Bothell v. Fletcher

Wood, J., (after stating the facts). The court erred in permitting any evidence to go to the jury except that which would tend to prove that appellant was not an innocent purchaser for value before maturity. That was the only issue between appellant and appellees, and the evidence should have been confined to that issue. Therefore evidence of what the contract was between appellees and the American Jobbing Association was wholly irrelevant and incompetent. It was no concern of appellant, if he was without notice of any fraud, that fhe jewelry for which the acceptances were given was worthless, or that it was the contract between appellees and the American Jobbing Association that the acceptances were not to be assigned or transferred. If appellant had no notice of these things, he could not be affected by them. The above evidence in itself in no manner tended to prove that appellant had notice of these things, and the court should not have permitted it for that purpose. A negotiable instrument, as these acceptances were, could 'not be varied in the hands of an innocent holder for value by any contemporaneous oral argreement between the original parties to it that it should not be negotiated. The bona tide character of a holder of negotiable paper can be destroyed only by proof of his knowledge (or facts of which he would have to take notice) of some defects or fraud in connection with the execution of the instrument rendering same invalid in the hands of the payee and of his purchase thereof notwithstanding such knowledge. In such case he would not be an innocent holder, even if he paid value and had the instrument transferred to him before maturity. But otherwise he would be. Thompson v. Love, 61 Ark. 81; Hogg v. Thurman, 90 Ark. 93. The maker of a note or acceptance given in payment or settlement of an account can not set up,, when sued by an innocent holder, that the note or acceptance was procured through fraud or mistake. Lanier v. Union Mortgage & Trust Company, 64 Ark. 39, 53. In the absence of any evidence first tending to show that appellant was not an innocent purchaser of these acceptances (and we find none in this record), the court should not have permitted any testimony as to the fraudulent character of the account or transaction out of which the acceptances originated. Upon the evidence adduced the instructions of the court were abstract. The appellant was entitled to a verdict. For the error indicated the judgment is reversed, and the cause is remanded for a new trial.