different position is given to it by the public | 3. EVIDENCE 165(5)-BEST OR SECONDARY authorities." EVIDENCE-AMOUNT DUE ON NOTE. Nor should the fact that the plaintiff, in 1907, disputed the right of defendant to exercise jurisdiction over the strip involved, in and of itself, affect their relations thereto, as the status could only be changed in pursuance of the law. In an action by bank on pledged note given as security for discounted note subsequently renewed, parol evidence as to state of indebtedness at time of renewal without production of original note is not in violation of best evidence rule. 4. WITNESSES 269(15)-Order of PROOF. The rectification of the error in the survey of 1889 could have been provided for by the Legislature at an earlier date, and thus restored to plaintiff jurisdiction over the dis-5. puted territory. Whether, in the absence of legislation, other remedies were open to plaintiff, such as quo warranto or injunction, we do not deem it necessary to decide, as they were not resorted to or invoked by plaintiff. That the agent of a bank discounting a note knew that the payee of the note did not have insufficient to charge the bank with knowledge sufficient money in bank to erect a building held that collateral notes taken by the bank were obtained by such payee on fraudulent representations that it had sufficient funds for such purpose. 6. TRIAL 296(1) — INSTRUCTIONS — CONSTRUCTION AS A WHOLE. An instruction that ignores the principle that notice to an agent is notice to the princifairly and accurately presented the law applicapal held no error, where instructions as a whole ble to the case. 7. TRIAL OF EVIDENCE. 296(8)-INSTRUCTIONS-WEIGHT Judgment should go against the plaintiff on the second cause of action. However, we think the plaintiff is entitled to judgment defining and designating the true boundary line between it and defendant county, but, before this can be done, it will be necessary to have made an official survey of meridian 113 deg. and 20 min. west longitude, the pre scribed statutory line between the two counties, and, inasmuch as the law requires that Instruction that puffing statements, made the line so surveyed shall be suitably mark- value of the stock as an investment, would not by promoters or agents selling stock as to the ed upon the ground, we will defer making constitute a defense held not on the weight of the order for a survey for 20 days, pending the evidence, in view of other instructions definwhich time counsel are invited and request-ing false and fraudulent representations. ed to submit suggestions as to the form and 8. ACTION 59 - CONSOLIDATION contents of the order, especially as to how and with what material the line shall be marked. In the matter of disbursements and expenses, including the fees and expenses of the referee, and the expenses of surveying and marking boundary, we think it but fair and just that they be borne by the two counties equally, Yuma county to recover her costs in this court; and it is so ordered. FRANKLIN, C. J., and CUNNINGHAM, J., concur. (19 Ariz. 464) ELLIS et al. v. FIRST NAT. BANK OF (Supreme Court of Arizona. April 18, 1918.) Under Civ. Code 1913, par. 590, providing that motions for new trial shall be made after rendition of judgment, a motion before rendition of judgment was premature and ineffectual. 2. APPEAL AND ERROR 294(1)-REVIEWDEFENDANT ON MOTION FOR NEW TRIAL. Civ. Code 1913, par. 1231, providing that in an appeal from a final judgment in an action tried before a jury, the Supreme Court shall not consider the sufficiency of evidence unless a motion for a new trial shall have been made, held to preclude consideration of sufficiency of evidence, where motion was ineffectual because made before rendition of judgment, contrary to paragraph 590. MENT. JUDG Where a bank brought separate actions on pledged notes against seven defendants, and upon motion of defendants, the issues being the same, the suits were consolidated, a single verdict and judgment is sufficient. 9. TRIAL 345-VERDICT-ASCERTAINMENT OF AMOUNT OF RECOVERY. Where in consolidated actions on notes transferred to plaintiff as collateral for another note larger in amount than any of the notes sued on, it being stipulated that, if plaintiff was entitled to recover, the amount due should be shown by the face of the notes in suit, defendant's objection that the jury in its verdict for plaintiff failed to find the amount due on the collateral notes was untenable. 10. BILLS AND NOTES 339- BONA FIDE PURCHASERS. In view of Civ. Code 1913, pars. 4201, 4202, a purchaser of negotiable paper in good faith and without knowledge of infirmity or defects is not required to make original and independent investigation of the circumstances surrounding the issue of the paper and the relations of the parties thereto. Appeal from Superior Court, Maricopa County; R. C. Stanford, Judge. Consolidated actions by the First National Bank of Globe, a corporation, against William C. Ellis and others. Judgment for plaintiff, and defendants appeal. Affirmed. Struckmeyer & Jenckes, of Phoenix, for appellants. Alice M. Birdsall, of Phoenix, and A. C. McKillop, of Globe (J. F. Goldsberry, on the brief), for appellee. FRANKLIN, C. J. Felix Lamm and John Armer were each indebted to the Realty Se For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes curities Company, a corporation, in the sum, particular amount due and unpaid on each of of $5,000. This indebtedness was evidenced the seven notes. The uncontradicted testiby the promissory note of each of said per- mony left only the question raised by the sons given to the corporation. The Realty answers of the respective defendants as to Securities Company, wishing to realize upon whether or not the appellee was the holder the indebtedness, entered into negotiations of the several notes in good faith, that is with the appellee for the sale and purchase to say whether the Realty Securities Comof said notes. The appellee agreed to pur-pany obtained the notes of the seven defendchase the notes, less the customary dis- ants by false and fraudulent representations, count, provided the Realty Securities Com- and, if so, whether or not the appellee had pany would furnish an acceptable indorser actual knowledge of the infirmity or defect, or collateral; the character of appellee as or knowledge of such facts that its action a national bank requiring this. The name of in taking the notes amounted to bad faith. D. J. Peter was suggested as the indorser of the paper, which was agreeable to the appellee, but, upon being requested to indorse the notes, he refused. It was thereafter agreed that the Realty Securities Company should put up as collateral certain unmatured, negotiable promissory notes held by it, the same, however, first to be passed upon as to their sufficiency by Mr. Lloyd B. Christy of the Valley Bank of Phoenix. Mr. H. J. Brazee, the secretary of the Realty Securities Company, delivered the notes to the Valley Bank for and on account of the appellee, and, Mr. Christy, having examined them, reported favorably to the appellee as to the sufficiency of the collateral. Thereupon appellee paid to the Realty Securities Company the face value of the Armer and Lamm notes, less the current rate of interest at the time. Among the notes so pledged to appellee as security for the payment of the Armer and Lamm notes were those of the seven defendants in the superior court, to wit, W. C. Ellis, W. W. Edwards, O. E. Plath, Peter Mohn, Joseph A. Lobit, H. A. Hammels, and Harry T. Duffy. These notes were all unmatured, negotiable paper at the time of the bank's purchase. The Lamm note was paid in due course. A portion of the Armer indebtedness evidenced by his note to the Realty Securities Company, and which was purchased by appellee, was also paid, but, there remaining an unpaid balance thereof, the former note was taken up by Armer with his negotiable promissory note, evidencing the balance of his indebtedness in the sum of $4,375, and as a renewal of the former note to the extent of the balance so due and unpaid. At the time of the trial there remained due and unpaid of the indebtedness evidenced by the renewal note of Armer the sum of $2,722.22 as principal, and $443.36, interest. The consolidated action was tried to a court and jury and a verdict found for the plaintiff below, which is the appellee here. There was but one form of the verdict rendered by the jury, which form, however, embraced and designated the particular names of the seven defendants and the numbers of the respective actions so consolidated for the trial. Upon the verdict of the jury, the judgment of the court was entered against each of the seven defendants for the amounts shown to be due and unpaid upon their respective notes. This appeal is prosecuted by the defendants Ellis, Edwards, Plath and Mohn. The other defendants do not appeal. [1] On the record presented to this court, we are precluded from considering the sufficiency of the evidence to sustain the verdict and judgment, because the action was tried before a jury and the motion for a new trial was not made within the time fixed by the statute. The motion for a new trial in this case was made before the rendition of the judgment. Paragraph 590 of the Civil Code of 1913 provides: "All motions for new trial, in arrest of judgment, or to set aside a judgment, shall be made within ten days after the rendition of judgment." datory. It is also provided in the Civil Code [2] This provision of the statute is manof 1913, paragraph 1231: "Upon appeal from a final judgment the court shall review all orders and rulings made by the court below, which are assigned as error, whether a motion for a new trial is made or not. If the court may, on appeal from the final judg a motion for a new trial is made and denied, ment, review the action of the court below in denying the motion, though no appeal be taken from the order denying the motion for a new judgment, the Supreme Court shall not consider trial; provided, that on appeal from a final the sufficiency of the evidence to sustain a verdict or judgment in an action tried before a jury unless a motion for a new trial shall have been made." In Gibson v. McLane, 17 Ariz. 61, 148 Pac. 288, we said: Seven suits were brought by appellee, one against each of the seven defendants, to recover on their several promissory notes so pledged as collateral to secure the unpaid Code of 1913, par. 590, to be made after rendi"A motion for a new trial required by Civil balance due on the indebtedness evidenced by tion of judgment, being made before then, is the Armer renewal note. On motion of the ineffectual. The motion for new trial having defendants, agreed to by plaintiff, these sev-been made premature, it is as though there had en suits were consolidated for trial, the is- been none.' sues presented by the pleadings and the evi- [3] It is urged that the trial court comdence offered in support thereof being pre-mitted error in permitting oral proof of the the Valley Bank for certain notes that the appellee had purchased from the Realty Securities Company, and to pass upon the collateral notes as to their sufficiency. appellee at the time he gave his renewal notes as collateral to be put in escrow in note without requiring appellee to produce the original note or satisfactorily account for its nonproduction; that because of this the rule which requires the best evidence to be produced which the nature of the case de- At the time Mr. Christy received the notes mands was violated. The evidence disclos- in behalf of the First National Bank, he es that the second note of Armer was not considered them A No. 1 commercial paper. given in payment of the original indebted- At the time no defense entered his mind. ness, but merely as a renewal for that por- The value of the name attached to the note tion of it unpaid at the time of the execu- was all. On his cross-examination the court tion of the renewal note. excluded as not proper cross-examination "A renewal note has the benefit of any sethe matter of the financial condition of the curity for the payment of the original indebtedness, and the holder may enforce it whether the renewal be for the whole or part of the original, in the absence of an agreement to the contrary." Daniel. Negotiable Instruments (6th Ed.) vol. 1, § 748. It is, of course, universally recognized that the best evidence of which a thing to be proven is susceptible must be produced or its absence satisfactorily accounted for. This parol evidence did not vary or contradict any written instrument, but merely showed the state of the account or the amount of the indebtedness of Armer to appellee when he accepted the renewal note. The existence of this indebtedness was a fact in and of itself which depended upon the state of the account between the parties. The original note would not determine this. It was incumbent upon appellee to prove Realty Securities Company, at the time he passed upon the sufficiency of the collateral notes. There was no error in this respect. In the first place, it was sought to establish on cross-examination the new matter made an issue by the answer of defendants. This properly was to be brought forward in the development of their own case. This was afterwards done, and Mr. Christy fully interrogated about the matter, which, on crossexamination, had been excluded as not in proper order. [5] It was the contention of the defendants and the effort of their cross-examination to show that the bank was not a holder of the knowledge of certain infirmities therein paper in due course because Mr. Christy had when passing upon the collateral, and which knowledge was chargeable to the bank. that the note sued upon was pledged to seBut we have seen that the authority of Mr. cure the present indebtedness of Armer, and, in addition to this, the production of the re Christy was limited to passing upon the sufnewal note with parol testimony as to the ficiency of the security. "The value of the amount of the original indebtedness remain-name attached to the note was all." In ading due and unpaid at the time of its execu-dition to this, the fact that Mr. Christy knew tion is certainly all that should reasonably that the Realty Securities Company did not be required. Under the facts of this case, it is not considered that the rule insisted upon should obtain to exclude parol evidence as incompetent to show the state of the account between Armer and the appellee. The present state of the indebtedness, together with the pledge of the notes in suit as security for the payment of that indebtedness, is the foundation of this action. The inquiry, therefore, as to the original indebtedness of Armer was but collateral to the main issue before the court, and we see no error in admitting the parol testimony of the witnesses who had personal knowledge of the facts to prove the state of that indebtedness. See Stein v. Local Board of Review, 135 Iowa, 539, 113 N. W. 339; Canadian Bank of Commerce v. John J. Sesnon Co. et al., 68 Wash. 434, 123 Pac. 602; Share v. Coats, 29 S. D. 603, 137 N. W. 402. have sufficient funds at that time to erect a building, and, conceding that his knowledge was imputable to appellee, it would not destroy the status of appellee as a holder in good faith, even though an agent of the Realty Securities Company had obtained the notes by falsely and fraudulently representing such to be the fact, if Mr. Christy did not know that any such representation had been made to the makers thereof. As between the defendants and the Realty Securities Company, if the latter's agent had made representations to the former that such was a fact and it was false, and they believed it and relied upon it as true and were thereby induced to execute their notes on the faith of the representations that the company did have money in the bank sufficient to erect a building, the defense might prevail, but, as between the appellee and the defendants, it was not sufficient to show that the notes were obtained by the Realty Se [4] According to the testimony, the authority given by appellee to Mr. Christy was lim-curities Company through false and frauduited to passing upon the sufficiency of the collateral and on the strength of which the bank was to purchase the Lamm and Armer notes. Mr. Christy testified for the appellee that he was asked by Mr. Greer, its president, over the telephone to select certain lent representations. It was necessary to go farther and show that appellee had actual knowledge thereof, or knowledge of such facts that its action in taking the instrument amounted to bad faith. Mr. Christy testified that he did not follow the actions of the Realty Securities Com-1 selves caused the consolidation to be made, pany, and did not know its financial condi- and they are in no position to take this extion at any time, other than knowledge of how much money it happened to have in its bank account; that when he examined the notes for appellee, he did not know what, if any, representations had been made to the makers thereof. ception and now ask that the verdict and judgment be set aside because technically the cases are not such as under the law should have been consolidated. But beyond this the form of the verdict comprehended the style and number of each particular case so consolidated, and to hold that the verdict rendered should have been upon seven separate pieces of paper would be regarding mere form rather than substance. "No special form of verdict is required, and where there has been substantial compliance with the law in rendering the verdict, the judgment shall not be arrested or reversed for mere want of form therein." Civil Code of 1913, par. 546. [6] One of the instructions is assailed because it is said to ignore the principle that notice to an agent is notice to the principal. It is impossible for a court to state in one sentence, or in one particular instruction, all the law applicable to the facts of a case. The instructions must be considered as a whole, and, when so considered, then if they fairly and accurately present the law applicable to the facts, this is all that may be required. The court did particularly instruct the jury on this principle of the law, and, in view of the limited authority given to Mr. Christy by the appellee, it was more favor-basis of this action, was greater than the able to defendants' contention than was justified by the facts. [7] Error is assigned on the following ininstruction: "You are instructed that 'puffing' statements made by promoters or agents selling stock of the Realty Securities Company as to the value of the stock as an investment, and other kindred statements, would not constitute a defense." It is said that this instruction is bad because it is a comment upon the evidence, and also because the court did not point out the distinction between a "puffing" statement and a false representation. It is obvious the instruction does not comment upon the evidence. It is a general statement of the law applicable to the facts. When persons are compos mentis and deal at arm's length, the law does not regard mere "puffing" as to the value of stock as an investment the same as a false representation or the positive affirmation of a specific fact, but rather as a mere expression of opinion or "trade talk" which men of ordinary intelligence in their business dealings always receive cum grano salis. If defendants desired a charge covering the distinction here suggested, a proper instruction to that effect should have been requested. What is commonly called "puffing" or "trade talk" is always allowed, provided it is kept within reasonable limits. This instruction so confined it, and, when considered with other instructions defining false and fraudulent representations, could not have been misunderstood by the jury. [9] The objection that the jury did not find the amount of recovery in each case is alike untenable. The undisputed testimony shows that the indebtedness of Armer, which is the amount of any of the notes in suit. It was stipulated that the amount due on each note should be the amount as shown by the face of the respective notes in suit. There was nothing, therefore, to be done, except make a mere arithmetical calculation of the amount, and it is not contended that any error occurred in the calculation as made. That the calculation being made by the court, under the circumstances, instead of the jury, calls for a reversal of the judgment is again in viting our attention to shadow, not substance. While the record does not call for a critical analysis of the evidence, nevertheless, the bearing upon other assignments of error, and evidence has been carefully reviewed in its it is convincing that nothing in the record would warrant a finding that the action of appellee in taking these notes amounted to bad faith. It may be conceded that the notes were obtained from appellants by false and fraudulent representations on the part of the Realty Securities Company, but this is not enough for them to prevail. The method by which these appellants were inveigled into this investment, of which they now wish to be relieved, is an interesting study of human nature. Michael Angelo with paint and brush could not have pictured a thing more beautiful than the building drawn in words by the agents of the Realty Securities Company. The prospective profits to be derived from the tenants who were to inhabit this building were most alluring. From the cold record that we have, without [8] Complaint is made because the court the gesture and tone of voice that must have did not give seven different forms of ver- beèn potent to move the warm impulses of dict to the jury, and a verdict thereupon the heart, I can see in my mind's eye that rendered against each defendant separately; majestical building rising to its due proporalso because the jury did not find the amount tions of architectural perfection, furnished of the recovery in each separate case. When with every modern equipment and appliance cases are consolidated, there is in effect but that would appeal to the tastes of tenants one suit, and a single verdict and judgment the most fastidious. It was a thing altogethcomprehending and settling all the issues er lovely. The appellants were even told that of the law that, as between the maker and the holder in due course, any loss to be suffered must fall upon the maker as the cause of it. This burden may not be shifted unless the person to whom the instrument is negotiated had actual knowledge of the infirmity or defect, or knowledge of such facts that his action in taking the instrument amount to bad faith. Paragraphs 4201-4202, Civil Code of 1913. There is no reversible error. Affirmed. was not then flying, but that the dirt would soon be flying, that the company had ample resources to make the dirt fly, and erect the building too. They were told that the execution of the notes was a mere formality. That before the notes became due immense revenues would be coming in from the building with which not only to take up the notes, but leave a large surplus profit to be shared in by the makers. Most any moth would have singed its wings in the bewilderment of The policy of the law is to let unmatured such a light. In the enthusiasm of this study, negotiable paper flow freely in trade, and the writer of this opinion almost feels a any impediments placed upon its movement momentary regret that the opportunity to that are not dictated by a natural sense of give such a note was not presented to him. justice would result in obstructing the arMan, thou shalt earn thy bread by the sweat teries of commerce, and distract the business of thy brow. But when will men learn this credit of commercial life, which is so largely lesson? It would prove but a vain and use-dependent upon this character of credit, as less effort of the law to attempt the suppres- a medium of exchange, to sustain it. sion of gullibility. The term "gullibility" is not used invidiously nor in the least disparagement to these appellants, but merely as a general observation of one of the fundamental traits in human nature. Since the father fell, every son of Adam is subject to the weakness in greater or lesser degree. The obvious remedy for this infirmity is the lesson of one's own experience which should in time, to those not wholly insensible to cause and effect, nor blind to an everyday experience in business matters, inculcate a wholesome and practical circumspection upon those occasions that present Mr. Wallingford as the orator of the day. But so long as an irresistible impulse exists among mankind to rub the Aladdin's Lamp and thereby obtain the rich stores of the world without other effort than some mysterious agency, just so long will Mr. Wallingford dine out of gold plate and ride in his coach and four. Had this been learned, this appeal had not been here. [10] All men compos mentis and not suffering under some disability of the law are free to engage in business and invest their money at will. The freedom to contract is one of their most cherished and substantial rights, and it is only when fraud as defined in the law has been practiced upon them that the courts may interfere to set aside their obligations. Representative men of financial worth and standing must realize that in putting forth their unmatured, negotiable paper it is an invitation, sanctioned by the law, that all men may deal therewith upon the face value of it. In the market places men who deal in such paper are not, at their peril, compelled to make an original and inependent investigation of the circumstances surrounding the issue of every such instrument, or of the relations existing between the maker and payee thereof. It is enough if they give value and take the paper in good faith. Though the fraudulent payee may be enabled to realize upon a sale made to an innocent purchaser, still it is but a just rule ROSS and CUNNINGHAM, JJ., concur, (19 Ariz. 488) MAXEY v. BOARD OF SUP'RS OF YUMA COUNTY et al. (No. 1578.) (Supreme Court of Arizona. April 18, 1918.) 1. COUNTIES 182 BONDS EXPENSES STATUTE "EXPENSES IN INCURRING BONDED INDEBTEDNESS." Under Civ. Code 1913, par. 5284, providing that the expenses of all proceedings in incurring a bonded indebtedness shall be borne by the county, and that if the bonds are sold such expenses shall be deducted from the proceeds, an amount paid to a broker for selling the bonds was not an expense of the proceeding, and hence could not be deducted from the proceeds of such bonds; but the items for advertising the sale of the bonds were a proper charge against the proceeds. 2. MANDAMUS 100 ACTION OF COUNTY SUPERVISORS-COUNTY FUNDS. In the absence of any law requiring the from the road fund to the general fund of the board of supervisors of any county to transfer county the amount paid out for advertising the sale of the road bonds, the court would not, by mandamus or otherwise, control the fiscal orders of the board so as to keep the different funds of the county intact for the specific uses intended by law, in view of the board's legal authority to dispose of the money for the specific purposes for which they are raised. Appeal from Superior Court, Yuma County; Frank Baxter, Judge. Suit by J. H. Maxey against the Board of Supervisors of Yuma County and Ike Proebstel and others, as Supervisors and members of the Board. Judgment for defendants, and plaintiff appeals. Affirmed. W. E. Ryan, of Phoenix, for appellant. H. Wupperman, of Yuma, for appellees. ROSS, J. This appeal is prosecuted from an order sustaining a general demurrer to the complaint and from a judgment of dismissal. Briefly, the facts set out in the complaint are that the plaintiff appellant is a resident For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes |