Citation Numbers: 185 Ky. 357
Judges: Sampson
Filed Date: 10/14/1919
Status: Precedential
Modified Date: 7/24/2022
Opinion of the Court by
Affirming.
This suit was instituted by the Commercial Security Company, incorporated, of Chicago, Illinois, on two promissory notes of $625.00 each, alleged to have been executed and delivered by George Bernhard to the Partin Manufacturing Company in April, 1916. Bernhard resisted payment upon several grounds: (1) the security company is a foreign corporation with no known place of business in Kentucky, and no authorized agent or agents in this state upon whom process could be served, and therefore without authority to transact business in the state, or to maintain this action; (2) the Partin Manufacturing Company is a foreign corporation with its principal office in the state of Tennessee, and no office or place of business in the state of Kentucky, and no agent upon whom process can or could be served, and therefore not entitled to maintain this aetion; (1) that the two instruments sued on were fraudulently changed by the Partin Manufacturing Company or appellant Commercial Security Company after they had been delivered by appellant to the agents of the Partin Manufacturing Company and without his knowledge or consent, by raising the sums payable from $225.00 to $625.00, each; (5) there was no consideration for the execution of said notes, or either of them; (6) the contract which was the consideration for the execution of the notes was vicious, against public policy, and void. Appellant in his brief relied upon only two of the grounds mentioned; (a) the fraudulent change of the sums named in the notes from $225.00 to $625.00; (b) the Commercial Security Company did not take and does not hold the two notes in due course and without notice of the fraudulent scheme through which they were obtained. The other contentions set forth above have all been disposed of adversely to appellant in other similar oases before this court.
These notes arise out of one of the usual popularity .contest schemes for advertising'frequently resorted to by
From the evidence it appears that the Partin Manufacturing Company does not in truth and in fact manufacture anything except schemes and devices to separate unsuspecting persons from their money. It had several predecessors which, in turn, faded from the public view to be followed immediately by a similar concern under a different name but manned by the same crew. Partin, the head of the Partin Manufacturing Company, has been a moving spirit in several other concerns with high sounding titles, all engaged in the same business as the Partin Manufacturing Company. Appellee, Commercial Security Company is also a corporation with headquarters in Chicago, 111., and it is engaged in buying and handling negotiable paper. While the evidence does not fully establish it, we strongly suspect that the security company through its managers is in a conspiracy with the Partin Manufacturing Company and its managers to take over for collection all negotiable paper which the Partin Manufacturing Company and its predecessors were able by different schemes and through questionable means to obtain from merchants throughout the country. If this fact was established by the evidence, it would afford the court an opportunity to cancel the contract and the notes sued on. While appellant Bernhard insists that such relation exists between the two concerns, the evidence does not quite measure up to the test.
The notes were obtained in this wise: Bernhard is a shoe merchant and has a place of business in Paducah; he had one clerk in April, 1916, who worked in the store'; two representatives of the Partin Manufacturing Company entered the store and proposed to sell to Bernhard
There was some other evidence which corroborated the testimony of the agents. It appears that at the time Bernhard was purchasing the plan, five other merchants in the city of Paducah were doing the same thing and at the same price. The Partin Manufacturing Company, through its agents, agreed to send a man to Paducah to conduct the contest and do the advertising ancS help carry out the plan. In due course the representative ol'
The case turns upon the two questions of fact: (a) were the notes fraudulently increased, (b) and did the security company take the notes for value before due without knowledge or opportunity for knowing that they had been obtained through fraud or misrepresentation? There was no evidence on the part of appellant that the security company knew of any infirmity in the paper or any defense thereto, at the time it became the owner thereof, but all the evidence given on that subject is to the effect that the security company purchased the notes for value before maturity and without any intimation of any infirmity or defect therein. If the trial judge had been convinced that the notes had been altered and the sums payable materially increased, his judgment would have been for the appellant Bernhard; or if it had appeared to that court from the evidence that the security company had taken the notes sued on with knowledge of any infirmity therein, or after the same had become due, or without value, he would have sustained appellant’s plea because either of the aforementiond grounds would have been sufficient to have warranted the court in entering a judgment in favor of Bernhard. Prom the judgment we conclude that the court was of opinion' that the weight of the evidence sustained appellee company, and, therefore, awarded judgment in its favor against Bern ■ hard. We are not prepared to say that the court was not fully warranted in so concluding. However this may be, in common law cases, such as this, where questions of
Judgment affirmed.