Borup v. Nininger

• Decision Date: 01 January 1861
• Parties: THEODORE BORUP et al. vs. JOHN NININGER.
• Court: Minnesota Supreme Court

5 Minn. 417

THEODORE BORUP et al. vs. JOHN NININGER.

Supreme Court of Minnesota.

Appeal from order of district court, Ramsey County.

This was an action commenced by the respondent John Nininger against the appellants in the district court of Ramsey County.

The complaint alleges, in substance, that plaintiff deposited, for collection, with the defendants, who were bankers doing business in St. Paul, a note against one Joice residing at St. Anthony, and indorsed by S. S. Eaton, of Nininger, in said state; that the maker was insolvent, and the indorser solvent; and that by reason of the negligence of the defendants in not notifying the indorser of the demand,

&c., the indorser was discharged, and demanded judgment for the amount of the note and interest.

The answer puts in issue the negligence of the defendants, the solvency of the indorser, and the insolvency of the maker, the ownership of the note, and the amount of damages.

It also alleges, that the note was secured by a mortgage, and that at the time of the assignment of the note by Eaton to Nininger, it was agreed that Eaton should not be liable as indorser, and that the indorsement was made simply to pass the legal title to the note; that Nininger paid less than the face of the note for it, and that the mortgaged premises were worth more than the amount due on the note, but were bid in by the plaintiff upon a foreclosure of the mortgage at much less than the real value; that it was the custom of bankers in St. Paul to transmit notes payable at other points to their correspondents at those places, as plaintiff knew, and that defendants knew but one S. S. Eaton, the one residing in St. Paul; that plaintiff did not inform them that the indorser was the S. S. Eaton residing at Nininger.

The reply alleges notice to defendants of the residence of the indorser, and puts at issue the usage of bankers.

It appeared from the evidence that after the maturity of the note, plaintiff transferred it and the mortgage to Mrs. Saunders. Mrs. Saunders married and became Mrs. Kemp, while she held the note and mortgage. While she was Mrs. Kemp, and her husband living, she, through an agent, transferred the note and mortgage to the wife of the plaintiff. Mrs. Nininger foreclosed the mortgage, and realized upon it the sum of $1,475. Immediately previous to the commencement of the suit, Mrs. Nininger transferred the note to the plaintiff.

The plaintiff below (respondent here) had a verdict, and a motion for a new trial by the appellants was denied. From the order denying it this appeal was brought.

Points and authorities for appellants: —

1. The first exception we believe well taken, because it does not appear that the note was left with Dr. Borup, and whatever the undertaking of the defendants was, it arose upon the facts transpiring before and at the time the note was left for collection. The contract, if any, was then consummate. It is needless to enlarge upon the danger of letting in loose conversations, after the fact fixing the defendants' liability, to characterize such liability.

2. The second exception we rely upon as strictly a cross-examination. The witness had testified to the transfer of the note and mortgage to himself; and that he became the owner by reason of such transfer. It was, therefore, competent for the cross-examination to inquire into all the facts and incidents of the transfer elicited from the witness in chief. The same reasoning applies with added potency and force to the fifth exception. The witness Eaton had testified, on his direct examination, that he had indorsed the note in controversy: "You say you indorsed the note, now tell us all about it, how you came to do so, and under what circumstances, if at all, you so indorsed." It is difficult to perceive how a cross could be more apposite to a direct examination than this.

3. The witness Eaton, after having been excluded from testifying to solvency subsequent to the maturity of the note, was allowed (vide third exception) to give the value of his mill, which was commenced in May, 1858, and finished January 16, 1859, nearly a year after the note matured. The testimony was unnecessary and immaterial, except in rebuttal (where it could not have been used in this case, as the defendants offered no proof upon this point), because the note was prima facie evidence of the damages. It was competent for the defendants to have mitigated the damages ascertained prima facie from the note, by showing insolvency of the indorser, and of consequence no injury. This of course could only be shown or disproved at the time the action accrued to the plaintiff. The same reasoning applies to the seventh exception. Sedgwick on Damages, 347, &c. Story Agency, §§ 222, 236; Allen v. Suydam, 20 Wend. 321.

4. What relevancy to the issues upon trial had the testimony embraced in fourth exception, i. e., that witness had known Borup in 1852, had built a mill for him, and presumed he had talked with him about building his own mill? This class of testimony tended to mislead the jury, was irrelevant, and therefore erroneously received.

5. It is enough to say, in support of the sixth exception, that the objection was too general to prevail. The testimony was competent because it tended to show, that the plaintiff regarded a notice upon S. S. Eaton, of St. Paul, as good, and to disprove the alleged notice to defendants. The plaintiff will of course take nothing by a general objection, if the testimony was admissible for any purpose. Califf v. Hillhouse, 3 Minn. [311].

6. Under this point may be grouped the 8th, 19th, 20th, 23d, and 24th exceptions. This court will observe that the action was tried below upon the theory, that the plaintiff's cause of action was an incident to the note and its ownership. The complaint alleges ownership of the note at maturity, and at the commencement of this action. The answer makes a distinct issue upon the ownership at the commencement of the suit. The plaintiff swears that he was the owner and holder of the note at maturity, at the date of action begun, and at the time of trial. It is too late for the plaintiff now to stand upon a different hypothesis.

7. The court erred in charging the jury as stated in the eighteenth exception, to wit: That there was no evidence that the plaintiff ever transferred his claim or cause of action against the defendants for damages. The fact that he had at one time transferred the note and mortgage was confessed and proved, and was of itself sufficient to warrant a jury in finding that the cause of action, if at all severable from the note, was also passed. The court had no business to charge a conclusion of fact. In this connection, we refer to the tenth exception. The proof then offered was, to our mind, clearly pertinent, as tending to show that the cause of action had been transferred. The facts show that Mrs. N. then held the note and mortgage; that they were left with Mr. Simonton for foreclosure by plaintiff; and that her attorneys, while holding the papers for the purpose, notified the defendants of the foreclosure. The facts charge plaintiff with privity of this letter. Why notify the defendants if no relations were supposed to exist between the note and mortgage and Mrs. Nininger, the pretended owner and holder?

8. The court below charged in No. 16 of exceptions, that the note might still be put in suit against the parties to it, i. e., the maker. Would it be a good answer that plaintiff had in this action a recovery against the defendants for the full face of the note? Scarcely not, if they are, as the court charged, distinct matters. They might be owned by different parties, as they in fact are in this case. Here, then, we have two full recoveries upon the same obligation. It is clear to us that the court below erred in rejecting exhibits seven and eight, embraced in exception nine. We were allowed to show all the transfers down to the pretended foreclosure, and the proceedings upon foreclosure are excluded. Why? The answer alleged a foreclosure — the reply admitted it, and alleged that the purchase money was applied upon the note last falling due. It was certainly proper to show that the mortgage notice described both notes, and was foreclosed for their benefit.

9. The court erred in rejecting the evidence contemplated by question found under eleventh exception. The answer alleges the custom of bankers in general, and of defendants in especial, respecting such paper, and plaintiff's knowledge then of the question asked, was competent as a preliminary one to showing plaintiff's knowledge of such custom or such designs, with defendants' institution, as charged him with notice. If the defendant had notice of a particular custom of this bank, or if he dealt with the bank, he is chargeable with notice in any event. How could the defense prove the fact of notice, either actual or presumptive, except by first establishing the preliminary fact that the custom existed? But the objection itself was bad in form. It presupposes that a custom, in order to be of force in its operation upon contracts, must be universal or world-wide, whereas, it has the force of law if it be general amongst a particular class in a distinct community. 1 Cush. 186-188; Mills v. Bank U. S. 11 Wheat. 430; 6 Condensed R. 695, &c. Bank of Washington v. Triplett, 1 Peters, 31-33. The remarks and authorities above are also applicable to the twenty-sixth exception.

10. The two exceptions embraced in No. 12 of exceptions are regarded as entirely fatal to the verdict, if there was nothing else of the cases. The defendants offered to show substantially that the indorsement was without consideration, and that the indorsee, for value, agreed not to hold the indorser liable, and that Eaton's name was written upon the back of the note simply to pass the legal title. That the plaintiff cannot recover more than he has been injured, will not be denied (vide Story on Agency, supra);...