Johnson County Savings Bank v. Mendell

U.S. Court of Appeals for the D.C. Circuit
Johnson County Savings Bank v. Mendell, 36 App. D.C. 413 (D.C. Cir. 1911)
1911 U.S. App. LEXIS 5588
Orsdel

Johnson County Savings Bank v. Mendell

Opinion of the Court

Mr. Justice Van Orsdel

delivered the opinion of the Court:

The contract on its face contains provisions impossible of ful*417filment by the vendee. It is apparent it was so intended by the vendor company. The record discloses what might be expected from a transaction of this kind, — the placing of the jewelry with a bicycle dealer, instead of a jeweler; the securing of acceptance of the drafts under representations that they were only receipts; the making of the last draft mature fifteen days before settlement was provided for in the contract, when no liability whatever could be asserted against the vendor; the prompt assignment of the drafts to plaintiff bank; the misrepresentation of the quality and value of the goods; the sale of goods of the same worthless character sold defendant by agents of the vendor to others within the territorial limits in which the vendee was to have exclusive sale; and the selection of the jewelry by the vendor without consulting the wishes of the vendee.

It is unnecessary to indulge in any discussion of the law applicable to a case of this kind. It is one of a class of cases familiar to the courts of the country. Stouffer v. Alford, 114 Md. 110, 78 Atl. 387, and cases cited. The transaction, as it has appeared in the courts in its numerous disguises,, is so tainted with fraud and deception that it has met with universal condemnation. No attempt was made by plaintiff bank to show that it was an innocent holder of the drafts, in due course. This burden was cast upon it when fraud was shown in the procuring of the instruments. It must be implied, therefore, from its silence, that it took the paper with notice of the fraud. It stands in no better light than the vendor.

The contract, on its face, as before suggested, is totally devoid of a commendable feature. Under the evidence, as disclosed by the record, but one course was left open for the jury. The verdict was a just one; in fact, the only one that could have been sustained. In the submission of the case to the jury, the trial judge was most liberal and considerate in his treatment of plaintiff. Nothing occurred of which plaintiff can complain. There was no error. The judgment is affirmed with costs, and it is so ordered. Affirmed.

Reference

Full Case Name
JOHNSON COUNTY SAVINGS BANK v. MENDELL
Status
Published
Syllabus
CONTBACTS; FRAUD; NEGOTIABLE INSTBUMENTS. 1. A written contract for the sale of jewelry, wherein the purchaser-agreed, among other things, to send a quarterly report of all goods sold and remaining on hand unsold, and wherein the seller agreed if the retail sales of the purchaser from the assortment purchased did not equal the amount of the purchase price within twelve and one-half months from date of invoice, it would buy back for cash at the original invoice price sufficient goods to make up the deficiency, followed by acceptance by the vendee of drafts for the purchase price, drawn by the vendor, maturing fifteen days before the settlement provided for by the contract, held to contain provisions impossible of fulfilment by the vendee, and to be tainted with fraud. 2. Where fraud is shown in the procurement of negotiable paper, the burden is on the holder to prove that it is an innocent holder in due course.