Sutherland v. First Nat. Bank

Opinion by JONES, C. This action was instituted by the plaintiff, defendant in error, against the plaintiffs in error, defendants, in the district court of Osage county, to recover balance due on a certain promissory note alleged to have been executed by one Wah-sho-shah, now deceased, and his wife, Rosa Wah-sho-shah, defendants. The note originally was executed by said parties to one R. W. Arnold, and was given as the purchase price of 102 head of cattle, 100 of which was valued at $60- per head, and two at $150 per head, the total purchase price being $6,300 and ten iier cent, annual interest was added, making the note $6,930. The note and mortgage securing same was executed on the 6th day of August, 1922, and on the 10-th day of August same is alleged to have been assigned in"due course to- the defendant in error. The sale .of the cattle, execution of note and mortgage, and the entire transaction took place in the Bank of Hominy, and in the presence and to some extent under the direction of W. S. Crowe, an -officer of the First National Bank of Horn *279 iny, defendant in error. Wah-sho-shah and wife were full-blood Osage Indians unable to speak or read the English language, and executed the note and mortgage by thumb mark, being unable to write. The defense interposed is that the plaintiff is not - an innocent purchaser in due course, and that Wah-sho-shah and wife were incompetent Osage Indians, and were overreached in the transaction, and were fraudulently induced to pay $60 per head for said cattle, when in truth and in fact same were not worth to exceed $20 per head; that sala transaction was made without the consent of the Superintendent of the Osage Agency, and in fact in direct opposition to his direction and orders; and that said cattle were returned to the said Arnold by and under the direction of J. Geo. Wright, Superintendent of the Osage Agency, and received by the said R. W. Arnold, and that all of the racts and circumstances surrounding the transaction were well known to the plaintiff bank at the time it became the owner of said note. Upon the trial of the case to the court without the intervention of a jury, at the close of the introduction of the evidence on the part of both plaintiff and defendants, the plaintiff interposed a demurrer to the evidence of the defendants, upon the theory that no defense had -been established; the demurrer was sustained, and judgment rendered in favor of the plaintiff and against the defendants for the amount sued fpr. from which order of the court sustaining the demurrer and the judgment, the appellants prosecute this appeal, and contend that the judgment of the court was contrary to the law and the evidence, and that the court committed reversible error in sustaining-plaintiff’s demurrer to the evidence offered by the defendants. The evidence supports 'the averments of the defendants’ answer, to the effect that the defendants Rosa Wah-sho-shali and her husband, who was deceased at the time of the institution of the suit, were full-blood Osage Indians, unable to read, speak, or write the English language, and that the cattle purchased were not worth to exceed $30 per head, and that the 102 head of cattle were selected from a herd of about 650 head, and it is admitted by plaintiff that there were cattle is the herd -worth $60- per head, but that Wah-sho-shah. in selecting the cattle, if in fact he did select them, took cattle of far less value. There is also a conflict in the evidence as to whether or not Rosa Wahsho-shah executed the note, and for the purpose of the demurrer we think the evidence amply sufficient to establish the fact that the title to the note was defective, and sufficient to shift the burden upon the appellee bank! to show that they were purchasers in due course. It is a well established rule of law that, when it is shown that the title of any person who has negotiated a negotiaable 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. As provided by section 4109, Revised Laws 1910, which has been construed by this court in the case of Dunkin v. Waurika National Bank, 62 Okla. 175, 162 Pac. 788, and numerous other decisions, the proof at least establishes a partial failure of consideration, ana this is admitted for the purpose of the demurrer. The court made no special findings of fact or conclusions of law, and there is nothing to indicate that the court weighed the evidence as upon final submission, and under these circumstances we think the court was dea ly in error in sustaining the demurrer. It is evident from the record that counsel for plaintiff in the trial court interposed a demurrer merely for the purpose of the record, and insisted that he be permitted to introduce further testimony on discovering that the court was going to sustain bis demurrer, but the court apparently being satisfied that the demurrer was well taken proceeded to sustain same. This leaves undisposed of, the question urged by the appellant in his, reply brief, to the effect that on account of certain restrictions applicable to Osage Indians and the authority given to the Interior. Department to supervise, regulate, and control transactions between the Osage Indians and Indian traders, as provided by Act of Congress March 3, 1901, 31 St. L. 1065, chapter 832. t'he t-ansaction here involved is in violation of the act, which act has been construed by this court in the case of Tinker v. McLaughlin-Farrar Co., 32 Okla. 788, 124 Pac. 296, wherein the court held that the act was in full force and effect. The act among other things provides: “That it shall be unlawful hereafter for the traders upon the Osage Indian Reservation to give «edit to any individual Indian or head of a family to au amount greater than 60 per centum of the next quarterly annuity to which such individual Indian or ' head of a family will be entitled; and if such traders shall give credit to any individual Indian or head of a family upon such reservation in excess of the amount herein allowed, no portion of the indebtedness thus created shall be collectible, and the same shall be void and the licenses of such traders shall bp revoked. * * *” *280 But in the instant ease no proof is offered of the amount of the quarterly annual piayment 0f the Wah-shot-shahs, hence we. deem it unnecessary to pass upon this question at this time. Having concluded that the demurrer was improperly sustained, we find that the case should be and the same is hereby reversed and remanded to the trial court for a new trial. By the Court: It is so ordered. Note. — See under (1) 38 Cyc. pp. 1542, 1543, 1946; 26 R. C. L. p. 1063; 3 R. C. L. Supp. p. 1490; 4 R. C. L. Supp. p. 1694; 5 R. C. L. Supp. p. 1437. (2) 8 C. J. p. 983, §1291. (3) 8 C. J. p. 1060, §1371 (Anno).