Commercial Security Company v. Jack
| Decision Date | 25 November 1914 |
| Court | North Dakota Supreme Court |
Rehearing denied January 2, 1915.
Appeal from District Court, Grand Forks County; C. M. Cooley, J.
From a judgment ordered non obstante veredicto in plaintiff's favor, defendant appeals.
Affirmed.
Scott Rex, for appellant.
In a suit on a promissory note, a verdict should not be directed for the holder, unless the evidence is such that fairminded men can draw only one inference therefrom, and may not be directed where the evidence is uncontroverted, if the inferences to be drawn from the circumstances are open to different conclusions by reasonable men. Arnd v Aylesworth, 145 Iowa 185, 29 L.R.A. (N.S.) 638, 123 N.W 1000.
Where there is an issue as to the title or ownership of the note, or as to whether plaintiff is a bona fide holder, the case is for the jury. 8 Cyc. 289; Walters v. Rock, 18 N.D. 45, 115 N.W. 511; Owens v. Snell, 29 Ore. 483, 44 P. 827; Iowa Nat. Bank v. Sherman, 19 S.D. 238, 117 Am. St. Rep. 941, 103 N.W. 19; Union Nat. Bank v. Mailloux, 27 S.D. 543, 132 N.W. 168; Burroughs v. Ploof, 73 Mich. 607, 41 N.W. 704; Davy v. Kelly, 66 Wis. 452, 29 N.W. 232; Joy v. Diefendorf, 130 N.Y. 6, 27 Am. St. Rep. 484, 28 N.E. 602.
W. J. Mayer, for respondent.
If the witness is not a party to the action, his declarations out of court are mere hearsay, and cannot be received as evidence in chief. They only go to the question of credibility. 10 Enc. Pl. & Pr. 296; Law v. Fairfield, 46 Vt. 425; Hicks v. Stone, 13 Minn. 434, Gil. 398; Davis v. Hardy, 76 Ind. 272.
Where there is an issue as to title or ownership of the note, or as to whether plaintiff is a bona fide holder, the question is for the jury. 8 Cyc. 289; Walters v. Rock, 18 N.D. 45, 115 N.W. 511; Owens v. Snell, 29 Ore. 483, 44 P. 827; Rev. Codes 1905, §§ 6357, 6361.
Proof of failure of consideration does not shift the burden of proof to the indorsee. 4 Am. & Eng. Enc. Law, 2d ed. 325; 8 Cyc. 338; 2 Greenl. Ev. § 172; 1 Randolph, Com. Paper, p. 923; 1 Dan. Neg. Inst. 814; 2 Parsons, Bills & Notes, 438.
Defendant did not plead or prove a defense to the note in the hands of an indorsee. Only material allegations are put in issue by a general denial. 14 Enc. Pl. & Pr. 560, 641; Kinney v. Brotherhood of American Yeoman, 15 N.D. 21, 106 N.W. 44.
There was no rescission in this case. Rev. Codes 1905, §§ 5378, 5380; 6 Enc. Law, 788.
In action for breach of contract, in order that plaintiff may recover more than nominal damages, actual loss sustained must be proved by competent evidence. 8 Enc. Law, 553-556; Roberts v. Minneapolis Threshing Mach. Co. 8 S.D. 579, 59 Am. St. Rep. 777, 67 N.W. 607.
Plaintiff and respondent, a foreign corporation, brought this action to recover upon a negotiable promissory note for $ 350, executed and delivered by defendant and appellant to the American Manufacturing Company, and indorsed by it to plaintiff. The complaint is in the usual form, alleging the corporate existence of plaintiff, the execution and delivery of the note as aforesaid, and the transfer thereof by indorsement to plaintiff for value and before maturity. By his answer defendant expressly admits the allegations as to the corporate existence of plaintiff, the execution and delivery of the note, and the nonpayment thereof, but denies generally the other allegations of the complaint. He then alleges certain new matter by way of defense as follows:
III. "Further answering and for a separate defense herein, defendant alleges that the consideration for the giving of said note was the agreement on the part of said American Manufacturing Company to furnish material for and superintend a voting contest to be carried on in connection with the skating rink business which was then operated by defendant at Grand Forks, North Dakota, and that company thereby stipulated and agreed to increase the gross proceeds of such business during the six months commencing October 1st, 1911, in the sum of $ 3,000; that said American Manufacturing Company failed to furnish the material for such contest, and failed to superintend the same, and wholly failed to increase the gross proceeds of this defendant's business, and that by reason of the premises the consideration for said note has failed."
IV. "Further answering and for a separate defense herein, defendant alleges that the consideration for the note in suit was the agreement on the part of said American Manufacturing Company to furnish material for and to superintend a voting contest to be carried on in connection with the skating rink business which was then operated by defendant at Grand Forks, North Dakota, and that said company thereby stipulated and agreed to increase the gross proceeds of such business during the six months commencing October 1st, 1911, in the sum of $ 3,000, and whereby it agreed to refund to defendant 6 per cent of each dollar it so failed to increase the gross proceeds of such business; that the gross proceeds of defendant's business during the period aforesaid were not increased in any sum whatsoever by the said contest; that said American Manufacturing Company failed to furnish material therefor and to superintend the same, and that by reason of such failure of said company to carry out the terms of said contract, this defendant has been damaged in the sum of $ 1,000 and upwards."
It is observed that nowhere is it alleged in such answer that plaintiff ever had any notice or knowledge of the facts thus averred as a defense, or that there was a rescission of the contract, defendant evidently relying upon the fact that plaintiff, if it purchased the note at all, took it subject to all defenses, and not as an indorsee in due course. In other words, he relied upon the assumption that he had put in issue, by the denial in the answer, plaintiff's allegations respecting the sale and indorsement of the note by the payee to plaintiff before its maturity and for value, and that such issue would, at the trial, be resolved in his favor. The issues thus framed were tried to a jury, and, in brief, the following proceedings took place: Plaintiff proved by the deposition of one G. H. Partin, president of the payee, that the note in suit was, on September 29, 1911, which was prior to its maturity, sold and indorsed by such payee to the plaintiff for value. Thereupon the note, together with the indorsement on the back thereof, "Pay to the order of the Commercial Security Co., American Mfg. Co., G. H. Partin, President," was offered and received in evidence without objection. Defendant's counsel then read from such deposition certain testimony given by such witness on cross-examination, which we need not here set out, as we do not deem it very material. Thereupon plaintiff rested its case. The defendant was then permitted, over plaintiff's objections, to testify relative to the various defensive matters alleged in his answer and to the contract entered into between him and the payee of the note; also to two letters, one dated September 30, 1911, and the other October 16th of that year, both written on letter heads of the payee of the note, addressed to defendant, and signed "American Manufacturing Company by G. H. Partin, President," and both pertaining to such note, the purpose of the latter proof being to discredit Pattin's testimony as to the transfer of the note to plaintiff on September 29th. Defendant's testimony discloses that the note in suit was given by him pursuant to and in consideration of an order or contract between him and the American Manufacturing Company, of date July 14, 1911, as follows:
American Manufacturing Co.
Lexington, Tenn.
Gentlemen:--
Please reserve and ship me at your earliest convenience f. o. b. Minot, N. D., or distributing point, your Piano, Dinner Sets and Advertising matter described on this and reverse side, in payment for which I hereby hand you my instalment note for $ 350, payable to your order, with the understanding that if this order is not approved this contract is to be canceled and returned to me.
My past twelve months' sales were $ 3,000, and you are to increase my next six months' sales to $ 6,000, with the understanding that if my gross sales for the next six months do not amount to $ 6,000 you are to refund me 6 per cent of each dollar you fall short of said increase, and send your bond for $ 350 to cover this agreement with me.
To make this last clause binding upon you, I agree to take shipments of Piano, Dinner Sets and literature promptly, prominently display Piano, issue Piano Votes with each cent purchase, and report every thirty days to you my gross sales for six months, furnish all information requested to assist you in pushing the contest. In consideration of special methods to conduct contest and the special terms, agreements, and reservation herein, this order cannot be countermanded. The title to remain in vendor until fully paid.
Town . . . .Grand Forks. . . .County. . . .Grand Forks. . . . State. . . .N. Dak. . . .Freight Station. . . .Grand Forks. . . .Express Office. . . .Grand Forks. . . .
Salesman: S. H. Grant.
Proof was introduced over plaintiff's objection showing a breach by said company of this contract in certain particulars, but no proof was offered showing notice on plaintiff's part of such contract, or its breach, and, furthermore, it affirmatively appears that no rescission thereof was ever made or attempted by defendant. On the contrary, he...
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