Burch Mfg. Co. v. McKee

• Decision Date: 10 February 1942
• Docket Number: 45806.
• Parties: BURCH MFG. CO., Inc., v. McKEE.
• Court: Iowa Supreme Court

2 N.W.2d 98

231 Iowa 730

BURCH MFG. CO., Inc., v. McKEE.

No. 45806.

Supreme Court of Iowa

February 10, 1942

O. M. Slaymaker, R. E. Killmar, and D. D Slaymaker, all of Osceola, for appellant.

Elton A. Johnston, of Creston, for appellee.

HALE Justice.

On March 12 1940, the plaintiff, a corporation located in Kansas City Missouri, filed a substituted petition in equity, alleging that the defendant, on May 27, 1936, signed a conditional sales contract and order sheet for a popcorn machine to be shipped to her from Kansas City; that the plaintiff delivered to the defendant the machine ordered (reciting terms of payment); that the defendant made payments up to the sum of $155, the last of which was made on October 1 1937, leaving a balance of $145 due and owing, which is unpaid; and plaintiff asks judgment therefor with interest at 6 per cent from November 1, 1937, and that its lien upon the machine be foreclosed. To this the defendant filed an answer in the way of a general denial, and also a denial of indebtedness in any sum; denying that the plaintiff has any right to prosecute this action, and stating that plaintiff has never been incorporated in this state, and is and was a foreign stock corporation, and has no permit to do business in this state as provided by chapter 386 of the Code of 1935, 1939, and that the contract sued on was made in this state and was an Iowa contract. Judgment and decree were rendered and entered against the defendant, the conditional sales contract was foreclosed, and sale ordered. From this decree defendant appeals.

I. Defendant for her division 1, alleges that the plaintiff failed to prove that there was anything due on the contract sued on; and argues that it was incumbent upon the plaintiff to plead and prove nonpayment of the note sued on when due or at maturity, and that it failed to make such proof. Plaintiff did plead nonpayment, however. The only witness examined in the case was the defendant, who nowhere states that the purchase price was paid. A part of the original contract was a note for the unpaid balance. This note and the contract were admitted in evidence without objection. We think nonpayment was thus sufficiently established. It is the general rule that a rebuttable presumption of nonpayment arises from the fact that a bill or note is in the possession of the party bringing suit upon it. Plaintiff had possession of, and offered in evidence, the note. In the absence of any other evidence this was sufficient to establish nonpayment, which was an affirmative defense. 8 C.J. page 1014, § 1320, note 13; 11 C.J.S., Bills and Notes, page 108, § 662, note 66. See, also, First Trust Joint Stock Land Bank of Chicago v. Kruse, 219 Iowa 1229, 260 N.W. 665, 666, wherein it is stated: "The note was in the possession of and was being sued on by the payee named therein. It seems well established that the introduction by the payee of a promissory note, which is past due and upon which there are no notations or indorsements showing payment, is sufficient to raise a presumption of nonpayment and thus make a prima facie case for the holder of the note." Citing numerous cases. See, also, cases cited in In re Estate of Humphrey, 226 Iowa 1230, 1234, 286 N.W. 488, 490. See, also, Goeb v. Bush, 226 Iowa 1224, 286 N.W. 492, and cases cited.

II. Defendant claims that plaintiff, being a foreign stock corporation, is doing business in the state without a permit, and that the contract used on is an Iowa contract; and for such reasons the plaintiff does not have the right to bring, prosecute, or maintain this action on such contract.

A foreign stock corporation doing business in this state cannot maintain an action upon a contract made by it in this state, unless, prior thereto, it shall have procured a permit to do business in the state. Code 1935, 1939, section 8427. The provision of the statute extends only to any contract made in this state, so that the question at issue in this division of the defense is only as to whether or not the contract upon which the action is based is an Iowa contract. The defendant so alleges, and denies that the burden of proof is upon her to so establish. It is not necessary to decide as to the burden of proof. We think the evidence determines the question at issue. The defendant relies upon her own testimony wherein she states that the contract was made with a man by the name of Denihie, a salesman who solicited the order; and she alleges that the plaintiff is bound by her testimony as a witness called by the plaintiff. Plaintiff, however, is not so bound. The fact that defendant testified to what we think was merely a conclusion, that the deal was made with Denihie, does not preclude plaintiff from contradicting her statement by other evidence. Plaintiff was entitled to the benefit of any conflict, inconsistency, or incongruity in the defendant's testimony, and was not precluded from calling other witnesses to contradict the defendant. Such evidence was introduced in the contract itself, which amounted merely to an order and would not become a contract until accepted in some form by the plaintiff. The date of the contract was May 27, 1936; it is addressed to the Burch Manufacturing Company of Kansas City, Missouri. The material part of the contract is as follows:

"Please ship, subject to strikes, fires, accidents or other delays beyond your control To (Print Customer's Name) Kate McKee Street Osceola Theatre Town Osceola County......State Iowa Via (Freight or Express) Exp where it will first be kept for use within said State the following described property: One Model Gold Standard $60.00 Trade Allowance Burch Popcorn Machines, in consideration of which I agree to pay Burch Mfg. Co. the sum of $405.00 F. O. B. cars Kansas City. This order is taken subject to the approval of Burch Mfg. Co. and is to be paid for on the following TERMS $45.00 cash...