First National Bank of Langdon v. Prior
| Decision Date | 22 May 1901 |
| Court | North Dakota Supreme Court |
Appeal from District Court, Cavalier County; Sauter, J.
Action by the First National Bank of Langdon against Thomas H. Prior and Emma Prior. Judgment for plaintiff, and defendants appeal.
Modified.
Judgment modified allowing a credit on the notes in suit of the sum of $ 35 on September 22, 1894, and further credit of $ 161 on July 31, 1892, amounting, with interest. Appellants recovered their costs and disbursements. Judgment modified and affirmed.
J. C Monnett, for appellants.
The true consideration for an instrument may always be shown by parol testimony, notwithstanding there is a consideration expressed in the instrument itself. Bank v. Snyder, 44 N.W. 357; Boller v. Sacks, 33 N.W. 862; Kickland v. Wooden Ware Co., 31 N.W. 471; Cutler v. Steele, 53 N.W. 521; Dicken v. Morgan, 7 N.W. 145; Keefe v. Briggs, 20 N.W. 91; Fraley v Bentley, 1 Dak. 25, 46 N.W. 506; Perkins v McAuliffe, 81 N.W. 645; Landgan v. Iverson, 80 N.W. 1051; Hayes v. Peck, 8 N.E. 234; Tucker v. Tucker, 13 N.E. 710; Chapin v. Dobson, 78 N.Y. 80; Walker v. Haggerty, 46 N.W. 221; Palmer v. Roath, 49 N.W. 590. It is always competent to show by parol that the obligation of an instrument has been discharged by a parol agreement collateral thereto. Crossman v. Fuller, 17 Pick. 171; Julliard v. Chaffee, 92 N.Y. 531; Harrington v. Samples, 30 N.W. 671; Gould v. Elgin, 26 N.E. 497; Collins v. Stanfield, 38 N.E. 1091; Kane v. Cortesy, 2 N.E. 874; Singer Mfg. Co. v. Forsythe, 9 N.E. 372; Rockeman v. Improvement Co., 44 N.E. 990; Becker v. Knudson, 56 N.W. 192; Fleischman v. Ver Does, 82 N.W. 757; Berdman v. Goodell, 9 N.W. 900. The settlement of a controversy always constitutes a good consideration. Canham v. Mfg. Co., 3 N.D. 229, 55 N.W. 582; § 4336, Rev. Codes; Lindley v. Lupton, 76 N.W. 1037; Mason v. Beach, 55 Wis. 607. One who receives and retains the beneficial results of a contract made in his behalf by another cannot deny the authority of the person making it, and is deemed to consent to all the obligations arising from such contract. Lull v. Anamosa Bank, 81 N.W. 784; § § 3865, 4339, Rev. Codes; Union Nat. Life Ins. Co. v. Kirchoff, 27 N.E. 90; Hawkins v. Bank, 49 N.E. 957; Thomas v. Bank, 58 N.W. 943; Phillips v. Bank, 35 N.E. 982; Hartley State Bank v. McCorkell, 60 N.W. 197; Anderson v. Johnson, 77 N.W. 26; State School F. Co. v. School Dist., 77 N.W. 62; Meehan v. Forester, 58 N.Y. 278; Johnson v. Investment Co., 68 N.W. 383; Hughes v. Ins. Co., 59 N.W. 112; Gardner v. Warren, 17 N.W. 583. The fact that a contract made by a national bank is ultra vires as contrary to the national banking act, cannot be set up as a defense to an action arising out of such contract. Merchants Nat. Bank v. Hanson, 21 N.W. 849; Bank v. Mathews, 98 U.S. 621; Voltz v. Nat. Bank, 42 N.E. 69; Kelly v. Newbury Port, 6 N.E. 745; Prescott v. Butler, 32 N.E. 909. A party who makes a contract through an agent takes the contract subject to all the instrumentalities employed by the agent in its consummation, and to all the conditions attached to it. § 3865, Rev. Codes, Wyckoff v. Johnson, 48 N.W. 837; Bank v. Bank, 80 N.W. 48; State Bank v. Kelly, 80 N.W. 520; People's State Bank v. Francis, 8 N.D. 369, 79 N.W. 853; Railway Co. v. Schuyler, 34 N.Y. 30; First Nat. Bank v. Redpath, 81 N.W. 623; Fairchild v. McMahon, 34 N.E. 779; Union Trust Co. v. Phillips, 63 N.W. 903. If a deed not properly acknowledged, and therefore not entitled to record, is in fact recorded, such record is not admissible in evidence. Ann Arbor Sav. Bank v. Ellison, 71 N.W. 873; Wambole v. Foot, 2 Dak. 1; Saginaw v. Tennant, 68 N.W. 1118; § 3269, Comp. Laws. In selling the chattel mortgaged property the requirements of the statute were not complied with and the foreclosure amounted to a conversion by the mortgagee. Best Brewing Co. v. Pillsbury, 5 Dak. 62, 37 N.W. 763; North Dakota Elev. Co. v. Clark, 3 N.D. 26, 53 N.W. 175. The mortgagor is not estopped from disputing the foreclosure and taking advantage of irregularities in the sale by reason of his having bid at such sale. Kidder v. Aaron, 72 N.W. 893; Canning v. Harland, 15 N.W. 492; Weaver v. Peasely, 45 N.E. 119; Holcomb v. Boynton, 37 N.E. 1031; Irrigation Co. v. Lashmet, 81 N.W. 617; Cloud v. Malvin, 75 N.W. 645; Spencer Co. v. Papack, 70 N.W. 748; Scroggin v. Johnson, 64 N.W. 236; Eshenberry v. Edwards, 24 N.W. 570; School Twp. v. State, 49 N.E. 961
J. M. Bartholomew, for respondent..
To the extent of defeating the legal operation of the instrument according to the purpose therein designated parol evidence of an additional or different consideration is not admissible in this case. The bold claim is made that a part of the consideration for a mortgagee, that on its face recites that it is given to secure four promissory notes, was the parol agreement of the mortgagee that it should stand as security for two of said notes only. In other words, the operation of the instrument was defeated pro tanto by the parol agreement and less than one-half the interest which it purported to pass did in fact pass by the instrument. This principle once established no written contract can be made that may not be defeated by parol testimony. Kirkland v. Menasha Wooden Ware Co., 68 Wis. 34; Chapin v. Dobson, 78 N.Y. 81; High v. Peck, 30 Cal. 280; Hendrick v. Crowley, 31 Cal. 472; McCrea v. Purmont, 16 Wend. 473; Palmer v. Roath, 49 N.W. 590. An agent for the collection of commercial paper has no implied powers. He cannot release the debt in whole or in part, nor can he compromise it in any manner. Melvin v. Insurance Co., 80 Ill. 465; McHaney v. Schenk, 88 Ill. 357; Carver v. Carver, 53 Ind. 241; Powell v. Henry, 27 Ala. 612; McCormick v. Machine Co., 72 Ind. 518; Whittington v. Ross, 8 Ill.App. 239; Fellows v. Northrup, 39 N.Y. 122; Graydon v. Patterson, 13 Ia. 258; Hurley v. Watson, 68 Mich. 531; Pitkin v. Harris, 69 Mich. 133; Rodgers v. Bass, 46 Tex. 506; Mechem Agy. § 376. The certificate of acknowledgement was in due form. Section 505 Comp. Laws, then in force, required that full faith and credit be given to such certificate. The following section made it a misdemeanor for a notary to make a certificate of acknowledgment of a party who did not appear before him. The presumption arising from the certificate had not been assailed when the record was offered in evidence. The objection was not broad enough to cover the point now raised. The bare oath of a party in contradiction of the facts certified is not sufficient to overthrow the acknowledgment. Johnson v. VanVelsor, 43 Mich. 219; Phillips v. Bishop, 35 Neb. 487; Barker v. Avery, 36 Neb. 599; Insurance Co. v. Nelson, 103 U.S. 544; Russell v. Baptist Theological Union, 73 Ill. 337; Barrett v. Dows, 104 Mo. 549; Bailey v. Landringham, 53 Ia. 722; Smith v. Alice, 52 Wis. 337.
This action was brought to foreclose a certain real estate mortgage executed to the National Bank of North Dakota by the defendants, who are husband and wife, on the 18th day of November, 1890, which said mortgage was duly assigned to the plaintiff in August, 1894. It was given to secure four promissory notes executed by the defendant Prior and one William Dew. Dew is not a party to this action. He was jointly interested in the purchase of the sheep for the purchase price of which these notes were given. The notes were originally given for the sum of $ 1,417.50, with 12 per cent interest. Two of the notes have been fully paid. The sum of $ 390.51 has been paid on the third note, and the fourth is wholly unpaid. The defendants have interposed an answer and a counterclaim also. Upon such complaint, answer, counterclaim, and reply the issues to be tried may be summarized as follows: In their answer the defendants allege that the sum of $ 161 has been paid, for which they have received no credit. They also allege in their answer that the mortgage in suit should be satisfied for the reason that, when the same was given, the agent of the National Bank of North Dakota, who sold the sheep to them, orally agreed that whenever the first two notes were paid the mortgage then given on the defendants' homestead would be released by said bank, and surrendered to defendants; that said bank, in January, 1893, agreed in writing with said defendants that, whenever they would pay $ 200 on the notes in suit, said bank would release and surrender said mortgage, which it has failed to do, although such payment has been made. In the counterclaim the defendants further allege that the plaintiff wrongfully converted to its own use 200 sheep, 1 cow, and 800 pounds of wool belonging to the defendants; that such conversion of said property was in consequence of an attempted foreclosure of a chattel mortgage on said property, which foreclosure was illegal and void. The District Court rendered a judgment in favor of the plaintiff for the sum of $ 436.12. From this judgment defendants have appealed, demanding a retrial of the entire case in this court. The District Court found the foreclosure of the chattel mortgage invalid, and allowed the defendants $ 380 as damages on such counterclaim. The plaintiff does not attack the finding declaring such foreclosure invalid in this court. Such finding will, therefore, be considered by us as having been made in accordance with the evidence.
We will first consider the claim made that, when these notes were given, the agent of the National Bank of North Dakota agreed with the defendant Prior that, when the first two notes were paid, the mortgage in suit would be satisfied, and delivered up to the defendants; that is, that the bank would rely on the chattel mortgage as security for the last two...
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