Anthon State Bank v. Bernard
| Decision Date | 11 December 1924 |
| Docket Number | 36110 |
| Citation | 201 N.W. 59,198 Iowa 1345 |
| Parties | ANTHON STATE BANK, Appellant, v. JIM BERNARD, Appellee |
| Court | Iowa Supreme Court |
Appeal from Woodbury District Court.--MILES W. NEWBY, Judge.
ACTION on a promissory note, given in renewal of a note claimed by defendant to have been procured by fraud and negotiated in bad faith. The plaintiff claimed to have been a holder of the original note in due course, and that defendant had waived and was estopped to rely upon the defense of fraud. From a judgment upon a verdict for defendant, plaintiff appeals.
Affirmed.
John H Jackson and Henderson, Fribourg & Hatfield, for appellant.
Griffin Griffin & Griffin and H. B. Walling, for appellee.
This is the second appeal in this case. The first was by the defendant from a judgment against him for the amount due on the note. The case was reversed. 194 Iowa 1090. Upon the second trial, the case was submitted to the jury under instructions which are not objected to. The verdict was for the defendant.
The action was upon a note which was executed by appellee to the appellant bank, and which was a second renewal of a note given by appellee to the Midland Packing Company for stock of the company, sold to appellee by one Chance, an agent of the company. The pleaded defense on the second trial was that the original note was procured by fraud, in that Chance represented that the note was only to be put up as collateral, and agreed that the stock would be resold within four months; and that the note was executed and delivered upon a condition precedent that it should not become effective unless such resale agreement should be fulfilled. The appellant denied the fraud, and pleaded that it was a holder of the original note in due course; that appellee, by twice renewing the note, was estopped to claim fraud in its inception; that, at the time it purchased the original note, it gave its certificate of deposit for the amount, which it paid at maturity to the Midland Packing Company without knowledge of any fraud practiced upon the maker in the procurement of the original note: and that thereby appellee was estopped from setting up fraud in the inception of the note.
I. Appellant complains of the action of the lower court in admitting parol evidence of the contents of a letter claimed to have been written by the president of the appellant bank, and shown to appellee by Chance on the occasion when the original note was given. It was held on the former appeal that proper foundation was laid on the first trial for the admission of the letter. Appellee made unavailing efforts after that trial to find Chance, and to procure the letter. There was no error in admitting parol evidence of its contents.
II. Complaint is made that a letter written by an officer of the packing company to a brother of appellee's was read to the jury. At the time the letter was offered, the court overruled the objection to it, but later sustained it. There is some dispute as to whether the letter was read to the jury. Be that as it may, there was no prejudicial error; the letter was excluded, and the jury must have so understood.
III. The court permitted witnesses to testify to representations made by Chance to them in the effort to include them to buy stock in the packing company at about the time the stock was sold to appellee. The testimony was admissible. Newton v. Young, 197 Iowa 1143, 198 N.W. 514; Henderson v. Ball, 193 Iowa 812, 186 N.W. 668, and cases cited.
IV. A witness for appellee testified, on cross-examination, that he had been defeated in a suit brought by appellant against him on a note given to the packing company, and on redirect examination was permitted to say that the court had directed a verdict for the plaintiff in that case. The original inquiry was only competent for its bearing on the interest of the witness, and it was immaterial how the result in that case was brought about; but we see no possible prejudice to appellant in the fact shown that the witness did not get to the jury with his defense.
V. Appellant, at the close of all the evidence, moved for a directed verdict, and assigns error upon the overruling of the motion. It is urged in argument that the motion should have been sustained because appellee neither alleged nor proved that he had rescinded the contract for the purchase of the stock. The question was not raised by the motion to direct a verdict or otherwise in the court below, and cannot be raised for the first time here. There is, however, no merit in the contention. It was the claim of appellee that the note was not to become effective unless the stock was resold, and that no resale of the stock was made. In such case there was nothing to rescind. Nothing was ever received by appellee, and he had nothing to return. Exchange State Bank v. Buckley, 198 Iowa 437, 194 N.W. 949.
VI. It is also urged that the motion for a directed verdict should have been sustained: (1) because appellant had established that it was a holder in due course of the original note; (2) because the renewal note was given with knowledge on the part of appellee of the alleged fraud in the original note; (3) because appellee failed to inform appellant of such fraud before appellant paid to the packing company the certificate of deposit issued for the note, and is thereby estopped; (4) because there was a failure to establish the fraud pleaded.
Appellee testified that, when he bought the stock and executed the original note, on March 2, 1919, Chance showed him a letter signed by Mr. Heidelberg, the president of the appellant bank, stating that Chance was honest, and would do as he agreed, and that it was a good investment; that his agreement with Chance was that the note was to be left in the Anthon State Bank until the stock was sold. and that Chance would come and resell it within four months, and if he did not, the note was to be given back to appellee; that Chance gave him a written agreement to that effect, as follows:
The original note was, on the same day, negotiated by Chance to the appellant. Appellant's certificate of deposit due in six months was issued to the packing company for the note. Henry Bernard, a brother of appellee's, testified that, before appellee bought the stock, but on the same day, he and Chance were at the bank, and that he said to Heidelberg, "What are these fellows trying to do with this resale stuff, anyway?" and Heidelberg said he didn't know,--they were selling it; that he told Heidelberg the proposition they were putting up to him,-- that they were guaranteeing the resale, and what receipt they had given him,--and asked him what he thought about the receipt; that Heidelberg said, "It is a pretty strong corporation,-- they ought to be able to go through with it;" that he said to Heidelberg, and that Heidelberg did not answer.
Appellee testified further that the profits of the resale...
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