the court refused to give to the jury, and have no hesitancy in saying that as abstract propositions of law they are sound; but they are not applicable to the facts in this case, and therefore the trial judge committed no error in refusing* to submit them to the jury.

Counsel for plaintiff in error complain of the general charge of the court, wherein the court says:

“If you find that the defendant B. E. Litt had a valid claim for damages against Ade for the breach of the warranty for this horse Constant, and you further find that Ade knew of this claim of the defendant, and you further find that he sold the note to the plaintiff for the purpose of defeating and defrauding defendant out of his claim, if the jury finds all these facts, then the possession of the note endorsed by Ade raises no presumption as against this proof that plaintiff purchased the note without notice or defect in the hands of Ade. * * * Now if these facts have been established by the degree of proof required by law, then that casts upon the plaintiff in this case the burden of showing by some affirmative proof that it had no knowledge of any such defense to the note at the time it purchased it. However, gentlemen of the jury, it must clearly appear that when Mr. Ade sold this note his object and purpose was to defraud Mr. Litt. Fraud is never presumed, and when pleaded must be proven, and we cannot infer it. Of course, that may be proven by proving circumstances.”

We can not understand how the plaintiff in error can complain of the above proposition of law as given by the trial judge, in face of the fact that special requests Nos. 3 and 4, as below, were given to the jury by the court before argument at the instance of plaintiff below, plaintiff in error in this court:

“No. 3. One is a holder in due course who has taken the instrument under the following conditions :

“ ‘That it is complete and regular on its face.’

“ ‘That he became the holder of it before it was due, and without notice that it previously had been dishonored, if such was the fact.’

“ ‘That he took it in good faith, and for value.’

“ ‘That at the time it was negotiated to him he had no notice of any infirmity in the instrument or defect in the title of the person negotiating it.’ ”

“No. 4. The title of a person who negotiates an instrument is defective when he obtained the instrument or any signature thereto by fraud, duress, force and fear, or other unlawful means, or for an illegal consideration, or when he negotiates it in breach of faith, or under such circumstances as amount to a fraud.”

These two special requests in writing, given before argument at the request of the plaintiff, are sound in law and certainly cover every issue made by the pleadings and the evidence in the case at bar, and if there is anything in the general charge in conflict with these special requests plaintiff in error certainly has no reason now fo complain. We think if these propositions of law are properly applied to the evidence offered to determine the issues in this case they are clearly reconcilable.

The one important issue of fact to be determined in this case is, Was the plaintiff a purchaser of the note in question, before due? This was a question to be determined by the jury, under proper instructions from the court, and we think by special request No. 3 given before argument every phase of the case and the testimony was fully covered as to the law governing the question of who is a holder in due course. The jury, before it could return a verdict for the defendants, was compelled to find that the plaintiff was not a purchaser, before due, of th'e note in question, or that plaintiff had knowledge of the defenses claimed by defendants, or that Ade knew of them. If the jury found that Ade knew of the defenses and claims of the defendants, which it could have found under the evidence as disclosed by the bill of exceptions, then the law as given in special charge No. 4 was applicable. If the jury found that Ade knew of the claims and defenses of the defendants, and that this was clearly established by the evidence, which from the bill of exceptions seems clear to us, then, inasmuch as the defendants in their answer denied that plaintiff was the owner of the note in due course and alleged that it had knowledge of the defense and claims of defendants, and submitted proof in support of these allegations, it devolved upon the plaintiff, if it had not already established its claim by affirmative proof, to rebut the evidence offered by defendants in this regard.

The burden of proof of making out good faith in this case under the facts here disclosed is, we think, with the plaintiff. It asserts title as a bona fide holder in due course, before due, and evidence has been offered by the defendants denying this claim. It makes no difference whether the plaintiff pursued the usual course required to establish its claim or not, it must in order to secure the advantages which commercial law confers upon holders of negotiable paper bring itself within the rule. Purchasers of such instruments are entitled to the benefits of that rule only when they have purchased such paper in good faith, in the usual course of business, before maturity, and without notice of any defects or infirmities therein, or any legal and valid defenses thereto.

As to the weight of the evidence, it is expected in cases- like the one at bar that the purchaser will testify as to his good faith and want of notice, and the defendants are compelled to rely upon circumstances and surroundings to rebut such evidence. Whether the plaintiff in this case has satisfied this burden resting upon it, and whether it has made good its claim as purchaser before due, and without notice of any defects in the title to, infirmities in, or defenses to, the note in question, were questions of fact to be determined by the jury; unless the testimony is not only consistent with the good faith of the plaintiff but is such that no fair-minded person can draw any other inference therefrom. The jury saw the witnesses and passed upon their credibility, their interest in the case, the reasonableness or unreasonableness of their statements, the time, place and manner of the transaction, its conformity to or its departure from ordinary methods of business, and all the facts and circumstances in the case, some of which may be slight, but' which when taken together aid in the proper determination of the transaction between the parties hereto; all of which a court can not pass upon as a matter of law.

A reviewing court will not disturb a verdict on the ground that it is against the weight of the evidence, unless upon an examination of all the testimony offered, and upon the whole record, it is satisfied that it was against the manifest weight of the evidence. And not being so satisfied, we will not interfere with the judgment entered on the verdict in this case.

The plaintiff in error, in brief and oral argument, insists that the trial judge erred in not instructing the jury properly and fully as to the law governing the rights of an indorsee of a promissory note with reference to the presumption as to whether or not it was transferred by the owner to the transferee or indorsee, before due.

Before argument, and at the request of the plaintiff below, now the plaintiff i.n error, the trial judge gave to the jury special written request No. 1, the same being as follows:

“Except when an endorsement bears date after maturity of an instrument, every negotiation is deemed prima facie to have been effected before the instrument was due.”

We think this is a sound principle of law, applicable to the facts in this case, and fully covers the issue as to this particular question made by the pleadings and facts in this case, and therefore we do not understand how the plaintiff in error has any cause for complaint in this regard.

Whether or not the bank was the owner and holder of the note in question in due course, purchased before due, and for a valuable consideration; whether or not it knew at the time it purchased the note of the alleged claim and defenses of the defendants thereto; whether it had any knowledge of any defects or infirmities of said note at the time it purchased same; all of these propositions, and the good faith or lack of good faith of the bank with reference to the entire transaction, were questions of fact to be determined by the jury under proper instructions from the court.

From an examination of the bill of exceptions we are free to say that upon some of the questions of fact the testimony was somewhat conflicting, and no doubt different minds might reasonably arrive at different conclusions therefrom. Yet the jury having reached its conclusion under proper instructions from the trial court as to the law governing the facts in this case, as evidenced by the charges given to the jury before argument, as contained in the written requests of the plaintiff below, as well as under proper instructions as to the law applicable to this case, as contained in the general charge of the trial court, it is not the duty, nor is it within-the province, of a reviewing court to say that the verdict of the jury was wrong.

As disclosed by the bill of exceptions and the record, which consists of nearly 250 pages of typewritten matter, we are led to believe from our examination of the same that the case was warmly contested in- the trial court, and it necessarily follows that some technical errors have found their way into the record, but none prejudicial to the rights of the plaintiff in error.

Upon our examination of the entire record in the case at bar we feel that substantial justice has been done to all parties in interest in this lawsuit. We find no error apparent on the record prejudicial to the rights of plaintiff in error.

A majority of this court is of the opinion that the judgment of the common pleas court should be affirmed.

Judgment affirmed.

Shields, J., concurs.

Powell, J., dissents.  