Hallock v. Young

The defence made to the notes was that they were invalid because of Goss' fraud in obtaining them; and the verdict shows that the fraud was proved. There being this infirmity in the notes originally, the plaintiff, to entitle himself to a verdict, must prove that he was a bona fide holder of them for value, and obtained them before maturity in the regular course of business, without knowledge of the infirmity or of facts that would reasonably put him upon inquiry concerning the same. Clark v. Pease,41 N.H. 414, 428; Garland v. Lane, 46 N.H. 245; Perkins v. Prout,47 N.H. 387; Savage v. Goldsmith, 181 Mass. 420; Lytle v. Lansing, 147 U.S. 59. Mere suspicion on his part that there was infirmity in the notes would not be sufficient to show that he was not a bona fide holder, or to put him upon inquiry concerning their original character. Perkins v. Challis, 1 N.H. 254; Crosby v. Grant,36 N.H. 273, 281; Green v. Bickford, 60 N.H. 159; Limerick Nat'l Bank v. Howard, 71 N.H. 13; Smith v. Livingston, 111 Mass. 342; Goodman v. Simonds, 20 How. 343. The question as to the character of his holding arises upon his motion to have a verdict directed in his favor. His exception to the denial of the motion raises the question whether there was any evidence before the jury from which they could properly find that he was not a bona fide holder.

The evidence relating to the character of his holding comes mostly from the plaintiff himself and his witness, Cooper. It is, in substance, that he purchased the notes of Goss before their maturity, with no knowledge concerning the character and financial ability of the makers, except what Goss gave him, and no knowledge of Goss' financial ability, and slight and apparently very unreliable knowledge of his character, and gave therefor a horse and $500 in money. If this truly represents the transaction, the plaintiff is a bona fide holder of the notes within the meaning of the law of this state. He was not required, as a matter of law, to make inquiries concerning the character and financial standing of the parties to the notes, nor to act as a reasonably prudent person would act in making the purchase. Even if the circumstances excited his suspicion concerning the validity of the notes, the law did not require him to desist from the purchase on that account, nor to investigate the matter with a view of ascertaining whether his suspicion was well grounded or not. All that was required of him was that he should act honestly and in good faith. If he so acted, his title with its attendant rights must be upheld, although his action was imprudent and unusual. It was said in the leading case on the subject in this country, that "every one must conduct himself honestly in respect to the antecedent parties when he takes negotiable paper, in order to acquire a title which will shield him against prior equities. While he is not obliged to make inquiries, he must not willfully shut his eyes to the means of knowledge which he knows are at hand, . . . for the reason that such conduct, whether equivalent to notice or not, would be plenary evidence of bad faith." Goodman v. Simonds, 20 How. 343, 366. See, also, Lytle v. Lansing, 147 U.S. 59, 71. While negligence of the holder, though gross, will not of itself deprive him as matter of law of the character of a bona fide holder, it may be evidence of bad faith. Goodman v. Harvey, 4 A. E. 870. See, also, Canajoharie Nat'l Bank v. Diefendorf, 123 N.Y. 191. Suspicious circumstances attending the transaction, though, as above stated, insufficient in and of themselves to prevent the holder from having the rights of a bona fide holder, are proper matters for the consideration of the jury on the question of his good faith. Smith v. Livingston,111 Mass. 342, 345; Sullivan v. Langley, 120 Mass. 437. In applying the general rule by which such evidence is competent upon questions of good faith, the law does not except a case of this kind.

It is said in behalf of the plaintiff that his testimony is not contradicted and consequently should be accepted as the truth. Whether it shall be so accepted or not is, under the circumstances disclosed by the case, a question of fact, to be determined by the jury, and not a question of law. "They were at liberty to disregard it altogether, if in their judgment it was intrinsically improbable, or if it was stamped with or inherently furnished indications of unreliability." Williams v. Huntington,68 Md. 590, — 13 Atl. Rep. 336; Canajoharie Nat'l Bank v. Diefendorf,123 N.Y. 191, 200. To determine its quality as to truthfulness, they were at liberty to take into consideration the selfish interests of the witness, his appearance upon the stand, the consistency of one portion of his testimony with other portions and with facts otherwise proved, and the reasonableness of the testimony, viewed in the light of their general knowledge derived from experience and observation in the affairs of life. There comes to mind in this connection the plaintiff's answer to the inquiry as to where the purchase of the notes took place, — that it was "somewhere there in the neighborhood; I don't recall where." The jury might think that a farmer, who had never purchased a note before, would be able to be more definite with reference to such an important transaction, occurring only a little more than four years previously. The circumstances that the plaintiff took no steps to ascertain whether the notes could be collected of the makers until after the second one was returned protested, — this being about a year after the first one was returned unpaid, — that he brought no action upon the notes until after they all became due, and that he took very little interest in looking up Goss, were proper matters for consideration upon the question of the good faith of his holding of the notes. There were other circumstances disclosed in the testimony having a bearing that was adverse to the plaintiff's position, but it is unnecessary to specify them. It is sufficient for the present purposes that the evidence was not uniformly and convincingly in favor of the plaintiff, but was such that impartial and fair-minded men, upon consideration of it, might properly find one way or the other, according as they regarded its character as to truthfulness and weight. The circumstances of the transaction were such that the question of the plaintiff's good faith in acquiring title to the notes was peculiarly appropriate for the determination of a jury, under proper instructions relating to the plaintiff's rights. As no exceptions were taken to the court's charge to the jury, it must be assumed that it was satisfactory to the parties. The plaintiff's exception to the denial of his motion to direct a verdict in his favor is overruled.

Another question for consideration is whether the conduct of counsel in the closing argument was within the province of legitimate advocacy; and if not, whether it was prejudicial to the plaintiff and so rendered the trial unfair. There was evidence that Goss and the plaintiff each dealt in horses to some extent; that Goss cheated the defendants in the sale of the stallion for which they gave the notes in suit; that Cooper heard he once attempted to sell a horse to a company in the vicinity of Riverhead; that the plaintiff imported the stallion which he sold to Goss, and had sold a few other horses which he raised. In view of this testimony, it cannot be held that counsel went outside his legitimate province in the instance to which the last exception was taken. The most that can be said of it is that he went dangerously near the line. But it is beyond question that the counsel crossed the line when he made reference to the plaintiff as "the man who foisted upon the innocent public the notorious horse Magnet." This statement forcibly implies that the horse was notable in a bad sense, and charges the plaintiff with palming him off on the public as a kind of horse that he was not in fact. There was no evidence whatever that the horse was notable in a bad sense, except perhaps in the implications contained in some of the counsel's questions to the plaintiff; nor that the plaintiff made any representations in relation to him that were not true; nor as to what became of him, whether he has troubled the public or not. The statement is not an argument based upon facts that were proved, but is a statement of facts that were not proved. It had a natural tendency that was prejudicial to the plaintiff in two ways: it tended to prove that the plaintiff did not give full value for the notes, and that he was a dishonest man. As the counsel did not withdraw the remark when his attention was called to it by the exception, and procure a finding of the court that it did not prejudice the plaintiff in fact, as is required by the well established rule of law in order to cure such an error, the verdict must be set aside in consequence of it.

Exception as to the statement of counsel in argument sustained: the other exceptions overruled.

All concurred.