Battles & Webster v. Laudenslager

Mr. Justice Sterrett delivered the opinion of the court, It may be assumed that the signature of the defendant, as maker of the note in suit, was fraudulently obtained by the payee. This fact was clearly shown and has been impliedly found by the jury. The testimony was also clear and uncontradicted that the plaintiffs became the holders of the note for value before maturity. The only question of fact upon which the defence hinged, was whether they were bona fide holders, without notice of the fraud practised by Sullivan the payee. This question was submitted to the jury and passed upon by them adversely to the plaintiffs. The substance of their complaint is that there was no competent evidence to justify the court in submitting the question. It is not claimed that either of the plaintiffs was present at the time the note was given, nor was there a particle of direct evidence that they had any knowledge of the fraudulent conduct of Sullivan. On the contrary Mr. Battles, who transacted the business for them, testified that they neither knew nor had reason to suspect it. For the purpose of affecting them with such knowledge the defendant relied entirely upon the facts and circumstances which he was permitted to prove under his first offer; and it was claimed that such a train of circumstances was established as justified the court in submitting the question to the jury, whether the plaintiffs purchased the note with knowledge of the fraud practised by Sullivan. Assuming the facts and circumstances to be true, are they, singly or collectively, sufficient to justify the inference sought to be drawn from them ? We think not. They are entirely consistent with honesty and good faith on the part of the plaintiffs and their ignorance of Sullivan’s fraudulent conduct. It may be said they are not inconsistent with their knowledge of the fraud, but that amounts to nothing unless they point in some degree to the conclusion sought to be established. We are unable to see -that any natural inference or presumption of knowledge arises from them. If there is, it is so weak and inconclusive that it would be unsafe and improper to submit the question to the jury. At best it could be merely the subject of conjecture or speculation; and “mere speculative inferences are not allowable and cannot be regarded as evidence:” Goodman v. Simonds, 20 Howard 360. No doubt great latitude should be allowed in the admission of circumstantial evidence for the purpose of proving participation in manifest fraud, but when the testimony is before the court, it is their duty to see that it has at least a natural and reasonable tendency to sustain’ the allegations in support of which it is introduced, that it is of such a character as to warrant an inference of the fact to be proved, and [452] amounts to something more than a mere basis for conjecture or vague speculation. If there is no sufficient evidence to justify an inference of the disputed fact, the court has the right and it is its duty to withhold it from the jury. “ Evidence may be legally admissible as tending to prove a particular fact which yet by itself is utterly insufficient for the purpose. It may be a link in a chain but it cannot make a chain unless other links are added Howard Express Co. v. Wile, 14 P. F. Smith 201. So in England it is now settled that the preliminary question of law for the court is not whether there is literally no evidence, but Avhether there is none that ought reasonably to satisfy the jury that the fact sought to be proved is established. If there is evidence on Avhich the jury can properly find the question for the party on whom the onus of proof lies, it should be submitted; if not, it should be withdrawn from the jury: Ryder v. Wombwell, Law Rep. 4 Exch. 39; Jewell v. Parr, 13 C. B. 916. Again, in determining Avhether a question of fact should be submitted to the jury on the evidence presented, the character or degree of the proof required should also be taken into consideration. The plaintiffs in the present case, were the holders for value before maturity of negotiable paper. The presumption in their favor was that they were bona fide holders Avithout notice, and, to affect .them with knowledge of such fraud as would defeat a recovery, the evidence should be clear: Moorehead v. Gilmore, 27 P. F. Smith 122. In that case it is said that “ the latest decisions, both in England and this country, have set strongly in favor of the principle that nothing but clear evidence of knowledge or notice, fraud or mala fides can impeach the prima facie title of a holder of negotiable paper taken before maturity. It is of the utmost importance to the commerce of the country that the principle should be sternly adhered to, however hard may be its operation in particular cases. To the same effect are Goodman v. Harvey, 4 Ad. & E. 870 ; Goodman v. Simonds, 20 How. 348; Phelan v. Moss, 17 P. F. Smith 59. Considering the facts and circumstances, relied on by the defendant, either singly or collectively, we are of opinion that they were insufficient to justify the inference sought to be drawn from them, and that they utterly failed to furnish that degree of proof which was required to impeach the prima facie right of the plaintiffs, and should not have been submitted to the jury. The ninth and tenth assignments of error are therefore sustained. In addition to the insufficiency of the testimony to justify an inference of the fact to be proved, part of it was objectionable on another ground. The character of Sullivan for honesty and integrity in 1871 — 2, was irrelevant, and could have no other tendency than to mislead or prejudice the jury. All that was. done by him in procuring defendant’s signature to the note, so far as it tended to [453] prove fraud, was relevant, but his general reputation for honesty was in no way involved in the issue. The learned judge, in that part of his charge covered by the second assignment, fell into an error, in saying to the jury, that the plaintiffs ought not to recover “if there was any evidence tending to show that they were connected with or had any knowledge of the original fraud.” This gave the jury an unwarrantable latitude. It by no means follows that any fact is to be accepted as true because evidence has been introduced tending to prove it. It frequently occurs that there is evidence, tending to prove certain facts, which often falls far short of establishing their truth. There is nothing in any of the remaining assignments, that calls for special notice. If the testimony had been such as to justify the submission of the question of notice or knowledge of the fraud to the jury there would be no just ground of complaint. Judgment reversed and a venire facias de novo awarded.