Menges v. Robinson

BARNARD, P. J.

The plaintiff brought this action on a note for $5,000 dated August 18, 1931, due six months after date, payable to “Myself”. The note was signed and also indorsed on the back by all of the defendants except Chas. F. Carrere, and was also indorsed “Without recourse, Chas. F. Carrere”. It is alleged in the complaint that the note was made, executed and delivered to Chas. F. Carrere and that it was by him indorsed to the plaintiff in good faith in the usual course of business and for a valuable consideration. ' The defendants Mott and Bosch answered setting up failure of consideration and partial failure of consideration, and also alleging that the plaintiff fraudulently conspired with the said Carrere to obtain said note for a nominal consideration and that the plaintiff took the note with full knowledge and notice of all equities between Carrere and the other defendants. The jury returned a verdict in favor of the plaintiff for $1,000 and from the judgment which followed the plaintiff has appealed.

[163]

The main grounds for reversal urged are that the evidence conclusively shows that the appellant was a holder in due course and that the court erred in permitting testimony with reference to what had occurred prior to the execution of the note. It appears that Carrere was a stock salesman with whom the appellant had been doing business for about two years prior to this transaction. On at least two occasions the appellant bought certain “aeroplane stock” through Carrere, and later, through him, traded this stock for certain shares of stock in the Commonwealth Mining Company. While the appellant testified that he was and had been the owner of these several blocks of stock none of said stock had ever been transferred to his name on the books of the respective corporations, and all thereof had been carried at all times in the name of Carrere. There is evidence that the mine supposed to be operated by the Commonwealth Mining Company was an old abandoned mine in Idaho; that a part of the tunnels was caved in; that the timbering was rotted out and caved in in places; that the mine was in an unsafe condition; that there was no work going on; and that no dividends had ever been paid on the stock.

Shortly before the note here in question was executed the appellant visited this mine and decided, as he testified, that he “would like to get rid of” his stock. He also testified that he talked to Carrere about disposing of this mining stock for him and that Carrere told him “he might possibly be able to sell my stock for me”, and that he “told me he would get me out of this deal”. About that time Carrere approached the other defendants, who had organized another mining company and desired to raise money with which to operate, and told them that if they would give him a note for $5,000 he could and would dispose of it for that amount of cash and thus furnish them with the means of operating. This resulted in the execution of the note here in question which was given to Carrere to sell for $5,000, and by him turned over to the appellant a few days later. The appellant testified that he gave Carrere a check for $1500 and 7,000 shares in the Commonwealth Mining Company for the note. However, the appellant’s shares stood in Carrere’s name on the books of the corporation and it does not appear that any transfer was ever made. Carrere turned over to one of the makers of the note other than these respondents $500 in cash