Crum v. Hanna

Prentis, J., delivered the opinion of the court. W. A. Crum (defendant) is here complaining of a judgment against him in favor of H. C. Hanna (plaintiff), based upon two negotiable bonds, each for $500.00, given for the purchase of stock in the American Fuel Company. The bonds were dated December 10, 1920, payable to Crum’s own order, endorsed by him and purchased by Hanna the day after the bonds were executed at a discount of $25.00. That the bonds were obtained by the false and fraudulent representations of the agents of the American Fuel Company is [368] shown, and for the purposes of the ease it may be conceded that the stock for which they were given was worthless. The defense is based entirely upon the-claim that Hanna, the plaintiff, knew that the bonds-had been procured by fraud. It is conceded that-there is no direct evidence to support this contention. The plaintiff showed the circumstances under which he-obtained the bonds, and there was nothing at the time-of the transaction which casts any imputation whatever upon his good faith. He had himself purchased two shares of the stock of the company early in 1920 and seven shares late in 1920, both before the purchase of the bonds here involved. He also was deceived, as was Crum, the defendant, who had previously subscribed to stock in the company, by the false and fraudulent representations of the agents of the company. Nearly all of the evidence introduced by the defendant is that which tends to show that the stock is worthless- and that the representations under which it was sold were false and fraudulent. In addition to this, there-is evidence that Hanna, before the fraud was discovered, thought well of other bonds of a similar nature which the agents of the company had taken for stock; that he bought two of such other bonds; and that he assisted in the sale of another, for which he was paid $10.00. All of this, however, occurred after he had purchased, the bonds here involved. Crum also sought to show that the general reputation of the plaintiff for truth, veracity, honest and fair dealing was not good. In this attempt he certainly failed. Several witnesses were introduced who declined to sustain such an imputation, and some who also showed that they had no sufficient knowledge to justify such a conclusion. Two of these-witnesses, both of whom were hostile to the plaintiff,., testified that his reputation was bad. [369] . [2] After all of the evidence was submitted, the court, upon motion of the plaintiff, struck out the evidence introduced on behalf of the defendant. The propriety of this ruling may be the subject of some question, in so far as it related to the general reputation of the plaintiff, but it was clearly right as to the other facts and circumstances sought to be proved, because they all occurred after the acquisition of the bonds here involved, and none of them even tended to show any fraud on the part of the plaintiff. The testimony relating to the character of the plaintiff appears to be inconclusive as well as quite immaterial, because almost every fact and circumstance relied upon by the defendant is also shown by the plaintiff’s own testimony, so that the ruling, if erroneous, was harmless. If all of the excluded evidence had been admitted, it was clearly insufficient to show that the plaintiff was guilty of any fraud in the purchase of these bonds, and hence the jury could not properly have rendered any other verdict than one in favor of the plaintiff. The case is ruled here by Fleshman v. Bibb, 118 Va. 582, 88 S. E. 64, which in its essential facts is like this case. Even if after giving all of the evidence relied upon by Crum to defeat the action its full effect, and even if Hanna could be said to have acted negligently, or to have been affected with notice of any suspicious circumstances before he bought the bonds, this is all that can be charged against him. This is insufficient, for in the absence of proof of facts amounting to fraud on bis part, such evidence is insufficient to defeat his right of action. That Hanna is a holder in due course is manifest. Code sections 5614, 5618 and 5621. The judgment is plainly right. Affirmed,