First National Bank v. Spear

• Decision Date: 02 September 1899
• Citation: 12 S.D. 108,80 N.W. 166
• Parties: FIRST NATIONAL BANK OF MADISON, Plaintiff and respondent, v. SPEAR et al., Defendant and appellant.
• Court: South Dakota Supreme Court

12 S.D. 108

80 N.W. 166

FIRST NATIONAL BANK OF MADISON, Plaintiff and respondent,

v.

SPEAR et al., Defendant and appellant. South Dakota Supreme Court Appeal from Circuit Court, Lake County, SD Hon. Joseph W. Jones, Judge. Reversed G. R. Krause Attorneys for appellant. D. D. Holdridge & Son Attorneys for respondent. Opinion filed September 2, 1899

CORSON, P. J.

This is an action upon five promissory notes, each drawn for the sum of $25, and payable to the Lake Madison Chautauqua Association of South Dakota. The plaintiff was the assignee of these notes, and they, with one other, were given in consideration of one share of the stock of the association and a 99-year lease to a lot of ground belonging to the association. The complaint was in the usual form, and to this the defendant interposed an answer as follows:

“That on or about July 18, 1893, this defendant and the Lake Madison Chautauqua Association of South Dakota, co-defendant herein, entered into an agreement, by the terms of which said association sold to this defendant, and was then and there to deliver to this defendant, a certificate for one share of its capital stock, and was also to make, execute, and deliver to this defendant a 99-year lease of lot No. 4, of block No. 10, on the assembly grounds of said association; and for which, under the terms of the said agreement, this defendant was to and did then and there make and deliver to said association his five promissory notes in writing, for the sum of $25 each, which said notes were each dated July 18, 1893, and due and payable thereafter as follows: One October 1, 1893; one on July 1, 1894; one on January 1, 1895; one on July 1, 1895; and the other on January 1, 1896; and were all made payable to the Lake Madison Chautauqua Association of South Dakota. … That said Lake Madison Chautauqua Association of South Dakota has not delivered said certificate of stock, nor has it made, executed and delivered said lease for lot No. 4, block No. 10, of the assembly grounds of the said association, to this defendant, according to this agreement, and by reason of said nonexecution and nondelivery, the consideration for said notes has wholly failed; and that there was no other consideration for the said notes. …”

To the answer of the defendant Spear the plaintiff interposed a reply, in effect admitting the allegations of the answer, and alleged that, in accordance with said agreement, the association issued said certificate of stock to said Spear, and properly entered the said stock upon the books of the said association; and that said certificate was issued on July 18, 1893, and that said certificate has always been subject to the demand of the said Spear, and is now subject to his demand. but that he has never called for the same and never demanded the same; that, ever since the said notes were given. the said Spear has been entitled to and has received the benefits of a shareholder in said association, and is now the owner of said share of capital stock, and a member of said association; and plaintiff especially denies that said Gustavus Spear was to receive from said Chautauqua Association a deed for 99 years for lot No. 4, block No. 10, on the assembly grounds of the said association, at the time of the execution and delivery of the said notes. Plaintiff further alleges that said Lake Madison Chautauqua Association of South Dakota has performed all the covenants, conditions, and agreements of said contract with the defendant Spear. Judgment was entered for the plaintiff for the sum of $192.95, being the total amount due on the five notes sued on. From this judgment the defendant Spear has appealed to this court.

Before proceeding to discuss the merits of the case, it becomes necessary to dispose of a motion made by the appellant to strike out the respondent’s additional abstract, made upon the grounds (1) that the matters and things therein set forth are not in this case and are not authenticated; and (2) because the matters and things therein set forth are not contained in the bill of exceptions, and are not a part of the record herein.

We are of the opinion the motion must be denied. The additional abstract purports to set out certain proceedings had on the trial on the 23rd of May, 1898, to amend the complaint and judgment. The record of these proceedings consisted of a notice of motion to amend plaintiff’s complaint by striking out the last cause of action—being upon the last note—reducing the amount of the judgment, the affidavit upon which the motion was based, and an order of the court directing that the complaint and judgment be amended as prayed for. This record was duly certified to this court pursuant to its order. In the view, however, we take of the case, these amendments will not affect the decision of this court.

On the trial the plaintiff introduced in evidence the notes sued on, proved its incorporation, and rested. Thereupon the defendant Spear moved the court for the direction of a verdict against the plaintiff, for the reason that the plaintiff had failed to prove a cause of action against the defendant under the pleadings; the notes being nonnegotiable, and plaintiff not having shown that the payee had performed conditions precedent to recover under its contract shown by the pleadings. The motion was denied, and the ruling of the court in so denying the motion is assigned as error. We are of the opinion that the ruling of the court was correct, as the production of the notes in evidence made out a prima facie case for the plaintiff. The contract alleged on the part of the defendant Spear, and in effect admitted in the reply, was a matter of defense.

Defendant Spear thereupon introduced in evidence a memorandum receipt signed by the Lake Madison Chautauqua Association, by J. L. Jones, its agent, by which the association acknowledged the receipt of six promissory notes, dated July 18, 1893, for $25 each, and giving the several dates of payment, in full payment of one share of stock in the Lake Madison Chautauqua Association of South Dakota, and in which was the following stipulation:

“It is hereby agreed by and between the Lake Madison Chautauqua Association of South Dakota and the maker of the above notes that, upon the full payment of the above notes, he shall receive a ninety-nine year lease of lot No. 4, block No. 10, on the assembly grounds of the said association, and that prior to January 1, 1896, he shall have the free use and control of said lot, subject to the rules and regulations of said association.”

It appeared from the evidence on the part of the defendant Spear that he had never received the certificate of stock, and had never received any lease for the lot mentioned, and he admitted that he had never made any demand for either. It was shown on the part of the plaintiff that the said Spear had been entered as a stockholder on the books of the association, and that the certificate of stock had been made out for him, but by some inadvertence had never been sent to him. Plaintiff further proved that one of the six notes executed by...