J.B. Colt Co. v. Gregor

• Decision Date: 21 December 1928
• Docket Number: 4371
• Citation: 11 S.W.2d 1098
• Parties: J. B. COLT CO. v. GREGOR.
• Court: Missouri Court of Appeals

11 S.W.2d 1098

J. B. COLT CO. v. GREGOR.

No. 4371

Court of Appeals of Missouri, Springfield

December 21, 1928

Appeal from Circuit Court, Douglas County; Fred Stewart, Judge.

Action by the J. B. Colt Company against Martin Gregor. Judgment for defendant, and plaintiff appeals. Affirmed.

Cox P. J., dissenting.

J. S Clarke, of Ava, for appellant.

C. H Jackson, of Mountain Grove, and Nat. W. Benton, of Springfield, for respondent.

OPINION

BRADLEY, J.

This is an action upon a promissory note. Verdict and judgment went for defendant, and plaintiff appealed.

The note sued on is in the usual form and is payable to plaintiff; hence there is no question of a holder in due course involved. The note was executed at Keenesburg, Colo., July 11, 1921. The principal of the note is $323.45, due one year after date with interest from maturity. The execution of the note is admitted. The defense rests upon a Colorado statute which provides that every contract or negotiable instrument is incomplete until delivery of the instrument with intent to give effect thereto. The answer sets up that the note in suit is a Colorado contract and was delivered conditionally and that the condition has not been complied with and hence the note never became binding. The statute of Colorado and the decision of the Supreme Court in that state construing it were pleaded in the answer.

The facts relied upon by defendant as a defense under the Colorado statute were testified to by defendant and are, substantially, as follows: An agent of plaintiff took from defendant an order for a carbide generator and fixtures. The generator was designed to furnish light for defendant’s residence in Colorado where he then resided, and also furnish heat for cooking purposes. The order was in writing and signed by defendant. This order provided for the execution of the note in suit. Defendant testified over objection that when he signed the order and the note, the agent of plaintiff agreed with him orally that the generator would be put in on one year’s trial and if it did not work all right he would take it back and return the note to the defendant; that defendant gave the note with that understanding; that the plant would not do what the agent claimed for it, and after trying it for more than 20 days he wrote the plaintiff to come and take the plant away, but that plaintiff did not do so.

The statute of Colorado and the decision of the Supreme Court of that state, which defendant contends made this oral testimony admissible and also warranted the defense of a conditional delivery of the note and failure of the condition, were as follows:

Section 16 of the Negotiable Instrument Law of Colorado, being section 4479 of the Revised Statutes of that state (1908), contains the following provisions: "Every contract on a negotiable instrument is incomplete and revocable until delivery of the instrument for the purpose of giving effect thereto. As between immediate parties, and as regards a remote party other than a holder in due course, the delivery, in order to be effectual, must be made either by or under the authority of the party making, drawing, accepting or indorsing, as the case may be; and in such case the delivery may be shown to have been conditional, or for a special purpose only, and not for the purpose of transferring the property in the instrument." This is followed by provisions protecting a holder in due course.

The Supreme Court of that state in Sayre v. Leonard, 57 Colo. 116, 140 P. 196, construed the above statute in such a way as to make defendant’s defense in this case a good defense and also that the fact of a conditional delivery could be shown by parol testimony. The statute and the decision of the Supreme Court were both pleaded and proven at the trial; hence if applicable to this case the defense pleaded was a good one and the judgment should be affirmed.

Whether the Colorado statute applies in this case depends on whether or not this note sued on is to be governed by the law of Colorado. Appellant contends that the note is a New York contract and that the Colorado statute does not apply, while respondent contends that it is a Colorado contract and the statute does apply.

The order for the generator signed by defendant, omitting formal parts and portions immaterial in this case, contained the following provisions:

"J. B. Colt Company, 30 East 42nd Street, New York, June 14, 1921. Please ship the following generators and appliances f. o. b. factory or warehouse to Martin Gregor, Keenesburg, Colorado (here follows a description of the generator and appliances ordered and the price) Total, $323.45.

In consideration of acceptance by the company of this order, the undersigned purchaser agrees to pay to the company three hundred twenty three and 45/100 dollars within one year from date of acceptance of this order. The purchaser agrees to make, execute and deliver to the company forthwith upon notice of due acceptance his or their promissory note in form prescribed by the company for the amount aforesaid and payable one year from date of acceptance of this order without interest.

The order shall become a contract between the purchaser and the company upon acceptance thereof in the space below by an officer or credit manager of said company at its office in New York, N.Y. [Signed] Martin Gregor, Purchaser. Keenesburg, Colorado. R. F. D. 1.

Accepted at New York, N.Y. July 11, 1921. J. B. Colt Company by [Signed] H. C. Myers, Credit Manager."

The note in suit, which was given as provided in the contract, is in form as follows:

"$323.45. Keenesburg, Colo., July 11, 1921. One year after date I promise to pay to the order of J. B. Colt Company, Three Hundred Twenty-three and Forty-five One Hundredths Dollars, value...