Blain v. Johnson

Decision Date09 April 1926
Docket NumberNo. 36905.,36905.
Citation208 N.W. 273,201 Iowa 961
PartiesBLAIN v. JOHNSON.
CourtIowa Supreme Court

OPINION TEXT STARTS HERE

Appeal from District Court, Shelby County; Earl Peters, Judge.

Action on promissory note. Plea of want of consideration. Directed verdict for plaintiff. Defendant appeals. Reversed.Wagner, Pike & Knoepfler, of Sioux City, and White & White, of Harlan, for appellant.

Cullison & Cullison and Bennett Cullison, all of Harlan, for appellee.

MORLING, J.

The sole defendant is C. A. Johnson, father of Louis E. Johnson. On March 1, 1920, Louis and wife executed to plaintiff a note and mortgage for $5,000, due March 1, 1925, with interest payable annually. The note contained no acceleration clause. The mortgage did. The defendant had nothing to do with the original transaction. He paid the interest one year on account of his son having a crop failure. Plaintiff called on the defendant and his wife to get them to sign the note about March 1, 1923. The only testimony concerning the transaction is that given by the defendant and his wife. Defendant testified,

“Q. What did he (plaintiff) say about it? A. Well, I couldn't say; he talked so much that I couldn't tell you what he did say or what he didn't say. * * * After Mr. Blain came into the house he commenced about the interest not being paid, and then he wanted me and my wife to sign that there note.

Q. What did he say about it? A. That was all there was to it. He wanted me to sign it. I cannot say about his words; I could not tell all what he did say. * * *

Q. What, if anything, did Mr. Blain say to you that he would do if you did sign this note? A. Nothing. * * *

Q. What, if anything, did he say he would do for Louis * * * your son, Louis, if you signed that note? A. Nothing that I heard.”

On cross-examination defendant testified:

“Mr. Blain came to see me about the first of March, 1923. He told me that the interest was not paid. He told me he was going to foreclose. He didn't say unless some settlement was made. The day I signed this note Ed Blain told me that Louis hadn't paid his interest, and he told me he was going to foreclose because the interest wasn't paid. He talked foreclosure; that is all I know. He made his brags that he had money in the bank to go and foreclose and take the farm. He didn't tell me he was going to foreclose unless that interest was taken care of, not that I know of. All I know, he was going to foreclose, and that is all I know about it.

Q. And you knew he was going to foreclose unless you signed the note didn't you? A. No.

Q. Didn't he tell you he was going to foreclose unless that interest was taken care of? A. Yes; I guess. * * * I cannot exactly remember how many times Blain talked to me about the fact that my (?) interest was due, and he was going to foreclose. He came around every time the interest was due and hounded me and my wife about it; that is all I can say. The day I signed the note he mentioned several times that he was going to foreclose because the interest was past due, but I could not keep track of it. * * * I don't remember that Mr. Blain ever mentioned that he was going to foreclose because the note was due for failure to pay interest.

Q. Did he say that because the interest wasn't paid he had the right to foreclose? A. Well; he talked of foreclosing so much, I could not tell. Until I signed the note he talked a good deal about foreclosing. * * *

Q. Did he talk about anything else besides this note and your signing this note during the time he was there? A. That was all the conversation--to get me and my wife to sign that note.”

Defendant's wife testified that plaintiff asked her to sign:

He said, ‘You better sign them and save trouble.’ I said no, I wasn't going to. * * * He asked me to sign the papers and save trouble for Louis. Each time that he asked me I told him, ‘No, sir.’ * * * I didn't hear him say anything about foreclosing this mortgage.”

On cross-examination she testified:

“Q. He told you and Charlie if you didn't--he told you to sign them and it would save trouble for Louis? A. He told me to sign them, and I didn't know about trouble or anything else.

Q. I understood you to say to Mr. White he told you to sign it so it would save trouble. A. I don't remember at all that he told me that again this year; I don't know. * * * He asked me to sign, but that is all he done. * * *

Q. You won't say one way or the other as to whether he told you why? A. I don't remember, as I was too nervous. * * * He was there three years on me, and I was home alone. I told him I would not sign my property for Louis, and when he stepped out on the porch he said, ‘Maybe some day you will sign.’

The defendant at this time put his name upon the note. His wife did not. On the 7th day of March, 1923, Louis Johnson sent to plaintiff the interest that was due March 1, 1923. The petition in the present suit was filed May 17, 1924, and originally asked for the full amount of the principal and interest against C. A. Johnson. The original makers are residents of South Dakota. The mortgage was set out in the petition, and the principal was claimed to be due on account of the acceleration clause in the mortgage. The claim for the principal, however, was stricken out by the court.

The defendant pleaded want of consideration. The court directed a verdict against him. The only consideration claimed by the plaintiff in argument here is: First, that there was an agreement for forbearance; second, that the addition of defendant's name to the note was an alteration which discharged the original makers.

[1] I. Taking up first the claim of an agreement for forbearance, there is no evidence that defendant requested forbearance, or that forbearance was mentioned in terms. Plaintiff was threatening foreclosure, not unless the defendant signed the note, but unless the interest was paid. Nothing was said about defendant paying the interest except by implication in asking him to sign the note. The interest, according to the note, was already due, so that no implication of agreement to forbear would result from signing the note. The mortgage provides that in case of default in payment of interest the principal, at the option of the holder, should become due. It does not appear either that plaintiff had exercised this option or precluded himself from doing so. He did not say he would forbear or waive his right to enforce payment of the whole amount, or that he would not foreclose. For all that appears, unless an agreement may be implied, plaintiff might have sued or foreclosed immediately notwithstanding defendant having signed the note. Queal v. Peterson, 116 N. W. 593, 138 Iowa, 514, 19 L. R. A. (N. S.) 842;Zimbleman v. Finnegan, 118 N. W. 312, 141 Iowa, 358;Green Bay Lumber Co. v. Fredericksen, 196 N. W. 790, 197 Iowa, 70, 76;Watt v. German Savings Bank, 165 N. W. 897, 183 Iowa, 346; 13 C. J. 348. It cannot be said as matter of law that there was an implied agreement for forbearance. Whether the jury might have found an implied agreement we need not discuss, for it is not likely that the case on retrial will be submitted on the same evidence.

II. It is argued here that the addition of defendant's name to the note was a material alteration which discharged the original makers, and that this was a consideration for defendant's signature. Plaintiff does not claim of course that the alteration was fraudulent. The only theory upon which the addition of defendant's name to the note can be held to discharge the original makers and so afford the consideration for defendant's signature is that expressed in Rhoades v. Leach, 61 N. W. 988, 93 Iowa, 337, 339 (57 Am. St. Rep. 281), in which it is said:

The cases are placed upon the ground that the addition of another name to a note is a material alteration, which will discharge the original parties not consenting thereto, and without inquiry whether the alteration is injurious or beneficial to them, and that the person so executing the note makes it his own, and that it is, in effect, the execution of a new note.” Browning v. Gosnell, 59 N. W. 340, 91 Iowa, 448;Dickerman v. Miner, 43 Iowa, 508.

In the latter case it is said:

“The signature of Johnson imports a sufficient consideration. For aught that appears, he knew that Miner had no knowledge of the addition to the note. The law presumes that he knew the effect of his signature would be to discharge Miner. There is no reason why he should be discharged from his obligation voluntarily assumed. The effect of his act was to execute a new note at the time he attached his name. As the maker of such note he should be held liable.”

The plaintiff's petition, the plaintiff's cross-examination of defendant's witnesses, the plaintiff's argument in this court, and his first claim of consideration, which has been discussed, are diametrically opposed to the basic theory of consideration resulting from the discharge of prior makers.

Plaintiff's petition alleges that about March 1, 1920 (the date of the note), “the defendant, together with Louis E. Johnson and Malinda Johnson, executed and delivered to plaintiff the note sued on; “that as a part of the same transaction the said Louis E. Johnson executed and delivered to the plaintiff a real estate mortgage,” a...

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