prudent man inquiry in Missouri

1903This was fully explained and authorities cited in Sammons v. O’Neill, 60 Mo. App. 530 .

1900Sammons v. O’Neill, 60 Mo. App. 530, 536 ; Dry Goods Co. v. Schooley, 66 Mo. 406 ; State to use v. Mason, 112 Mo. 374 .

1921Gross negligence, even, is not sufficient; actual notice of the facts which impeach the validity of the note must be brought home to the holder. [Johnson v. McMurry, 72 Mo. 278 .]' "`Knowledge of facts which would put a prudent man on inquiry is not sufficient to affect the title of an indorsee of a negotiable instrument purchased before maturity.

1921Co. v. Vette, 142 Mo. 560 .] This is exactly the meaning of Section 10026, Revised Statutes 1909.' "In Hayes v. Blaker, 138 Mo. App. 24 , 119 S.W. 1004 , this appears: `When proof is made that the holder received the paper before maturity in good faith for a valuable consideration, the burden devolves on the maker to prove the holder had actual notice of the specific fact which originally would affect the validity of the paper. [Johnson v. McMurry, 72 Mo. 278 .] Such notice needs not be established by direct proof but may be inferred by the triers of fact from facts and circumstances, but it s

1921A better theory is *Page 428 that when it is shown that the note has been in guilty hands the law presumes that it remains in such hands until the holder, because of having peculiar knowledge of the facts, rebuts such presumption by disclosing his knowledge of the facts. [Hamilton v. Marks, 63 Mo. 167 , 178.] This presumption like all presumptions disappears in the light of the facts, and when plaintiff has disclosed the facts within his knowledge the defendant may put in his evidence if desirable, and then, all the evidence being in, the case goes to the jury only in case there is substantial

1909This species of notice is not applied, by way of a legal presumption, to transactions in commercial paper, as it is to other affairs where it appears the party to be charged with notice was remiss in pushing an inquiry which the facts he knew ought to have incited. [Hamilton v. Marks, supra; Mayes v. Robinson, 93 Mo. 114 .] It is not essential to prove by direct testimony an indorsee knew when he acquired a negotiable instrument, it lacked consideration or was obtained by fraud; but the triers of the facts may find he knew as much from relevant circumstances and, perchance, from such circumsta

1898Sammons v. O’Neill, 60 Mo. App. 530 ; Van Raalte v. Harrington, 101 Mo. 602 .

1898Van Raalte v. Harrington, 101 Mo. 602 ; Sammons v. O’Neill, 60 Mo. App. 530 ; Dry Goods Co. v. Schooley, 66 Mo. App. 406 ; Carroll v. Hayward, 124 Mass. 120 ; Lyons v. Leahy, 15 Ore. 12 .

1980For example, we note that in Withers v. Teacher Retirement System, et al., 447 F. Supp. 1248 (S.D.

1964Of course, actual knowledge may be inferred from the facts and circumstances surrounding acquisition of the note but not ‘from things that would merely put a prudent man on inquiry.’ Commerce Trust Co. v. McGirk State Bank, 222 Mo.App. 8 , 300 S.W. 526, 527 (4).” Local Finance Co. v. Charlton, Mo.App., 289 S.W.2d 157, 160 .

1926As held in the case of Bank v. Linneman, supra, actual knowledge by the holder of the note, of fraud, may be inferred from facts and circumstances surrounding the purchase of the note; but not from things that would merely put a prudent man in inquiry. [Bank v. Bullock, 270 S. W. 119 ; Russell v. Wyant, 214 Mo. App. 377 , 253 S. W. 790 ; Downs v. Horton, 287 Mo. 414 , 230 S. W. 103 .] The record seems to be pregnant with facts and circumstances upon which the trial court, sitting as a jury, could reasonably conclude that plaintiff knew the situation relative to the facts through which the note

1926As held in the case of Bank v. Linneman, supra, actual knowledge by the holder of the note, of fraud, may be inferred from facts and circumstances surrounding the purchase of the note; but not from things that would merely put a prudent man in inquiry. [Bank v. Bullock, 270 S. W. 119 ; Russell v. Wyant, 214 Mo. App. 377 , 253 S. W. 790 ; Downs v. Horton, 287 Mo. 414 , 230 S. W. 103 .] The record seems to be pregnant with facts and circumstances upon which the trial court, sitting as a jury, could reasonably conclude that plaintiff knew the situation relative to the facts through which the note

1926As held in the case of Bank v. Linneman, supra, actual knowledge by the holder of the note, of fraud, may be inferred from facts and circumstances surrounding the purchase of the note; but not from things that would merely put a prudent man in inquiry. [Bank v. Bullock, 270 S. W. 119 ; Russell v. Wyant, 214 Mo. App. 377 , 253 S. W. 790 ; Downs v. Horton, 287 Mo. 414 , 230 S. W. 103 .] The record seems to be pregnant with facts and circumstances upon which the trial court, sitting as a jury, could reasonably conclude that plaintiff knew the situation relative to the facts through which the note

1925Nothing short of actual knowledge or bad faith will defeat the holder’s title. [Downs v. Horton, supra., loc. cit. 106, and cases cited.] However, such actual knowledge may be inferred from the facts and circumstances surrounding the purchase of the note by -the -holder, but such facts and circumstances cannot be inferred from things that would merely put a prudent man on inquiry.” [Bank of Hale v. Linneman, 235 S. W. 178 , 181.] It was stated in DePres, Bridges & Noel v. Galloway, 224 S. W. 998 , 1000— “When plaintiff’s evidence discloses all the facts and shows all the elements constituting

1924When fraud is shown the burden is upon the holder to prove his good faith and lack of knowledge of the fraud while it is not only the duty of the defendant when lack of consideration is claimed, to show such a lack but to show that plaintiff had knowledge of such fact. [Pattonsburg Savings Bank v. Koch, 255 S. W. 580 , 583; Bank of Polk v. Wood, 189 Mo. App. 62 .] However, plaintiff is estopped from now claiming that there was no evidence tending to show that he had actual knowledge of the fraud and lack of consideration or that he purchased the note before maturity, for the reason that he sub

1921Co. v. Vette, 142 Mo. 560 .] This is exactly the meaning of Section 10026, Revised Statutes 1909.' "In Hayes v. Blaker, 138 Mo. App. 24 , 119 S.W. 1004 , this appears: `When proof is made that the holder received the paper before maturity in good faith for a valuable consideration, the burden devolves on the maker to prove the holder had actual notice of the specific fact which originally would affect the validity of the paper. [Johnson v. McMurry, 72 Mo. 278 .] Such notice needs not be established by direct proof but may be inferred by the triers of fact from facts and circumstances, but it s

1921Nothing short of actual knowledge or bad faith will defeat his title.' [Bank v. Hammond, 104 Mo. App. 403 , 409, 79 S.W. 493 .] That when the evidence is all before the court there must be substantial evidence and not a mere lack of it by disbelieving plaintiff's evidence *Page 425 is clearly shown by Wilson v. Riddler, 92 Mo. App. 335 , 339, holding that: `The finding against plaintiff on this branch of the case cannot be permitted to stand without overturning well-settled principles of law governing commercial paper.

1921Nothing short of actual knowledge or bad faith will defeat his title.' [Bank v. Hammond, 104 Mo. App. 403 , 409, 79 S.W. 493 .] That when the evidence is all before the court there must be substantial evidence and not a mere lack of it by disbelieving plaintiff's evidence *Page 425 is clearly shown by Wilson v. Riddler, 92 Mo. App. 335 , 339, holding that: `The finding against plaintiff on this branch of the case cannot be permitted to stand without overturning well-settled principles of law governing commercial paper.

1921Nothing short of actual knowledge or bad faith will defeat his title.' [Bank v. Hammond, 104 Mo. App. 403 , 409, 79 S.W. 493 .] That when the evidence is all before the court there must be substantial evidence and not a mere lack of it by disbelieving plaintiff's evidence *Page 425 is clearly shown by Wilson v. Riddler, 92 Mo. App. 335 , 339, holding that: `The finding against plaintiff on this branch of the case cannot be permitted to stand without overturning well-settled principles of law governing commercial paper.

1921Co. v. Vette, 142 Mo. 560 .] This is exactly the meaning of Section 10026, Revised Statutes 1909.' "In Hayes v. Blaker, 138 Mo. App. 24 , 119 S.W. 1004 , this appears: `When proof is made that the holder received the paper before maturity in good faith for a valuable consideration, the burden devolves on the maker to prove the holder had actual notice of the specific fact which originally would affect the validity of the paper. [Johnson v. McMurry, 72 Mo. 278 .] Such notice needs not be established by direct proof but may be inferred by the triers of fact from facts and circumstances, but it s

1921Co. v. Vette, 142 Mo. 560 .] This is exactly the meaning of Section 10026, Revised Statutes 1909.' "In Hayes v. Blaker, 138 Mo. App. 24 , 119 S.W. 1004 , this appears: `When proof is made that the holder received the paper before maturity in good faith for a valuable consideration, the burden devolves on the maker to prove the holder had actual notice of the specific fact which originally would affect the validity of the paper. [Johnson v. McMurry, 72 Mo. 278 .] Such notice needs not be established by direct proof but may be inferred by the triers of fact from facts and circumstances, but it s

1910In Bank v. Bank, 109 Mo. App. 665 , 83 S. W. 537 , the Kansas City Court of Appeals, in an opinion by Judge Broadbus, declares the rule to be, that when the drawee pays a check purporting to be drawn upon its bank by one of its customers, that its right of action against any other parties to the check is gone, unless it can be shown that the purchaser was guilty of gross negligence, and that a purchaser is not guilty of such negligence as to authorize a recovery against him from the fact that he has knowledge of circumstances sufficient to put a prudent man on inquiry.

1910In Bank v. Bank, 109 Mo. App. 665 , 83 S. W. 537 , the Kansas City Court of Appeals, in an opinion by Judge Broadbus, declares the rule to be, that when the drawee pays a check purporting to be drawn upon its bank by one of its customers, that its right of action against any other parties to the check is gone, unless it can be shown that the purchaser was guilty of gross negligence, and that a purchaser is not guilty of such negligence as to authorize a recovery against him from the fact that he has knowledge of circumstances sufficient to put a prudent man on inquiry.

1909This species of notice is not applied, by way of a legal presumption, to transactions in commercial paper, as it is to other affairs where it appears the party to be charged with notice was remiss in pushing an inquiry which the facts he knew ought to have incited. [Hamilton v. Marks, supra; Mayes v. Robinson, 93 Mo. 114 .] It is not essential to prove by direct testimony an indorsee knew when he acquired a negotiable instrument, it lacked consideration or was obtained by fraud; but the triers of the facts may find he knew as much from relevant circumstances and, perchance, from such circumsta

1907But the fact that he had such knowledge as would have excited the inquiry of a prudent man, may be considered by the jury, when they come to determine the question whether he did have actual knowledge of the fraud.” While knowledge of facts which would put a prudent person on inquiry, which if made would show a fraudulent intent, is not knowledge of such intent, it is, however, a circumstance to be considered by the jury as tending to show knowledge of such fraudulent intent. [Bank v. Tobacco Co., 155 Mo. 1 . c. 608, 56 S. W. 283 ; Barrett v. Davis, 104 Mo. 549 , 16 S. W. 377 .] As said by Jud

1907But the fact that he had such knowledge as would have excited the inquiry of a prudent man, may be considered by the jury, when they come to determine the question whether he did have actual knowledge of the fraud.” While knowledge of facts which would put a prudent person on inquiry, which if made would show a fraudulent intent, is not knowledge of such intent, it is, however, a circumstance to be considered by the jury as tending to show knowledge of such fraudulent intent. [Bank v. Tobacco Co., 155 Mo. 1 . c. 608, 56 S. W. 283 ; Barrett v. Davis, 104 Mo. 549 , 16 S. W. 377 .] As said by Jud

1907But the fact that he had such knowledge as would have excited the inquiry of a prudent man, may be considered by the jury, when they come to determine the question whether he did have actual knowledge of the fraud.” While knowledge of facts which would put a prudent person on inquiry, which if made would show a fraudulent intent, is not knowledge of such intent, it is, however, a circumstance to be considered by the jury as tending to show knowledge of such fraudulent intent. [Bank v. Tobacco Co., 155 Mo. 1 . c. 608, 56 S. W. 283 ; Barrett v. Davis, 104 Mo. 549 , 16 S. W. 377 .] As said by Jud

1907But the fact that he had such knowledge as would have excited the inquiry of a prudent man, may be considered by the jury, when they come to determine the question whether he did have actual knowledge of the fraud.” While knowledge of facts which would put a prudent person on inquiry, which if made would show a fraudulent intent, is not knowledge of such intent, it is, however, a circumstance to be considered by the jury as tending to show knowledge of such fraudulent intent. [Bank v. Tobacco Co., 155 Mo. 1 . c. 608, 56 S. W. 283 ; Barrett v. Davis, 104 Mo. 549 , 16 S. W. 377 .] As said by Jud

1902Defendant has felt the force of the law-as thus stated, and has endeavored to uphold the verdict in the trial court upon the idea that while suspicion or knowledge of circumstances sufficient to put a prudent man on inquiry will not charge a purchaser with notice, yet, under the authority of Brown v. Hoffelmeyer, 74 Mo. App. 385 , such matter may be given in evidence as tending to show actual notice.

1901Rep. 843; Dutcher et al. v. Wright, 94 U. S. 553 ; Toof et al. v. Martin, 13 Wall. 40 , we held that where a debtor is insolvent within the meaning of the bankrupt act, and the creditor hás knowledge of the insolvency, or where he has such information as would put a prudent man on inquiry and receives a payment, it follows as a necessary inference that it was intended as a preference and, hence, fraudulent.

1901Rep. 843; Dutcher et al. v. Wright, 94 U. S. 553 ; Toof et al. v. Martin, 13 Wall. 40 , we held that where a debtor is insolvent within the meaning of the bankrupt act, and the creditor hás knowledge of the insolvency, or where he has such information as would put a prudent man on inquiry and receives a payment, it follows as a necessary inference that it was intended as a preference and, hence, fraudulent.

1900Edwards v. Thomas, 66 Mo. 468 .

1900Sammons v. O’Neill, 60 Mo. App. 530, 536 ; Dry Goods Co. v. Schooley, 66 Mo. 406 ; State to use v. Mason, 112 Mo. 374 .