Everton v. Blair
Decision Date | 29 March 1978 |
Docket Number | No. 12553,12553 |
Citation | 23 UCC Rep. 1228,99 Idaho 14,576 P.2d 585 |
Parties | , 23 UCC Rep.Serv. 1228 Keith D. EVERTON, Plaintiff-Respondent, v. Sid BLAIR, Defendant-Appellant. |
Court | Idaho Supreme Court |
John C. Ward and David R. Lombardi of Langroise, Sullivan & Smylie, Boise, for defendant-appellant.
Dean E. Miller and Dean J. Miller of Gigray, Miller, Downen & Weston, Caldwell, for plaintiff-respondent.
Defendant-appellant Sid Blair was involved in a Mexican land deal with Playa International, a corporation of which he is a 9% Shareholder. Blair was asked by the entrepreneurs of the land deal, other shareholders in Playa, to provide an additional $20,000 to finalize the deal. He stated that he could only come up with $10,000.
At this point the testimony at trial was disputed. Plaintiff-respondent Keith Everton claims that Blair then asked him (Everton) for a personal loan of $10,000 so that Blair could make the needed $20,000 payment and that $10,000 was transferred from Everton to Blair in August of 1973.
Blair executed a note for $10,000 payable to Everton in February of 1974. Everton contends this note was executed because he realized he only had Blair's word on the $10,000 loan and he wanted to be sure that he got his money back. He therefore demanded Blair give him the note.
Blair contends that Everton asked for the note for accounting and income tax reasons only and it was understood that the note would not be presented for payment. Blair contends that Everton put the $10,000 into the deal for himself and not for Blair.
Everton did demand the note be paid and brought this suit. One of Blair's defenses was that Everton had orally waived the note. A jury trial was held and a verdict was returned for Blair. Judgment was entered on December 6, 1976. On December 14, 1976 Everton moved for a new trial, basing that motion on improper jury instructions. A hearing was held on this motion and the trial judge granted the motion on February 10, 1977 and ordered a new trial. The reasons given for this order are:
Blair appeals, contending the jury instruction on waiver was proper, therefore making the ordering of a new trial reversible error.
The trial court is vested with broad discretion in granting a new trial. On appeal, the determination of the trial court will not be overturned absent a manifest abuse of discretion. Dawson v. Olson, 95 Idaho 295, 507 P.2d 804 (1973); Rosenberg v. Toetly, 93 Idaho 135, 456 P.2d 779 (1969); Mattson v. Bryan, 92 Idaho 587, 448 P.2d 201 (1968); Blaine v. Byers, 91 Idaho 665, 429 P.2d 397 (1967); Cassia Creek Reservoir Co. v. Harper, 91 Idaho 488, 426 P.2d 209 (1967); Kuhn v. Dell, 89 Idaho 250, 404 P.2d 357 (1965); Say v. Hodgin, 20 Idaho 64, 116 P. 410 (1911). The trial court is under a duty to instruct the jury on every reasonable theory recognized by law that is supported at trial. Hodge v. Borden, 91 Idaho 125, 417 P.2d 75 (1966); Domingo v. Phillips,87 Idaho 55, 390 P.2d 297 (1964); Wurm v. Pulice, 82 Idaho 359, 353 P.2d 1071 (1960). However, instructions should not be given which are not based on evidence from the trial. Bratton v. Slininger, 93 Idaho 248, 460 P.2d 383 (1969); Fawcett v. Iirby, 92 Idaho 48, 436 P.2d 714 (1968). Instructions should not be given on a theory which is not legally sound. Corey v. Wilson,93 Idaho 54, 454 P.2d 951 (1969); Cassia Creek Reservoir Co. v. Harper,supra.
An instruction which incorrectly states the law provides grounds for ordering a new trial. Corey v. Wilson, supra; Walker v. Distler, 78 Idaho 38, 296 P.2d 452 (1956); I.R.C.P. 59(a)(7).
The issue before us is whether Everton can invalidate a promissory note by an oral statement. The jury was given the following instruction on the law of waiver:
The Uniform Commercial Code governs proceedings on promissory notes. I.C. § 28-1-101 et seq. The specific methods of discharge on a promissory note are listed in I.C. § 28-3-601. These methods of discharge are exclusive. I.C. § 28-3-601, comment 1. Cancellation and renunciation are listed methods of discharge. I.C. § 28-3-605.
For a promissory note to be cancelled without consideration, the cancellation or renunciation of rights must be done by a signed writing. This is clear from the language of I.C. § 28-3-605. Bihlmire v. Hahn, 43 F.R.D. 503 (E.D.Wis.1967); see Anderson v. Ruberg, 66 Idaho 417, 160 P.2d 456 (1945). 3 R. Anderson, Uniform Commercial Code 123-124 (2d ed. 1971).
The same rule applied under the Uniform Negotiable Instruments Law § 122, the predecessor to U.C.C. § 3-605. "A renunciation must be in writing . . . ." Brown v. Brown, 53 N.M. 379, 208 P.2d 1081, 1095 (1949).
Blair contends the alleged oral statement of Everton works to cancel the note in another way. He asserts that Everton, as the payee, is not the holder in due course of the instrument. I.C. § 28-3-302. All defenses available in an action on a simple contract are available against one not a holder in due course. I.C. § 28-3-306. Blair proposes that waiver is one of these defenses and therefore a waiver will effectively cancel the note.
Blair cites as authority for this proposition Bowie Nat'l Bank v. Stevens, 532 S.W.2d 67 (Tex.1975). This case provides little support for the waiver theory. The facts of that case show that a bank was seeking to foreclose a note and deed for delinquencies in payment. The court held that by accepting delinquent payments in the past the bank had waived their right to timely payment until Stevens was notified that he could no longer rely on this waiver. What the court found was an estoppel waiver on a condition of the contract, that condition being the right to foreclose for delinquent payments.
Waiver of a condition is...
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