| such as to excite the suspicion of a prudent and careful man, he is not a bona fide holder. Notes, Cent. Dig. §§ 821-823; Dec. Dig. § 339.*] [Ed. Note.-For other cases, see Bills and 2. BILLS AND NOTES (§ 525*) - BONA FIDE PURCHASER-EVIDENCE. Vt. 562; Paine v. McDowell, 71 Vt. 28, 41 Atl. 1042. At the time the town took possession of the premises the Creed note was more than 30 years overdue, and no acknowledgment of its existence as a binding obligation, by part payment or otherwise, Evidence of defendant, in an action on a within that time is found. The last of the note against its maker by a transferee thereof four mortgage notes in time of maturity by indorsement, that the consideration failed was more than 20 years overdue, and no in- not referred to in, the note, requires plaintiff under an agreement contemporaneous with, and dorsement was made on any of those notes to support his prima facie case, not merely by within that time, nor anything done which evidence of purchase for value before maturity, interrupted the operation of the statute. he must show the circumstances connected with of the statute. but by evidence of good faith, to establish which After condition broken the mortgagee be- the purchase, and what he paid for the note. came at law the absolute owner of the prop- [Ed. Note.-For other cases, see Bills and erty, and was entitled to immediate posses-Notes, Dec. Dig. § 525.*] PAYMENT OF sion. Lull v. Mathews, 19 Vt. 322; Fuller 3. BILLS AND NOTES (8 525*) - BONA FIDE v. Eddy, 49 Vt. 11. But the right of entry PURCHASER EVIDENCE VALUE. was lost by a continued interruption and Testimony that one bought a note for value ouster for the term of 15 years. Richmond is not proof of payment of full value, as rev. Aiken, 25 Vt. 324; Martin v. Bowker. 19 gards the question of purchase in good faith. Vt. 526; Merriam v. Barton, 14 Vt. 501; [Ed. Note.-For other cases, see Bills and Smith v. Niagara Fire Ins. Co.. 60 Vt. 682, Notes, Dec. Dig. § 525.*] 15 Atl. 353, 1 L. R. A. 216, 6 Am. St. Rep. 144. Touching the validity of the deed, by virtue of which the plaintiff claims title and recovery in this action, the defendant offered to show as stated in six different clauses set forth in the exceptions, the fair construction of which is that they were all offered at one time, and the exception saved is to the rejection of "all of which offers." To make this exception available all the evidence thus offered must have been improperly excluded. The fifth clause was to show "by the said Mrs. Ager that her signature to said instrument was obtained by duress." The offer does not specify the particular acts or things done constituting the claimed duress, without which the court could not judge whether they were of such probative tendency or not. The same may be said respecting that part of the sixth clause, "that it [the deed] was obtained by undue influence and fraud," without any indication of what the undue influence and fraud consisted. These two offers were not improperly excluded. Consequently the exception taken is too general to have force. Gregg v. Willis, 71 Vt. 313, 45 Atl. 229; McQuiggan v. Ladd, 79 Vt. 90, 64 Atl. 503, 14 L. R. A. (N. S.) 689. This in effect disposes of all questions presented. Judgment affirmed. PIERSON v. HUNTINGTON. 4. BILLS AND NOTES (8 539*) — PURCHASE WITHOUT NOTICE-GOOD FAITH. A finding that the purchaser of a note received it without notice of a defense is not equivalent to one that he acted in good faith. [Ed. Note.-For other cases, see Bills and Notes, Dec. Dig. § 539.*] 5. BILLS AND NOTES (§ 497*) - BURDEN OF PROOF-FAILURE TO SUSTAIN. A finding that the purchaser of a note, the consideration for which is shown to have failed, made no inquiry, is justified in, an action by burden as to good faith, by absence of evidence him against the maker, in which he has the that he made any. [Ed. Note.-For other cases, see Bills and Assumpsit by Amos H. Pierson against MUNSON, J. The note in suit was given by the defendant to the Woodford Distilling Company, and was indorsed by that company to the plaintiff. The plaintiff's case was submitted in depositions, and consisted of the note and evidence of its transfer for value before maturity. The defendant's evidencewas confined to matters affecting the note in the hands of the payee. The plaintiff offered nothing in reply. The trial court has found that the note was indorsed to the (Supreme Court of Vermont. Washington. Oct. plaintiff without recourse, for a valuable con 18, 1909.) 1. BILLS AND NOTES (§ 339*) - BONA FIDE PURCHASER-INQUIRY. A purchaser of negotiable paper must use reasonable prudence in taking it, and if he takes it without inquiry, when the circumstances are sideration, and before maturity; and that it was received without notice of a defense, but without inquiry. The court found further that the assignment was not made in due course of business, basing its conclusion upon the fact that the plaintiff took the note thus indorsed without inquiry, when he was | want of consideration, and an intervening wholly unacquainted with the defendant and his financial condition. The plaintiff claims that there was no evidence to support the finding that he bought the note without inquiry, and that, if the finding is sustained, the conclusion drawn from it falls short of a finding that he is not a bona fide holder. The note was given for liquors in bond, and at the time it was given the payee agreed, by a separate writing, that if the goods did not give satisfaction they might be held subject to its order, and that the note should be returned on a return of the certificates. The goods were not satisfactory, and the defendant returned the certificates and demanded the note; but the payee refused to return it, and soon after sold it to the plaintiff. These facts were found from evidence received subject to the plaintiff's exception. The plaintiff claims that the findings touching his conduct, if warranted by the evidence, are not sufficient to support the judgment. We are referred to a list of cases, decided in many jurisdictions, which concur in holding that one who takes negotiable paper before due for a valuable consideration in good faith, will not be affected by an existing defense, even though he was aware of circumstances that ought to have excited the suspicion of a prudent man; but the cases cited are not in accord with the decisions of this court. It is held in this state that a purchaser of negotiable paper must exercise reasonable prudence and caution in taking it, and that if he take it without making inquiry, when the circumstances are such as would excite the suspicion of a prudent and careful man, he will not stand in the position of a bona fide holder. This doctrine was promulgated in Roth v. Colvin, 32 Vt. 125, and was reaffirmed in Limerick Bank v. Adams, 70 Vt. 132, 40 Atl. 166, and again in Capital Savings Bank v. Montpelier Savings Bank, 77 Vt. 189, 59 Atl. 827. It remains to be seen whether this distinction will be of importance in the determination of the case presented. The case states that nothing appeared tending to show that the plaintiff made any inquiry regarding the note or its maker. The defendant contends that the evidence he introduced was such as cast on the plaintiff the burden of showing that he took the note in good faith, and that this required more than proof of a purchase for value before maturity. The questions raised by this claim are the first for consideration. The production of a negotiable instrument, properly indorsed, is prima facie evidence of the holder's right to recover against the maker; but the maker may compel the holder to support his prima facie case with further evidence by showing a defense that would have been available against the payee. The defenses which have ordinarily been recognized as imposing this additional burden are theft or loss. This enumeration is in accord with the statements generally made in our own decisions. It was said, however, in Quinn v. Hard, 43 Vt. 375, 5 Am. Rep. 284, that it did not appear to be very clearly settled in what cases and to what extent the burden of proof would be thrown upon the plaintiff by the introduction of matters amounting to a defense against the payee. The more recent cases have apparently relieved the subject of some of its uncertainty, for the statement is now generally framed in terms that cover fraud in the transfer as well as in the inception of the note, and a subsequent failure of consideration as well as an original want of it. 4 Ency. Law, 320, 322; 8 Cyc. 236; National Revere Bank v. Morse, 163 Mass. 383, 40 N. E. 180; Sperry v. Spaulding, 45 Cal. 544. The existence of a rule of this character has long been affirmed in this state, whatever uncertainty may have been felt regarding its application. It was directly involved in the decision of Sandford v. Norton, 14 Vt. 228, where it was said that, when the defendant makes out a case upon which none but a bona fide holder for value is entitled to recover against him, it is incumbent upon the plaintiff to show that he is entitled to sue in that character. It was recognized in Blaney v. Pelton, 60 Vt. 275, 13 Atl. 564, where it was said that if the defendant offers evidence tending to prove fraud in obtaining the note, or an entire failure of consideration for it between the original parties, the burden of proof is thereby cast upon the plaintiff to show that he was an innocent purchaser of the note for value while it was current. It was restated and applied in Limerick Bank v. Adams, 70 Vt. 132, 40 Atl. 166, where it was held that evidence offered by the defendants which tended to show that the note was without consideration and void for fraud as between the original parties was properly admitted as a step in their defense, and for the purpose of casting upon the plaintiff the burden of showing that it was not chargeable with knowledge of the fraud, if the fraud alleged was established. In some jurisdictions the courts have found no difficulty in applying the rule to defenses not connected with the inception of the instrument. It is said that after proof that the paper was once in the hands of a fraudulent holder it may justly be presumed to continue in the hands of a holder of that character until the contrary be proved; that possession is not enough to support a recovery by one who must trace title through fraudulent practices; and that this is equally true whether the fraudulent practices were connected with the inception of the paper or occurred subsequently. Parsons v. Utica Cement Co. (Conn.) 73 Atl. 785; Totten v. Bucy, 57 Md. 446. It is frequently said in cases of the rule is found in the presumption that one | cumstances connected with his procurement who has obtained a note illegally or fraudu- of the note, and what he paid for it. Holme lently will cause it to be sued in the name v. Karsper, 5 Bin. (Pa.) 469; Totten v. Buof another. 4 Ency. Law, 323; Perkins v. cy, 57 Md. 446. Evidence that the plaintiff Prant, 47 N. H. 387, 93 Am. Dec. 449; Kel- gave value for the note is very different logg v. Curtis, 69 Me. 212, 31 Am. Rep. 273. from evidence that he gave full value. MilThe situation in which the payee is placed by lard v. Barton, 13 R. I. 601, 43 Am. Rep. a failure of consideration affords a basis for 51. It is proof of the payment of full value the same presumption, and this seems to that raises a presumption of good faith. justify the conclusion that no distinction Market, etc., Bank v. Sargent, 85 Me. 349, need be made between defenses existing at 27 Atl. 192, 35 Am. St. Rep. 376. So we the inception of the contract and those subse- hold that the burden was on the plaintiff quently arising. to show that he took the note in good faith, and that his statement that he bought it for value before maturity did not meet the requirement. The trial court has not found the fact of good faith, and there was nothing before it that required the finding. The plaintiff's contention that the findings made do not amount to a finding that he was not a purchaser in good faith is made immaterial by our holding regarding the burden. The only question now available to the plaintiff is whether any of the facts reported required the conclusion that he was such a purchaser. We see no reason why the additional burden should not rest upon the plaintiff in this case. It is true that the defense had no existence when the note was delivered to the payee, and that it never would have existed but for a further contemporaneous agreement of which the note gave no notice; but the terms of the agreement were such that the acts of the parties with reference to it worked an entire failure of the consideration of the note, and operated as a defeasance of the payee's title to it, and made the transfer of it a fraud upon the maker. The objection that the holder ought not to be prejudiced by a matter not ascertainable from the note has no greater force than it would have had if the fraud or dethan it would have had if the fraud or defect of title had existed at the making of the contract. The effect of the payee's wrongful act upon the maker, and the inducement to a collusive transfer, would be the same in either case. The rule is not one that abridges the holder's substantive right as determined by the law merchant; it merely puts the burden of proof upon the one who knows the facts. If he is an innocent holder, the fact that the maker has a complete defense against the payee cannot affect him. So when the maker shows a transfer made in fraud of his right, it is not unreasonable to require that the transferee offer some evidence tending to show that he bought in good faith. Evidence that the note was taken for value before maturity will not meet the requirement. The plaintiff cannot prove himself a bona fide purchaser of the note merely by showing that he paid value for it before maturity. He must go further, and show that he had no knowledge or notice of the fraud. Vosburgh v. Diefendorf, 119 N. Y. 357, 23 N. E. 801, 16 Am. St. Rep. 836. He must show that he bought the note in good faith as well as for a valuable consideration, and his good faith can be shown only by proof that he had no knowledge of the payee's fraudulent conduct and was not equitably chargeable with notice of it. Parsons v. Utica Cement Co. (Conn.) 73 Atl. 785; Tilden v. Barnard, 43 Mich. 376, 5 N. W. 420, 38 Am. Rep. 197. To establish his We have seen that the note was indorsed to the plaintiff without recourse. It appears from the plaintiff's evidence that he is an attorney, and resides in Chicago, where the payee does business; that he knows the company in a business way; that he bought this and four other notes at the same time; that he is not acquainted with the defendant; and that at the time he bought the note he had no notice of what it was given for. The trial court has found from this evidence that the note was received without notice of a defense. This is not equivalent to a finding that the purchaser acted in good faith, for he may have had suspicions that led him to avoid knowledge, and this may have made him a purchaser in bad faith, although without notice. Goodman v. Simonds, 20 How. 343, 367, 15 L. Ed. 934. If a conclusion of good faith might have been drawn from the absence of notice, it was for the trial court to do it; but the court cannot have drawn this conclusion, for it rendered judgment against the plaintiff. The question whether the plaintiff made inquiry was included in the question of good faith, and the fact that there was no evidence tending to show that he made inquiry justified an affirmative finding that he made none. So if the finding that the plaintiff made no inquiry influenced the court in reaching its conclusion on the question of good faith, this will not defeat the judgment. No special consideration need be given to the distinction between the rule prevailing in most jurisdictions and that adopted here touching the duty of inquiry, for, if the case were to be tested by the former, error would not appear. BELKA et ux. v. ALLEN. 10. FRAUD (§ 11*)-REPRESENTATIONS-MATTERS OF OPINION. (Supreme Court of Vermont. Chittenden. Oct wood and timber on the land, based upon his 9, 1909.) 1. EVIDENCE (§ 113*)-VALUE OF PROPERTY. A sale consummated on terms embodied in an offer to sell is evidence of the true value of the property at that time. [Ed. Note.-For other cases, see Evidence, Cent. Dig. §§ 281-283; Dec. Dig. § 113.*] 2. FRAUD (8 57*)-EVIDENCE-ADMISSIBILITY. In a buyer's action for deceit, evidence as to the value of the property is material, for the measure of damages is the difference between the actual and represented value. [Ed. Note.-For other cases, see Fraud, Cent. Dig. 54; Dec. Dig. § 57.*] A seller's statement as to the quantity of judgment alone, is a mere expression of opinion, and is not actionable. [Ed. Note.-For other cases, see Fraud, Cent. Dig. §§ 12, 13; Dec. Dig. § 11.*] 11. EVIDENCE (§ 113*) - VALUE-ADMISSI BILITY. In a buyer's action for deceit, evidence as to the amount of wood and timber on the land sold is admissible to show its actual value. [Ed. Note.-For other cases, see Evidence, Cent. Dig. §§ 259-296; Dec. Dig. § 113.*] 12. APPEAL AND ERROR ($ 716*)-REVIEW— FACTS NOT SHOWN BY RECORD-GROUNDS OF DECISION. The Supreme Court will not review rul 3. FRAUD ( 55*)-EVIDENCE-ADMISSIBILITY ings withdrawing from the jury allegations of -CIRCUMSTANCES. Gross inadequacy of price is a badge of fraud on the part of the buyer, which may be considered in connection with other evidence, in an action against him for deceit. fraud as grounds of recovery under the declaration, where the record fails to show on what grounds the rulings were based. [Ed. Note.-For other cases, see Appeal and Error, Cent. Dig. § 2966; Dec. Dig. § 716.*] [Ed. Note.-For other cases, see Fraud, Cent. 13. APPEAL AND ERROR (§ 263*) - PRESENTADig. 52; Dec. Dig. § 55.*] 4. FRAUD (§ 55*)-EVIDENCE-ADMISSIBILITY -CIRCUMSTANCES. Gross exaggeration of price is a badge of fraud on the part of the seller, and is admissible against him as a circumstance to show fraud. [Ed. Note.-For other cases, see Fraud, Cent. Dig. 52; Dec. Dig. § 55.*] TION OF GROUNDS OF REVIEW-EXCEPTIONS. will not be considered by the Supreme Court, Alleged error in a charge, not excepted to, though the point was called to the attention of the trial court. [Ed. Note.-For other cases, see Appeal and Error. Cent. Dig. §§ 1516, 1520, 1526, 1527; Dec. Dig. § 263.*] 14. FRAUD (§ 64*)-QUESTIONS FOR JURY. A representation made by a seller of a farm 5. FRAUD (§ 55*)-EVIDENCE-ADMISSIBILITY as to the number of cows "the place would keep' -CIRCUMSTANCES. In a buyer's action for deceit, evidence of the seller's offer to resell the property to the buyer for one-half the former price is admissible as a circumstance to be considered with the oth er evidence. [Ed. Note.-For other cases, see Fraud, Cent. Dig. 52; Dec. Dig. § 55.*] 6. APPEAL AND ERROR (§ 970*)-REVIEW-DISCRETION OF TRIAL COURT. Ordinarily the question of remoteness of evidence is for the trial court, and not reviewable; but a ruling on the question made expressly as a matter of law is reviewable. [Ed. Note. For other cases, see Appeal and Error, Cent. Dig. § 3849; Dec. Dig. § 970.*] 7. EVIDENCE (§ 113*)-VALUE-ADMISSIBILITY. In a buyer's action for deceit in the sale of a farm and personal property, evidence of the seller's offer to resell to the buyer two years after the sale for one-half the former price was not too remote to be an index of value at the time of the sale; there being no material change in the value of the farm, though some of the personal property had disappeared. [Ed. Note. For other cases, see Evidence, Cent. Dig. §§ 259-296; Dec. Dig. § 113.*] 8. FRAUD (§ 11*) - REPRESENTATIONS-MATTERS OF FACT OR OF OPINION. A representation, though false and fraudulent, is not actionable unless it be of a past or present fact and not a mere expression of opin ion. is susceptible of a construction making it applicable to the present as well as the future, and its meaning is for the jury. Dig. 88 67, 69; Dec. Dig. § 64.*] [Ed. Note.-For other cases, see Fraud, Cent. Exceptions from Chittenden County Court; E. L. Waterman, Judge. Action by Albert W. Belka and wife against Martin F. Allen. Verdict and judgment for defendant, and plaintiffs excepted. Reversed and remanded. Argued before ROWELL, C. J., and MUNSON, WATSON, HASELTON, and POWERS, JJ. Martin S. Vilas and Darling & Mower, for plaintiffs. Frank L. Fish and Brown & Hopkins, for defendant. POWERS, J. This is an action on the case for deceit in the sale of a farm situated in Bristol and Starksboro, known as the "Eddy farm." In the winter of 1900, the plaintiffs were living on a farm in Ferrisburgh which they had bought of the defendant, and wished to buy a larger one. The defendant, as administrator of his father's estate, had the control and sale of the Eddy farm, and negotiations were opened for its purchase by [Ed. Note. For other cases, see Fraud, Cent. the plaintiffs. Albert Belka visited the farm Dig. § 12, 13; Dec. Dig. § 11.*] 9. FRAUD ( 61*)-QUESTIONS FOR JURY. with the defendant, and a little later went there with his wife, and still later consummated a trade for the place with the defend As a general rule, in actions for deceit, the question whether a representation was one of fact or opinion is for the jury; but it is not al-ant at the price of $4,000, which included a few head of stock and some farming tools. [Ed. Note.-For other cases, see Fraud, Cent. The plaintiffs paid down a part of the purDig. $$ 67, 69; Dec. Dig. § 64.*] chase price, and gave a mortgage on the place ways so. for the balance, $3,375. This mortgage was assigned to F. H. Farrington, and, the condition thereof having been broken, foreclosure proceedings were begun against the plaintiffs in the fall of 1901, and a decree passed thereunder with redemption limited to some time in the spring of 1902. The farm proved to be unproductive, and the plaintiffs were unable to redeem the place, and left it at the expiration of the equity. At the trial the plaintiffs relied upon and sought to prove the following representations alleged to be false and fraudulent: (1) That the farm kept regularly 25 cows, several head of young cattle, and a team. (2) That hay for the support of said stock had never been bought save during that season, and that that was the first time the farm was ever short of hay, which shortage was due to the mismanagement of the tenant then occupying the place. (3) That the sugar place produced an average yield of from 2,000 to 3.000 pounds per year. (4) That there was wood and timber enough on the farm to pay for it at the price asked. (5) That the farm raised between 300 and 400 bushels of potatoes per acre as an average crop. (6) That a certain lane leading to the pasture on the farm was a part of the farm. (7) That the six cows which went with the farm were No. 1 cows. (8) That the farm was a very good and productive one. (9) That the south line of the farm lay in a certain location then pointed out. 1. The plaintiffs called the defendant as their first witness. They asked him, without objection, if he did not, at a time and place named, and after the Belkas had defaulted payment, tell Mr. Belka that, if he would remain on the place, he (the witness) would sell the farm to him under a new trade at $2.000, and treat the $625 already paid as a payment on the new purchase. The witness denied that he made such a proposition. Later on, when Albert Belka was on the stand, his counsel offered to show by him that the defendant did in fact make him the proposition above set forth at the time and place named. This offer was put upon the ground that it tended to establish the true value of the farm, that it was an implied admission of false representations in the original trade, and that it tended to impeach the defendant by contradicting his testimony regarding the matter. It was objected to on the ground that it was too remote to be an index of value, that conditions had changed, that the personal property had disappeared, and that the plaintiffs could not contradict the defendant on this point; it being an immaterial matter. If a new sale of the farm had been consummated on the terms embodied in this proposition, it would have been legitimate evidence of the value of the property at that time. Hildreth v. Fitts, 53 Vt. 684; Crampton v. Marble Co., 60 Vt. 291, 15 Atl. 153, 1 L. R. A. 120; Rawson v. Prior, 57 Vt. 612. And, however it might have been had the proposed evi a third party, the defendant's own offer, indicating as it did his estimate of the value of the farm, was admissible against him as an admission, provided the question of value was material and the evidence offered did not relate to a time too remote to be of probative value. 16 Cyc. 1136. And the question of value was material, for the measure of damages would be, if recovery was had, the difference between the value of the land as it was and as it would have been had the representations been true. Shanks v. Whitney, 66 Vt. 405, 29 Atl. 367. There is another ground on which the true value of the property at the time of the original sale is important. Gross inadequacy of price is a badge of fraud. Brown v. Sawyer, 1 Aik. 130. That is to say, it is an indication that the buyer has overreached the seller-a suspicious circumstance, which may, when considered in connection wtih the other facts and circumstances in the case, warrant the inference of fraud. Kerr, Fraud, 186, and note; Deepwater Council v. Renick, 59 W. Va. 343, 53 S. E. 552; Douthitt v. Applegate, 33 Kan. 395, 6 Pac. 575, 52 Am. Rep. 533. The importance to be attached to it in a given case is, of course, for the trier, and its effect upon the result necessarily depends largely upon the attending facts and circumstances. Conversely, gross exaggeration of price is a badge of fraud; an indication that the seller has overreached the buyer; a circumstance calculated to arouse a suspicion of fraud, and is admissible in evidence as such. The proposed evidence tended to show that the defendant offered to resell the farm to the plaintiffs for one-half the former price. This, if true, was a circumstance which the jury had a right to consider in connection with the other evidence on the main question. But it is insisted that the evidence was too remote. It related to a time something like two years after the original sale of the farm. Ordinarily the question of remoteness is for the trial court, and not reviewable. State v. Doherty, 72 Vt. 381, 48 Atl. 658, 82 Am. St. Rep. 951; Smith v. Ry. Co., 80 Vt. 208, 67 Atl. 535. But here the ruling was made expressly as a matter of law, so it is reviewable. We do not think the evidence offered was too remote. It is true, as urged, that the conditions had changed somewhat, and some of the personal property had disappeared; but there is not shown to have been, and in the nature of things there could not have been, such a material change in the value of the farm in the two years as to affect appreciably the probative value of the evidence offered. It could all have been made plain to the jury, and such inference drawn as the circumstances required. 2. The plaintiffs offered to show that: "There is only a small amount of wood and timber on the farm, entirely inadequate to pay for the same; such in the aggregate as to comprise only a small amount in value." |