Huttig v. Brennan
| Decision Date | 28 July 1931 |
| Docket Number | No. 29611.,29611. |
| Citation | 41 S.W.2d 1054 |
| Parties | H.W. HUTTIG, Appellant, v. JAMES M. BRENNAN. |
| Court | Missouri Supreme Court |
Appeal from Circuit Court of City of St. Louis. — Hon. George E. Mix, Judge.
AFFIRMED.
Hensley, Allen & Marsalck and Allen, Moser & Marsalek for appellant.
(1) Under the pleadings and undisputed facts in evidence plaintiff was entitled to judgment on the notes in suit as a matter of law. (a) The burden of proving, by the preponderance of the evidence, that the notes in suit were obtained by fraud, and that plaintiff had actual knowledge thereof when he took such notes, or knowledge of such facts that his action in taking the notes amounted to bad faith, was upon the defendant. Such burden was placed upon defendant by the pleadings and rested upon him throughout the trial. Downs v. Horton, 287 Mo. 414, 431; Marquand v. Branum, 286 S.W. 444: Morgan v. Mulcahey, 298 S.W. 245. (b) There was a total lack of any evidence tending to show fraud of any character on the part of Quinby, the payee in the notes, and the trial court, in its findings, found no fraud. (c) As to the attempted defense of lack of consideration, the burden was upon the defendant to show both want of consideration for the notes and that plaintiff had actual knowledge thereof. Pattonsburg Savings Bank v. Kock, 255 S.W. 583; Bank of Polk v. Wood, 189 Mo. App. 62; Estes v. Kincaid, 218 Mo. App. 118; Guaranty Bank & Trust Co. v. Bank, 294 S.W. 457; Levy v. Artophone Co., 249 S.W. 158. (d) Want of consideration does not render the title to a negotiable instrument defective within the meaning of Secs. 2683, 2687, R.S. 1929 (Secs. 841, 845, R.S. 1919), so as to cast any burden on the holder to show he is the holder in due course. Downs v. Horton, 287 Mo. 431; Bank v. Wood, 189 Mo. App. 62. (e) There was a total lack of any evidence tending to establish the defense of want of consideration; on the contrary, the evidence conclusively showed that there was a perfectly good and valid consideration for the notes. Whether there was such valid consideration for the notes does not depend, in the slightest, upon how far Quinby actually performed his contract with Brennan where a promise affords the consideration for a contract, it is the promise, and not the performance thereof, that constitutes the consideration. McKee v. Cochran, 272 S.W. 1092; Levy v. Artophone Co., 249 S.W. 160; Citizens Bank v. Kriegshauser, 211 Mo. App. 39. (f) To constitute notice to plaintiff of an infirmity, if any, in the notes sued on, or any defect in the title of the payee (Quinby), it was necessary to show that plaintiff had actual knowledge of such infirmity or defect, or knowledge of such facts that his action in taking said notes amounted to bad faith. Nothing short of actual knowledge of such infirmity or defect, if any, or actual knowledge of such facts as would make his action in taking the notes amount to bad faith on his part, can defeat plaintiff's right to recover. Mere suspicion, or even facts that would put a reasonably prudent man on inquiry, or negligence, is not sufficient to charge plaintiff with notice of such infirmity or defect, if any. Sec. 2684, R.S. 1929 (Sec. 842, R.S. 1919); Morgan v. Mulcahey (Mo. App.), 298 S.W. 245; Bank of Hale v. Linneman (Mo. App.), 235 S.W. 181; Marquand v. Branum, 286 S.W. 443; Peoples Bank of Holcomb v. Bullock, 216 Mo. App. 492; Commerce Trust Co. v. State Bank, 300 S.W. 526. (g) Failure of consideration is no defense to a negotiable instrument in the hands of a bona-fide holder for value before maturity. Mala-fides alone can make such defense available. There was no failure of consideration at the time of the transfer of the notes by Quinby to plaintiff; and if there may be said to be any evidence of a subsequent breach of the executory agreements between Quinby and Brennan, this could not cast on plaintiff the burden of proving himself a holder in due course. Levy v. Artophone Co., 249 S.W. 160. (h) The fact that the lots sold to Brennan were not listed in exhibits attached to the original contract between him and Quinby affords no grounds for the contention that the notes were without consideration. Since, under the terms of the contract, Quinby, the payee, was legally obligated to deliver to defendant stock of the Stockton Oil Company of the par value of $50,000, this alone furnished adequate consideration for the notes. In order to be sufficient in law to support a contract, the consideration need not be adequate in point of value. Fitzgerald v. Fleming, 58 Mo. App. 185; Citizens Bank of Edina v. Kriegshauser, 211 Mo. App. 39. And if the sale of the Fort Stockton lots and the oil leases had constituted the sole consideration for the notes, defendant had no defense to the notes on the ground that his contract with Quinby was not enforcible as to these lots and leases because of the Statute of Frauds, in the absence of evidence that Quinby had taken advantage of the statute and refused to be bound by the contract, of which there was not a scintilla of evidence. Kratz v. Stocke, 42 Mo. 351; Woodson v. Vinegar Co., 272 S.W. 1084; McGowen v. West, 7 Mo. 569; Rauck v. Wickwire, 255 Mo. 58; Jose v. Aufderheide, 222 Mo. App. 531, 293 S.W. 479; St. Louis etc. Ry. Co. v. Clark, 121 Mo. App. 186; 27 C.J. 316, sec. 401; 25 R.C.L. 694, sec. 335. (i) There was a total lack of any evidence to show that plaintiff had knowledge of the fact, if it be a fact, that the exhibits referred to in the original contract had not been attached to either signed copy of the contract. On the contrary, the evidence shows that plaintiff could not have had such actual knowledge, since the defendant's own testimony is that he took his copy of the contract to his place of business and put it away, where it remained until he later gave it to his counsel when litigation arose; and Judge Metcalf testified that he took Quinby's executed copy of the contract to Kansas City and kept it there, where it remained at the time of the trial. (j) Since plaintiff's evidence discloses all of the facts and circumstances touching his acquisition of the notes in suit, shows all the elements constituting him a holder in due course, discloses no damaging or impeaching facts, and stands uncontradicted, he is entitled to recovery as a matter of law. Downs v. Horton, 287 Mo. 431; Bank of Hale v. Linneman, 235 S.W. 181; Morgan v. Mulcahey, 298 S.W. 245; Depres, Bridges & Noel v. Galloway (Mo. App.), 224 S.W. 1000; Kincaid v. Estes, 218 Mo. App. 121; Newton County Bank v. Cole (Mo. App.), 282 S.W. 467; Ensign v. Crandall, 207 Mo. App. 211. (2) The court erred in its conclusion of law that if the Quinby-Brennan contracts contained no description of the lots to be conveyed to Brennan and nothing by which they could be identified, and if no such lots were in fact conveyed to Brennan, then said contracts were void as between the parties and constituted no consideration for the notes in suit. Authorities under Point 1 (h), supra. (3) The court erred in its conclusion of law that if plaintiff, when he acquired said notes, knew the contents of the contracts between Brennan and Quinby pursuant to which said notes were given, and knew that said contracts contained nothing to identify the lots which Quinby undertook to convey to Brennan, and knew that said notes were given pursuant to said contracts, then plaintiff acquired no greater rights under said notes than Quinby, the payee, would have had. Authorities cited under Point 1 (f) and Point 1 (h), supra. (4) The trial court erred in admitting in evidence the letters written by plaintiff to defendant's counsel, since these letters showed upon their face, and plaintiff's testimony also showed, that they were written in connection with an effort to compromise or settle plaintiff's claim upon the very notes in suit. Jacks v. Link, 291 Mo. 282.
Charles A. Houts for respondents.
(1) There was no consideration for the notes sued on, because: (a) The so-called contract between defendant and Quinby, of October 20, 1924, though signed, was incomplete, and in effect no contract at all, for lack of the exhibits (three in number) called for therein and stated to be a part thereof: Greene v. Cole, 103 Mo. 70; Mason v. Griffith, 281 Ill. 246; Page on Contracts, sec. 2153; Atkins v. School District, 77 Ind. 447; Pepper v. Harris, 73 N.C. 365; L. & C. Railroad v. Boykin, 76 Ala. 560; Bluemner v. Garon, 120 App. Div. (N.Y.) 29; 13 C.J. 308. (b) The so-called contract, in the form it was left by the signers, was so indefinite as to be unenforcible. Goldstine v. Tolman, 157 Wis. 141; Hannon v. Scanlon, 158 Wis. 357; Rollin v. Pickett, 2 Hill (N.Y.) 552; Gigos v. Cochran, 54 Ind. 593; Vickers v. Henry, 110 N.C. 371; Brooks v. Halane, 116 Ill. App. 383; Scanlon v. Oliver, 42 Minn. 538; Nippolt v. Kemmon, 39 Minn. 372; Cooley v. Lobdell, 153 N.Y. 596; Pearce v. Watts, L.R., 20 Eq. 492; Sherman v. Kitzmiller, 17 Serg. & R. (Pa.) 45; Head v. Baldwin, 83 Ala. 132. (c) The so-called contract contained nothing by which the lots could be identified, and so was unenforcible under the Statute of Frauds of Missouri and of Texas. Johnson v. Fecht, 185 Mo. 345; Nelson v. Brodhack, 44 Mo. 596; Fox v. Courtney, 111 Mo. 147. (d) It was not only unenforcible as against Quinby but also unenforcible against Brennan. Ringer v. Holtzclaw, 112 Mo. 519; Shy v. Lewis, 321 Mo. 688; Fox v. Courtney, 111 Mo. 147. (e) The description of the entire body of lots, out of which one thousand thereof was to be sold, was so indefinite that not even a right of selection by Brennan could have been exercised. (f) The fact that the so-called contract dealt with personal property as well as real estate did not take it out of the operation of the Statute of Frauds. If part of it was within the statute, all of it was, Beckman v. Mepham, 97 Mo. App. 161; Hamburger v. Hirsch, 212 S.W. 51. (2) Huttig having seen both the original instrument of October 20, 1924, and the...
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