Colorado Milling and Elevator Co. v. Proctor

• Decision Date: 11 February 1938
• Docket Number: 6481
• Citation: 58 Idaho 578,76 P.2d 438
• Parties: COLORADO MILLING AND ELEVATOR CO., a Corporation, Doing Business Under the Firm Name of and at the PARMA ELEVATOR, Respondent, v. A. H. PROCTOR, Appellant
• Court: Idaho Supreme Court

76 P.2d 438

58 Idaho 578

COLORADO MILLING AND ELEVATOR CO., a Corporation, Doing Business Under the Firm Name of and at the PARMA ELEVATOR, Respondent, v. A. H. PROCTOR, Appellant

No. 6481

Supreme Court of Idaho

February 11, 1938

CORPORATIONS - DOING BUSINESS UNDER ASSUMED NAME - NEGOTIABLE INSTRUMENTS-LACK OF CONSIDERATION-BURDEN OF PROOF-WITNESSES-CROSS-EXAMINATION.

1. Where foreign corporation's corporate existence and authorization to do business in state were admitted by stipulation, corporation could maintain action on note payable to it in its assumed name, in absence of statute prohibiting a corporation from contracting in an assumed or trade-name or a name acquired by user or reputation.

2. In absence of statutory prohibition, a corporation may have and be known to the public by more than one name, and, in addition to name given by charter, corporation may acquire other names by user or reputation, and a contract entered into by or with corporation under an assumed name may be enforced by either party, if corporation's identity is established.

3. In foreign corporation's action on note payable to it in its assumed name, admission of certified copy of corporation's certificate of assumed name on file with county recorder was not prejudicial, even if exhibit was immaterial.

4. In foreign corporation's action on note payable to corporation in its assumed name, note was not inadmissible on ground that it had been given to named payee and not to corporation, where there was evidence that named payee and corporation were identical.

5. That foreign corporation suing on note payable to corporation in its assumed name and payee named in note were identical could be established by ordinary methods of proof.

6. In action on note, note was not inadmissible on ground that consideration had been put in issue and that no consideration had been shown, since under statute a note imports consideration, and party seeking to avoid note has burden to show lack of consideration. (I. C. A., sec. 26-201.)

7. Error could not be predicated upon exclusion of testimony on cross-examination, where, at time of making objections to cross-examination, matters inquired about had not been propounded to witness on direct examination.

8. Error, if any, in excluding testimony on cross-examination of witness who had not been interrogated about matters on direct examination was not prejudicial, where later, during trial witness was thoroughly cross-examined with reference to those matters.

9. In action on note, where defendant urged entire lack of consideration on ground that he had delivered to plaintiff an amount of wheat more than sufficient to satisfy plaintiff's demands, nature of parties' agreement amount of wheat delivered, and market price, or price actually credited by plaintiff, were for jury under conflicting evidence.

APPEAL from the District Court of the Seventh Judicial District, for Canyon County. Hon. John C. Rice, Judge.

Action upon a promissory note. Judgment for plaintiff. Affirmed.

Affirmed. Costs awarded to respondent.

Cleve Groome, for Appellant.

A corporation may not do business in this state under any name other than that given it by its charter or articles of incorporation, and a corporation cannot maintain an action on a negotiable instrument unless it be given in its true name for without its true name, it cannot legally perform corporation acts. (Secs. 29-103, 29-107, 29-114, 29-145, 29-147, 29-146, and chapter 5 of article 29, I. C. A.; chapter 5, title 52, 1932 I. C. A., sec. 52-504; Scarsdale Publishing Co.--The Colonial Press v Carter, 63 Misc. 271, 116 N.Y.S. 731; Sykes v. People, 132 Ill. 32, 23 N.E. 391; Thompson on Corporations, (3d) sec. 60.)

Absence or failure of consideration is a matter of defense as against any person not a holder in due course, whether the failure is an ascertained and liquidated amount or otherwise. (Sec. 26-205, I. C. A.)

Lack or failure of consideration is always available as a defense so long as there is a possibility of an action being brought to enforce the collection of the alleged claim. (Zimmerman v. Dahlberg, 46 Idaho 583, 269 P. 991; Morton v. Whitson, 45 Idaho 28, 260 P. 426; Frank v. Davis, 34 Idaho 678, 203 P. 287; Morrow v. Hanson, 9 Ga. 398, 44 Am. Dec. 346; 37 C. J. 803, sec. 148.)

As between the original parties the defense of lack or failure of consideration is available on a renewal note where the original note was without consideration. (Rudolph v. Hewitt, 11 S.D. 646, 80 N.W. 133; Farmers & Mechanics' Bank v. Hawn, 79 N.Y.S. 524; Eule v. Dorn, 41 Tex. Civ. App. 520, 92 S.W. 828; Hancock, Administrator, v. Twyman, (Ky.) 45 S.W. 68.)

A witness may be asked any question upon cross-examination which tends to test his memory, veracity or credibility. We claim it was an error for the court not to permit the cross-examination of the witness, Walmsley, as set out in specifications of error. (Taggart v. Bosch, 5 Cal. Unrep. 690, 48 P. 1092-1094.)

S. Ben Dunlap, for Respondent.

The rule that a corporation has but one legal name and that that one is the name formally conferred upon it by the state, does not mean that the corporation can never act under a different name. A statement that it is only by such name that the corporation can ever be bound would not have the support of the authorities generally. Opposed to any such idea is the rule that a corporation may assume a name, just as a natural person may, for the purpose of carrying on its business, entering into a contract, etc., unless there is some statutory provision to the contrary, and a contract entered into by or with a corporation under an assumed name may be enforced by either of the parties if the identity of the corporation is established by the proof. (Fletcher Cyc. Corp., vol. 2, p. 1687, sec. 740; Standard Distilling & Distributing Co. v. Springfield Coal M. & T. Co., 146 Ill.App. 114, affid. 239 Ill. 600, 88 N.E. 236; Melledge v. Boston Iron Co., 5 Cush. (Mass.) 158, 51 Am. Dec. 59; 56 A. L. R. 450 note.)

This court has held many times that where a party contracts with a corporation, he is estopped to thereafter deny that it was a corporation. (See Ferguson Fruit & Land Co. v. Goodding, 44 Idaho 76, 258 P. 557; New Idea Spreader Co. v. Satterfield, 45 Idaho 753, 265 P. 466; Marshall-Wells Co. v. Kramlich, 46 Idaho 355, 267 P. 611.) So in the instant case, appellant having dealt with the respondent corporation, and executed and delivered to plaintiff the note in issue, payable to plaintiff under the trade name (and their amended answer admitted so doing), he is now estopped from denying the corporate existence and the capacity of respondent to take said note as payable to it by its trade name. (Shaw Supply Co., Inc., v. Morgan, 48 Idaho 412, 282 P. 492.)

A promissory note imports consideration, and it is not even necessary to allege consideration in the complaint. (Bow v. R. & N. Oil Gas Co., 43 Idaho 80, 251 P. 295; Fruitland State Bank v. Lauer, 34 Idaho 272, 200 P. 127.)

Where defendant pleads failure of consideration he must establish such defense by a fair preponderance of evidence. (First Nat. Bank of Blackfoot v. Doschades, 47 Idaho 661, 279 P. 416, 65 A. L. R. 900.)

Error may not be predicated upon the exclusion of testimony on cross-examination with reference to matters not touched upon by the witness upon his direct examination. (Erickson v. Edward Rutledge T. Co., 34 Idaho 754, 203 P. 1078; State v. Smailes, 51 Idaho 321, 5 P.2d 540.)

BUDGE, J. Holden, C. J., and Morgan, Ailshie and Givens, JJ., concur.

OPINION

BUDGE, J.

Respondent instituted this action for the collection of a promissory note in the face amount of $ 1,021.92, executed by appellant to "Parma Elevator," and alleged that respondent was doing business at Parma, Idaho, under the name of "Parma Elevator." Appellant's demurrer, considered more fully hereafter, was overruled and appellant answered. Execution of the note was admitted, but that it was executed for a good and valid consideration was denied. For further defense appellant alleged that in August, 1930, he delivered to respondent 3,898 bushels of first grade Federation wheat at the then prevailing market value, namely $ 1.25 per hundred, and that he had been credited at the rate of only 65 cents per hundred, and further, that after delivery of the 1930 wheat crop respondent was actually indebted to appellant on the wheat delivered, the amount delivered more than satisfying respondent's demands against appellant. The jury before which the action was tried found for respondent and against appellant in the sum of $ 510.96, upon which verdict judgment was entered for such amount, plus costs and attorney's fees, totaling $ 756.61, whereupon this appeal was taken from the judgment and from an order overruling appellant's motion for a new trial.

Appellant's first assignment of error is to the effect that the court erred in overruling the demurrer to the amended complaint for the reason that a corporation may not do business under an assumed or trade name in this state. The note sued upon by respondent was made payable to "Parma Elevator." Respondent alleged that it was doing business at Parma, Idaho, under the name of "Parma Elevator." The corporate existence of respondent Colorado Milling and Elevator Co., and that it was qualified to do business in the state were admitted by stipulation. The facts resolve the question to be decided principally into whether a corporation may contract in an assumed or trade name or a name acquired by user or reputation, in the absence of a statute prohibiting it from doing so, no law of this state having been found prohibiting a corporation from transacting business or contracting under an assumed or trade...