Grange Trust Co. v. Brown

Opinion by Morrison, J., This action of assumpsit was brought by the Grange Trust Company to recover from the defendant, Harry Brown, the amount of a promissory note, dated December 16, 1909, payable to the order of Henry Kahn, agent, four months after date, for the sum of $602. The note was signed by Harry Brown, defendant, and indorsed, Henry Kahn, agt.; Charles B. White, agt. The plaintiff claimed to be the holder and owner of the note in due [280] course, for value, having purchased it before maturity. The plea was non assumpsit. At the trial the plaintiff proved by the affidavit of defense that the defendant signed and delivered the note to Henry Kahn, and then put its treasurer, Mr. Bell, on the stand and he testified to the purchase of the note for value on December 22, 1909. Plaintiff’s counsel then put the note and indorsements in evidence without proving the signatures of the indorsers. There appears to be a rule of court in Huntingdon county, as follows: “Pleas in abatement and other dilatory pleas, puis darien continuance, the plea of non est factum and any other plea, in order to have the effect of putting in issue execution of writing on which the claim is founded, shall be drawn at length and filed, and shall be verified by the affidavit of the party or some one for him.” In the present case no such plea verified by affidavit was filed. We think the rule of the court and the provisions of the Act of assembly of May 16, 1901, P. L. 194, obviate the effect of the decision in McCormick v. Trotter, 10 S. & It. 94, and, therefore, the plaintiff made a prima facie case, under the pleadings, by putting the note and indorsements in evidence. The defendant’s counsel were bound to know the rules of their own court and if they wished to place on the plaintiff the burden of proving the signatures of the indorsers they should have complied with the rule. We do not think the indorsements on the note, each name being followed by the abbreviation “agt.” cut much figure in this case. These indorsements disclose no principals of the indorsers, and therefore they were personally liable; such indorsements are not restrictive: Sharpe et al. v. Bellis, 61 Pa. 69. The first, second and third assignments are not sustained. In view of the offers made by the defendant’s counsel, both in cross-examination of plaintiff’s witnesses and in direct offers on the part of the defendant, we think the ■court erred in giving a binding instruction in favor of the ■plaintiff. The fourth assignment of error is sustained, We do not sustain the fifth and sixth assignments. [281] We think when the plaintiff put Mr. Bell, its treasurer, on the stand, the defense being that the note was fraudulently disposed of by Henry Kahn, agt., payee, the defendant’s counsel had the right to freely cross-examine Mr. Bell with a view to show, if they could, that the plaintiff was not a holder in due course, without notice, so as to cast the burden on the plaintiff of proving its right to recover under the rules provided in the act of 1901, supra, and the decisions applicable thereto. We therefore think the learned court erred in the rulings excluding the questions propounded to Mr. Bell on cross-examination. The seventh, eighth, ninth, tenth, eleventh and twelfth assignments are sustained. We also think the court erred in refusing to allow John E. Smucker to answer the question propounded to him as set forth in the thirteenth assignment of error and it is sustained. The defendant was, we think, clearly entitled to prove his offers set forth in the fourteenth assignment of error. If the note was procured and put in circulation through the fraud of Henry Kahn, payee, and the defendant could prove this by the required quantity and quality of proof, the question of the credibility of the witnesses should have been submitted to the jury. The great question in this trial was whether or not the note was fraudulently used and disposed of by Henry Kahn, agent. If the defendant could produce a sufficient quantity and quality of oral testimony to sustain his averment of fraud, then the court ought to have referred such testimony to the jury, and the same rule applies to the oral testimony of Mr. Bell and Mr. Smucker. It has been so often decided that when an important question in the trial of a case depends upon oral testimony, it must be referred to the jury to determine the credibility of the witnesses and the weight to be given their testimony, that it now ought to be unnecessary to cite cases on that question. If the defendant can sustain his allegations of fraud in regard to the note in question, then the burden is upon the [282] plaintiff to show affirmatively that it was an innocent purchaser, for value, without knowledge of the fraud: Second National Bk. of Pittsburg v. Hoffman, 229 Pa. 429. See also Schultheis v. Sellers, 223 Pa. 513. The fourteenth assignment of error is sustained. The learned court below and the counsel for appellee seemed to have attached much importance to the cases of Partridge v. Partridge, 38 Pa. 78, and Rumberger v. Golden, 99 Pa. 34, but in view of the condition of this case when the court excluded the defendant’s testimony and gave a binding instruction in favor of the plaintiff, those cases have no application whatever. They both apply to a nudum pactum contract, while the defense sought to be made here was based upon fraud in procuring and negotiating the note. The learned court further held that the case of Second National Bk. v. Hoffman, 229 Pa. 429, has no application to the questions raised in the present case. In this we think the court is in serious error. In our opinion, the doctrine of that case applies very closely to a proper trial and disposition of the case in hand. The judgment is reversed with a venire facias de novo.