Baird v. Stephan
| Decision Date | 05 May 1925 |
| Docket Number | 4785 |
| Court | North Dakota Supreme Court |
Appeal from the District Court of Barnes County, Berry, Special Judge.
Plaintiff appeals from a judgment and from an order denying his motion for judgment notwithstanding the verdict.
Reversed and remanded with directions to render judgment in favor of the plaintiff.
Reversed and remanded with directions.
A. P Paulson and D. S. Ritchie, for appellant.
Formal notice of acceptance by the guarantee is not necessary, where the guarantor has notice or knowledge from any authoritative source, that the guarantee has accepted the guaranty and is acting on the faith thereof. 28 C. J. § 26, p. 905.
Acts of parties having full knowledge of facts are decisive. Intent of parties is, in all contracts, and especially commercial ones, the polestar of construction, and in ascertaining that intention courts always hold parties to their own construction of their obligations. Austin v Wheeler, 16 Vt. 95.
A guarantor may, by inducing, approving, assenting to, or participating in, any course of dealings, contrary to the letter of the contract, be estopped to set up such variation as a defense. Phenix Mfg. Co. v. Bogardus, 231 Ill. 528, 83 N.E. 284.
The guarantor may ratify any irregularity or change in the contract which he has guaranteed, and his consent to the change or modification will bind him without any new consideration. 20 Cyc. 1445, 1456.
Delivery of an instrument imports a surrender or parting with possession for a permanent purpose. Western U. Teleg. Co. v. Locke, 107 Ind. 9, 7 N.E. 579.
If a person by his conduct induces another to believe in the existence of a particular state of facts, and the other acts thereon to his prejudice, the former is estopped, as against the latter, to deny that that state of facts does in truth exist. 21 C. J. 1060; Engen v. Matthys (N.D.) 196 N.W. 551.
The ground upon which the estoppel rests is that the conduct constitutes an implied representation of the truth of the state of facts in question. Wisconsin v. Torinus, 28 Minn. 175, 9 N.W. 725.
Estoppel by silence arises where a person who by force of circumstances is under a duty to another to speak, refrains from doing so and thereby leads the other to believe in the existence of a state of facts in reliance upon which he acts to his prejudice. 21 C. J. p. 1081; United States v. Schneider, 35 F. 107; Chicago, etc. Trust Co. v. National Storage Co., 260 Ill. 485, 103 N.E. 227; Wagener v. St. Paul, 82 Minn. 148, 84 N.W. 734.
The material recitals in a bond estop both principal and sureties in a bond as effectively as material recitals in a deed estop the parties thereto, subject, however, to the same exceptions and limitations. Dunterman v. Storey, 40 Neb. 447, 58 N.W. 949.
Equitable estoppel rests upon the fundamental principles of right and fair dealing; its creed is justice between man and man. Its objects are not punishment; its remedies are not penal. Its mission is to protect the innocent and blameless. Westbrook v. Guderian, 3 Tex. Civ. App. 406, 22 S.W. 59.
The primary ground of the doctrine is that it would be a fraud in a party to assert what his previous conduct has denied, when, on the faith of that denial, others have acted. Electric Light, etc. Co. v. Bristol Gas, etc. Co., 99 Tenn. 371, 42 S.W. 19.
The vital principle is that he who by his language or conduct leads another to do what he would not otherwise have done shall not subject such person to loss or injury by disappointing the expectations upon which he acted. Dickerson v. Colgrove, 100 U.S. 578, 25 L. ed. 618; Odlin v. Gove (N. H.) 77 Am. Dec. 773.
Combs & Ritchie, and Divet, Holt, Frame & Thorp, for respondents.
The distinction between the principle of estoppel by record or by deed in which case it becomes a matter of law and an estoppel in pais in which it becomes a question of fact for the jury must be observed. 19 Am. Dig. p. 2459; Burbaker v. Okeson, 36 Pa. 519; Morrill v. Richey, 18 N.H. 295; Brown v. Bowen, 30 N.Y. 519; Calhoun v. Richardson, 30 Conn. 210; Jamison v. Miller (Iowa) 20 N.W. 491.
A judgment non obstante cannot be granted either by the district court on motion or by the supreme court on review when such motion and review are based upon "errors of law occurring at the trial" and when there is an issue for the jury to pass upon. McKenzie v. Bismarck Water Co. (N.D.) 71 N.W. 608.
Errors in instructions and errors of law occurring at the trial do not constitute grounds for a motion for judgment notwithstanding the verdict. Pease v. Magill (N.D.) 115 N.W. 260.
A judgment notwithstanding the verdict can be entertained only in the case where it appears upon the whole record that the moving party is as a matter of law entitled to judgment on merits. First State Bank v. Kelly (N.D.) 152 N.W. 125; Cruikshank v. St. P. F. & N. Ins. Co., 77 N.W. 958; Marquardt v. Hubner, 80 N.W. 617; Mehan v. G. N. R. Co., 101 N.W. 183; Kerr v. Anderson (N.D.) 111 N.W. 614.
On February 26th, 1921, the Bank of Sanborn was closed. Thereupon, the State Examiner took charge, and one of his deputies made an examination of the bank. After such examination, the State Examiner advised the stockholders and directors that the bank would be permitted to re-open on the following conditions: (1) Each and all of the depositors therein must sign an agreement to leave their moneys then on deposit in the bank for a certain stated period of time; (2) the cash reserve required by law must be supplied; and. (3) certain bills receivable (consisting of notes, and of certificates of deposit issued by other banks) must either be paid or guaranteed. The first and second conditions were complied with, and the above named four defendants executed and delivered to the State Examiner a written guaranty of the bills receivable. The bank was re-opened on August 1st, 1921. This action is brought upon the written guarantee. As a defense the defendants asserted that the guaranty was delivered on the condition that all the bills receivable covered by the guaranty should be delivered to Fred E. Stephan or Phillip Stephan for collection, and that their receipt for such bills receivable should be attached to the written guaranty; that this condition was not complied with; and, hence, that there was no delivery of the written instrument, and it never became effective. The plaintiff claims that there was no condition attached to the delivery of the instrument; that the alleged condition is not one relating to the delivery, but is one relating to the terms, of the agreement, and that the evidence adduced by the defendants tending to establish the same was inadmissible on the ground that it tended to contradict or vary the terms of a written contract. The plaintiff further contends that even though the instrument was delivered on the condition defendants asserts, they subsequently waived the same; and by reason of their conduct have become estopped to assert that the instrument was delivered conditionally. These issues were the only ones raised upon the trial. There was a verdict in favor of the defendants, and the plaintiff has appealed from the judgment entered upon the verdict and from the order denying a motion for judgment notwithstanding the verdict.
The sole question presented on this appeal is whether the plaintiff is entitled to judgment notwithstanding the verdict. In other words, the question presented for determination is whether, upon the whole record, it clearly appears that the plaintiff is entitled to judgment on the merits as a matter of law. First State Bank v. Kelly, 30 N.D. 84, 152 N.W. 125, Ann. Cas. 1917D, 1044. The record shows that at the time the bank was closed and for a number of years prior thereto the defendant Fred E. Stephan was Vice President and active managing officer of the bank. The defendant Phillip Stephan is Fred E. Stephan's father. The defendants Myrtle E. Stephan and Minnie Stephan are respectively, the wife and mother of Fred E. Stephan. The Stephans were the owners of a large amount of the capital stock of the bank. After the State Examiner had made known the conditions on which he would permit the bank to be re-opened a meeting of stockholders was held on May 14th, 1921 at which the following proceedings were had:
Both Fred E. Stephan and Phillip Stephan were present at and participated in this meeting. On June 11th, 1921, Lofthus, the State Examiner, came down to Sanborn and at that time the following guaranty was executed by the defendants, to-wit:
Guaranty.
For and in consideration of the sum of One Dollar ($ 1.00) to me in hand paid by the Bank of Sanborn, Sanborn, North Dakota, a banking corporation, organized and existing under and by virtue of the laws of the State of North Dakota, the receipt...
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