C. I. T. Corporation, a Corp. v. Elliott

• Decision Date: 07 June 1945
• Docket Number: 7223
• Citation: 66 Idaho 384,159 P.2d 891
• Parties: C. I. T. CORPORATION, a corporation, Respondent, v. E. G. ELLIOTT, Appellant
• Court: Idaho Supreme Court

159 P.2d 891

66 Idaho 384

C. I. T. CORPORATION, a corporation, Respondent, v. E. G. ELLIOTT, Appellant

No. 7223

Supreme Court of Idaho

June 7, 1945

1. Bills and notes

In action on note by corporation which acquired it from payee check from plaintiff to payee and credit statement application offered in evidence was "collateral proof" affording a presumption that note was purchased by plaintiff from payee for a valuable consideration, and that defendant, by signing credit statement application, had knowledge of such fact and acquiesced.

2. Bills and notes

In action on note, plaintiff's possession of the note and pleading of it was sufficient evidence of ownership to put defendant on his proof.

3. Appeal and error

In action on note, where, after all testimony by plaintiff was introduced and concluded, the note, a check from plaintiff to payee and a credit statement application were offered in evidence, to which defendant objected because they were not offered when any witness was on the stand, and there was no proof of delivery from payee and no assignment to plaintiff and following argument court reserved ruling and two days later admitted the exhibits in evidence, irregularity in admission of exhibits was not prejudicial error. (I.C.A sec. 26-401.)

4. Bills and notes

Under Negotiable Instruments Act, any one in possession of a negotiable instrument may maintain an action thereon.

5. Pleading

Where demurrer to cross-complaint was sustained it became a superseded pleading.

6. Pleading

A general demurrer should be overruled if complaint alleges sufficient facts to constitute a cause of action entitling plaintiff to any relief against defendant.

7. Sales

Buyer of an article may retain the article and claim such damages as he has sustained through breach of contract by the seller, and it is not necessary to recovery of damages that buyer return the article.

8. Sales

To entitle buyer to recover damages for breach of contract by seller, buyer need not allege or prove a complete failure of consideration, but a partial failure of consideration is sufficient.

9. Set-off and counterclaim

In assignee's action on a note given in payment of a furnace, cause of action in amended cross-complaint alleging that the seller's representations as to the performance of furnace was fraudulent and that defendant signed an agency contract which was sold by seller to plaintiff, and that an interest charge in excess of the legal rate was charged, set forth a transaction forming basis of the action on the note and was properly presented by cross-action. (I.C.A., sec. 5-617.)

10. Parties

In assignee's action on a note given as payment for a furnace, where defendant by cross-action alleged fraudulent representations in performance of the furnace by the seller, failure to require the seller to be brought into the original action as a cross-defendant was error. (I.C.A., sec. 5-617.)

11. Trial

A "finding of fact" is a determination of a fact by the court which fact is averred by one party, and denied by the other, and this determination must be founded on evidence in the case.

12. Appeal and error

In assignee's action on a note given in payment for a furnace in which defendant by cross-action set up fraud of seller in reference to representations as to performance of furnace and usury in respect to an agency contract signed by defendant and sold to plaintiff, where it could not be determined from findings of fact and conclusions of law as to what part of case plaintiff was a bona fide owner and holder of the note, no presumption could be indulged that trial court's decision for plaintiff was correct and the judgment was required to be reversed. (Sess. Laws 1933, chap. 197.)

13. Trial

That plaintiff was the bona fide owner and holder of note sued upon was a "conclusion of law" to be determined from the findings.

14. Trial

A "conclusion of law" is the decision of the court on the facts found by the court when a trial has been had without a jury.

15. Trial

Absence of findings of fact could not be cured by recitals in conclusions of law, since conclusions of law cannot be made to perform the office of findings.

Appeal from the District Court of the Third Judicial District of the State of Idaho, for Ada County. Hon. Charles E. Winstead, Judge.

Reversed and remanded.

R. W. Beckwith for appellant.

A general demurrer to a complaint (or cross-complaint) alleging sufficient facts to constitute a cause of action entitling plaintiff to any relief against defendant should be over-ruled. (E. Idaho L. & T. Co. v. Blomberg, 62 Ida. 497.)

Though a complaint attempts to state several causes of action, if any one of the statements of causes of action is good, a general demurrer should be over-ruled even though joined with a cause that is demurrable. (Aker v. Coleman, 60 Ida. 118.)

In an action on a note, paragraphs of the answer asking for an accounting and for damages growing out of the transaction in which the note was given, are not properly a part of the answer and should be rejected as surplusage; in order to make them available the defendant should state the matters therein alleged in the form of a cross-bill, separate and distinct from the answer, stating a complete cause of action in itself. (First National Bank v. Bews, 3 Ida. 486.)

In action on a negotiable promissory note, when defendant pleads and proves that the note was procured by fraud, the plaintiff must affirmatively show that he took the note as a holder in due course. In such case the burden is on the plaintiff to show that he took without notice of the fraud. (Wright v. Spencer, 39 Ida. 60.)

Frank E. Chalfant for respondent.

Possession of a promissory note constitutes prima facie evidence of ownership thereof. (McCormick & Co., Bankers v. Tolmie Brothers, 42 Ida. 1, 243 P. 355; Bow v. R. & N. Oil, Bas Co., Ltd., 43 Ida. 80, 85, 251 P. 295.)

Every negotiable instrument is deemed prima facie to have been issued for a valuable consideration, and every person whose signature appears thereon to have become a party thereto for value. (Sec. 26-201, I. C. A.)

Miller, J. Ailshie, C.J., Givens and Holden, JJ. concur. Budge, J., did not participate.

OPINION

Miller, J.

The amended complaint, in this action, filed October 27, 1942, alleges that respondent is a foreign corporation, organized and existing under and by virtue of the laws of the state of Delaware, doing business and qualified to do business in the state of Idaho. Other than the above it does not mention its principal, or any place of business. It then alleges that on October 4, 1940, at Boise, Idaho, the appellant made, executed and delivered to Montgomery Ward & Company, a corporation, a promissory note, in writing, for the sum of $ 344.93, payable in 36 successive monthly installments of $ 9.58, except that the final installment shall be the balance due thereon, payments to commence November 3, 1940. A copy of the note is pleaded. It is endorsed "without recourse, Montgomery Ward & Company, by R. P. Minson, Title Credit Manager", and it is alleged that respondent is the lawful owner and holder thereof. It is signed by appellant and his wife, Jessie Elliott. It is alleged that there is due and owing thereon the sum of $ 182.07, with interest at 8% from date. Judgment is sought for said amount, with interest, $ 150.00 attorney's fees and costs.

January 20, 1943, appellant filed general and special demurrers. No criticism of the sufficiency of the allegation of corporate existence is made. Said demurrers were overruled. February 23, 1943, appellant filed his amended answer which contains a general denial, two affirmative defenses and a cross-complaint. The answer denies each and every allegation contained in paragraphs 1, 2, 3, 4, 5 and 6 of the amended complaint, which is the whole thereof. The first affirmative answer and defense alleges a contract with Montgomery Ward & Company for the purchase and installation of a hot air furnace and stoker under representations of efficiency which were alleged to be false and fraudulent; that respondent for some years has been engaged in making agency contracts similar to exhibit "A" with Montgomery Ward & Company, and at the request of respondent and Montgomery Ward & Company, appellant signed the agency contract, exhibit "A" attached to the cross-complaint. The second affirmative answer and defense alleges an information and belief that respondent paid Montgomery Ward & Company $ 300.00, and received the agency contract set forth in exhibit "A"; that the interest charge is in excess of the legal rate (Chapter 197, Session Laws 1933); that the agency contract is usurious and void, and because thereof demands judgment against respondent in the sum of $ 168.75. The cross-complaint is against respondent and Montgomery Ward & Company, with a request that Montgomery Ward & Company be made a party.

February 27, 1943, respondent demurred to the answer on the grounds that it did not state facts sufficient to constitute a defense, was ambiguous, unintelligible and uncertain, and that several causes of action had been improperly joined, and moved to strike the cross-complaint on the ground that it did not allege facts sufficient to constitute a cause of action against respondent as a holder in due course. March 27, 1943, the demurrer to the answer and motion to strike the cross-complaint was overruled and denied and respondent given ten days to plead to or answer the cross-complaint. March 29, 1943, respondent again demurred to the affirmative answers and the cross-complaint on the grounds that they did not state facts sufficient to constitute a cause of action and moved to strike portions of each of said pleadings.

June 11, 1943,...