First Nat. Bank, Bismarck v. O'Callaghan

• Decision Date: 02 June 1966
• Docket Number: No. 8287,8287
• Citation: 143 N.W.2d 104
• Parties: FIRST NATIONAL BANK, BISMARCK, North Dakota, a Corporation, Plaintiff and Respondent, v. Garry O'CALLAGHAN and Eliza O'Callaghan, Defendants and Appellants.
• Court: North Dakota Supreme Court

Page 104

143 N.W.2d 104

FIRST NATIONAL BANK, BISMARCK, North Dakota, a Corporation, Plaintiff and Respondent, v. Garry O'CALLAGHAN and Eliza O'Callaghan, Defendants and Appellants.

No. 8287.

Supreme Court of North Dakota.

June 2, 1966.

Syllabus by the Court

1. Generally, where a non-negotiable instrument is assigned, the assignee takes subject to existing equities between the original parties, even though the assignee is a bona fide purchaser for value, without notice of any equities or defenses.

2. An assignee of a non-negotiable chose in action acquires no greater rights than those possessed by his assignor, and simply stands in the shoes of the assignor.

3. Parol evidence is inadmissible to vary or contradict the terms of a written contract between the parties unless through fraud, mistake, or accident the contract as written does not express the real intention of the parties.

4. A contract may be superseded or modified by a new contract, and the parties to such contract, while it remains executory, may by a new and later agreement rescind such original contract in whole or in part or replace it by a substitute.

5. What constitutes ratification of a contract depends upon the facts of each individual case. Long delay tends to prove ratification, and continuing to make payments on a disputed contract, with full knowledge of all of the facts, is held, under the circumstances of this case, to constitute ratification.

Cox, Pearce, Engebretson, Murray & Anderson, Bismarck, for plaintiff and respondent.

Higgins & Christensen, Bismarck, for defendants and appellants.

STRUTZ, Judge.

The defendants, for several years, have been customers of Universal Motor Company of Bismark, now known as McCarney Ford. They purchased a number of cars from this concern. One such purchase was made on June 14, 1961, when they purchased a used Falcon on conditional sales contract. Thereafter, on August 4, 1961, the parties desired to purchase a new 1961 Falcon. They thereupon executed a new conditional sales contract but, at the time it was signed, its terms were only partially filled out. One provision that was blank at the time of the execution of the August 4 contract was the amount for which the defendants were to be credited on the trade-in of the 1960 Falcon which they had purchased in June and which was partially unpaid. The blank spaces thereafter were filled in by the motor company and the contract then was assigned to the plaintiff bank and copy sent to the defendants. A dispute arose over the amount of credit which had been inserted in the contract as down-payment, the defendants contending that they should have had credit for an additional $390.29.

While this controversy was going on between the defendants and the motor company, the defendants found they were unable to make the payments as required by the August 4 contract. On December 2, 1961, they signed what in the record is described as a revision contract. Under this agreement, time for paying the contract was extended for an additional year. At the time the defendants signed this revision agreement, they had not yet settled their dispute with the motor company on what amount of credit they should have received on the August 4 contract. But the revision agreement provided for the payment of a definite sum, and the manner in which such balance should be paid. They now contend that the balance due as shown in the revision agreement was too high, because they had not been given the proper credit in the August 4 contract.

However, the defendants made payments called for under the provisions of the revision agreement until a balance of $390.29 remained to be paid. They then refused to make further payments and the assignee bank, as holder of the revision agreement, brought this action for the balance due. The defendants in their answer admit the purchase of the used Falcon on June 14, 1961; they admit buying a new car on August 4, 1961; they further admit the signing of the revision agreement providing for payment of a sum certain, and manner of its payment; they further admit that they have not paid $390.29 which is alleged to be due on the revision agreement. But they contend that this sum is not due and owing from them for the reason that Universal Motor Company, the plaintiff's assignor, failed to give them the right amount of credit on the conditional sales contract of August 4, 1961.

The trial court heard the case without a jury and ordered judgment for the plaintiff for the amount prayed for. The defendants have appealed to this court, demanding trial de novo.

Generally, where a non-negotiable instrument is assigned to another, the assignee takes subject to existing equities between the original parties, even though the assignee is a bona fide purchaser for value, without notice of any equities or defenses. 6...