Hutchison v. Boney

• Decision Date: 04 March 1963
• Docket Number: No. 6907,6907
• Citation: 382 P.2d 525,72 N.M. 194,1963 NMSC 40
• Parties: J. B. HUTCHISON, d/b/a Hutchison Lumber Company, Plaintiff-Appellee, v. Stewart BONEY, Defendant-Appellant.
• Court: New Mexico Supreme Court

Page 525

382 P.2d 525

72 N.M. 194

J. B. HUTCHISON, d/b/a Hutchison Lumber Company, Plaintiff-Appellee, v. Stewart BONEY, Defendant-Appellant.

No. 6907.

Supreme Court of New Mexico.

March 4, 1963.

Rehearing Denied June 26, 1963.

Threet & Threet, Albuquerque, for appellant.

Ernest A. Polansky, D. A. Grammer, Jr., Wilson, Whitehouse & Zucht, Albuquerque, for appellee.

CHAVEZ, Justice.

This is an appeal from a judgment rendered in favor of plaintiff-appellee on promissory notes executed by defendant-appellant.

The two notes in question were executed on July 8, 1958, by appellant Stewart Boney, as renewal notes for a note dated August 4, 1953, and due and payable August 4, 1954. The 1953 note was executed by appellant individually and as president of Boney Lumber Co., Inc., hereinafter referred to as the 'corporation' and was in the amount of $8,950.55. Each of the 1958 notes was in the amount of $4,500 with interest from date until paid at the rate of 5% per annum. One of the 1958 notes was payable monthly at the rate of $100 plus interest, with the first installment due and payable January 1, 1959, and subsequent payments due and payable on the first day of each and every month thereafter until the full amount was paid. The other 1958 note payable at the rate of $900 per annum with the first installment, in the amount of $900, due and payable on October 1, 1959, and a like sum due and payable on the first day of October of each and every year following until the full amount was paid. Interest on the latter note was payable monthly. Four payments totaling $700 were made on the first 1958 note, the last one being made on October 1, 1959. No other payment on any of the three notes was made.

On March 1, 1960, appellee, the payee on all three notes, filed suit against appellant, asserting the right of acceleration for nonpayment. Appellant answered admitting execution of the 1958 notes and setting up the defenses of lack of consideration and that appellee was not a holder for value. The answer also admitted that the 1958 notes served to renew the 1953 note which had been given upon demand for payment of a debt on open account owed by the corporation to appellee.

Trial was to the court without a jury. Judgment was rendered for appellee for $10,208.28 and costs. From this judgment appellant appeals, basing his plea for reversal on these points:

'I. The appellee failed to discharge the burden of proof resting upon it to show by a fair preponderance of the evidence, upon the whole case, that there was a consideration for the notes in suit.

'II. The judgment of the trial court is not supported by substantial evidence.

'III. The trial court's findings of fact numbers 9 and 10, and the trial court's conclusion of law number 1 are not supported by any evidence adduced by the appellee in the trial of this case.'

There are two rules prevailing in the United States as to the burden of proof of consideration for a promissory note. Both rules are to the effect that upon proof of execution of a note consideration is presumed to exist. The division of the cases occurs in a situation where the party upon whom liability for the note is being sought to be placed attempts to rebut the presumption. On viewpoint is that when evidence is offered which shows or tends to show lack of consideration, it is then incumbent upon the holder to show by a fair preponderance of the evidence that there was consideration. The other view is that the burden of proving lack of consideration rests solely upon the charged party. The New Mexico rule is stated in Citizens' National Bank of Roswell v. Bean, 26 N.M. 203, 206, 190 P. 1018, as being the former.

Appellant argues that because a party calling an adverse witness is not bound by the testimony thereby adduced, that this evidence may not be considered on behalf of the other party. The cases relied upon by appellant fail to support his position. In Moran v. Pittsburgh-Des Moines Steel Co., (3 C.C.A. 1950), 183 F.2d 467, error was claimed because the trial court instructed the jury that, in the absence of direct proof or circumstances rebutting such testimony, it was to take as conclusively true testimony given under a statute similar to Sec. 21-1-1(43)(b), N.M.S.A., 1953 Comp. The circuit court held that the instruction was erroneous because it is inherently anomalous to say that a party is bound by the testimony of a witness whom he is free to contradict and impeach. However, that case did not hold that testimony elicited from an adverse witness is not to be considered as evidence if it is in conflict with other evidence presented by the party calling such adverse witness.

This court, in Carney v. McGinnis, 63 N.M. 439, 321 P.2d 626, stated that a party calling an adverse witness is not bound by the testimony resulting therefrom and, in the event such testimony is in conflict with other evidence adduced by the calling party, the court need not weigh such conflicting evidence. This ruling does not have general application as it was given in a case involving a motion by the defendant for a directed verdict made at the close of plaintiff's case. In such a situation, it has long been the rule that all the evidence favorable to plaintiff's claim must be taken and considered as true, and all evidence adverse to such claim will be disregarded. Olivas v. Garcia, 64 N.M. 419, 329 P.2d 435; Telman v. Galles, 41 N.M. 56, 63 P.2d 1049. That the testimony of an adverse witness was involved was not material in Carney v. McGinnis, supra, the only question being whether the court should weigh conflicting evidence when ruling upon a motion for a directed verdict immediately following the presentation of plaintiff's case.

When other jurisdictions have been confronted with this question, they have resolved it by saying that while a party is not bound by the testimony of an adverse witness called under Rule 43(b), Rules of Civil Procedure, this means only that he was free to cross-examine, contradict and impeach these witnesses, and that even if the testimony was not contradicted, the trial court was not required to accept it as true, citing Moran v. Pittsburgh-Des Moines Steel Co., supra. They hold that testimony of an adverse witness is evidence in the case, to be weighed with all other evidence and given such probative value as the fact finder deems appropriate. Nuelsen v. Sorensen, (9 C.C.A., 1961), 293 F.2d 454; Chichester v. Golden, (D.C.S.D.Cal.1962), 204 F.Supp. 634; Daniels v. City and County of San Francisco, 40 Cal.2d 614, 255 P.2d 785; Krafft v. Hirt, 260 Minn. 296, 110 N.W.2d 14. This view is in accord with our construction of the statutory language employed in Sec. 21-1-1(43)(b), supra.

Appellant's point II asserts that the judgment is not supported by substantial evidence. Other than the attack on findings of fact numbers 9 and 10, and conclusion of law number 1, in appellant's point III, there is no direct attach on the findings of fact and conclusions of law as is necessary under Supreme Court Rule 15(6), (Sec. 21-2-1(15)(6), N.M.S.A., 1953 Comp.). We have often refused to review a point or to search the record when findings of fact were not set out and accompanied by the substance of all evidence adduced thereon. Bogle v. Potter, 68 N.M. 239, 360 P.2d 650. Those findings of fact not directly attacked become the facts in the reviewing court. Latta v. Harvey, 67 N.M. 72, 352 P.2d 649. Therefore, we restrict our inquiry into the substantiality of the adduced evidence to that pertinent to findings of fact numbers 9 and 10 and conclusion of law number 1, as raised by appellant's point III.

Having concluded that appellee's testimony as an adverse witness is to be weighed by the trier of facts in the same manner as any other evidence, it is apparent that there is substantial evidence to...