Bross v. Stancliff
| Decision Date | 22 May 1922 |
| Parties | WILLARD P. BROSS, Respondent, v. EVERITT L. STANCLIFF, Appellant |
| Court | Kansas Court of Appeals |
Appeal from the Circuit Court of Jackson County.--Hon. Harris Robinson, Judge.
AFFIRMED.
Judgment affirmed.
Jacob G. Wine for respondent.
Blackmar & Bundschu and Howard Keyes for appellant.
--Plaintiff assignee for the purpose of collection only, brought this suit on a promissory note dated June 19, 1914, due on or before January 1, 1915, for $ 1050, bearing six per cent interest, payable to H. T. Folsom and signed by the defendant. The note contained a clause stating that to secure the payment thereof the maker had attached as collateral security fifteen shares of the capital stock of the Standard Motor and Manufacturing Company, and that all dividends pending life of this loan should be paid to the holder of the note.
The answer set up the defense, First, that the note was given without consideration, and Second, that the note was given by the defendant in connection with a collateral agreement that said note was to be paid out of the profits from the Standard Motor and Manufacturing Company, and in no other way, and in the event there were no profits accruing from said corporation, then the note was to be cancelled and returned to defendant. The reply denied this.
In the course of the trial, it developed that Folsom the payee in the note furnished the money to provide the capital stock of the corporation and that, all in all, he put about $ 6000 or $ 7000 into the enterprise, that the stock was divided into four equal parts, and defendant admits that there was issued to him one-fourth of the stock and that the note in suit was given in payment for the stock, and then, to secure the payment of the note, he endorsed the stock over to Folsom to hold until payment was made. At that time it was thought and hoped the stock would be worth something, and it would have been had the company from which they purchased automobiles not failed to supply them. As it was, the Standard Motor and Manufacturing Company was unable to get automobiles to sell as fast as needed and its business went on the rocks. The corporation was dissolved, and the stock, of course, became worthless, Folsom putting up the money to make it go while the corporation lived.
It is therefore clear from defendant's own testimony that there was a consideration for the note. And as to the agreement that the note was to be paid only out of profits of the company, and if there were none then the note was to be cancelled, defendant admitted that no such agreement was in writing but sought to prove it by parol testimony. Upon objection to this on the ground that it was an attempt to vary the terms of a written agreement by parol testimony, the court refused to permit defendant to prove it that way.
No fraud or mistake in the execution of said...
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