J. I. Case Threshing Machine Company v. Meyers

• Decision Date: 04 April 1907
• Docket Number: 14,715
• Citation: 111 N.W. 602,78 Neb. 685
• Parties: J. I. CASE THRESHING MACHINE COMPANY, APPELLANT, v. HARI MEYERS ET AL., APPELLEES
• Court: Nebraska Supreme Court

111 N.W. 602

78 Neb. 685

J. I. CASE THRESHING MACHINE COMPANY, APPELLANT, v. HARI MEYERS ET AL., APPELLEES

No. 14,715

Supreme Court of Nebraska

April 4, 1907

APPEAL from the district court for Red Willow county: ROBERT C. ORR JUDGE. Reversed.

REVERSED.

W. S Morlan, for appellant.

Starr & Reeder, contra.

OPINION

DUFFIE, C.

The appellant brought this action against Hari Meyers and F. H. Bonger upon two promissory notes given in part payment of a threshing machine outfit. The defendants filed separate answers, alleging, as a first defense, that there was misrepresentation on the part of the plaintiff on the sale of the machine; second, that a chattel mortgage securing these notes was foreclosed, the proceeds of which should have been applied in satisfaction thereof; third, damages for taking the outfit by the plaintiff. Meyers' answer contained a fourth defense--that he was intoxicated when he signed the notes in question. The jury found against the defendant Bonger, and in favor of the defendant Meyers. This is conclusive that all issues in the case were found in favor of the plaintiff, except that Meyers was not liable upon the notes by reason of his intoxication at the time of signing them. The record shows that the threshing machine outfit was sold to the defendant Bonger for the sum of $ 2,550, for which six notes were given. Meyers signed three of these notes, aggregating $ 1,200, the remaining notes being signed by Bonger alone, and all secured by chattel mortgage on the threshing outfit. On the failure of Bonger to pay the second and third notes when they matured, the plaintiff elected to treat the entire debt as due. It took possession of the machine under a writ of replevin, foreclosed its mortgage, and the proceeds, being insufficient to satisfy the entire debt, was applied as a partial payment on the notes signed by Bonger. No objection to this application of the proceeds of the foreclosure sale was made by either defendant.

It being settled by the verdict of the jury that there was no defense to the notes, except that of the intoxication of Meyers at the time of signing them, the only question we are called on to determine is the sufficiency of that defense under the evidence and the instruction of the court relating thereto, and its refusal to give instruction No. 1 asked by the plaintiff. This instruction is as follows: "The court instructs the jury that defendant Hari Meyers, among other things, claims he is not liable on the notes sued on in this action, for the reason that he was intoxicated at the time he signed the same. In order to release the defendant Hari Meyers on account of being drunk, you must first find that at the time said Hari Meyers signed the notes sued on he was so drunk as to be deprived of his reason and understanding. It is not sufficient that he was under the undue excitement of liquor, but such drunkenness, in order to release him in this case, must have been so excessive as to utterly deprive him of his reason and understanding; and, in order to avoid liability on said notes on account of such drunkenness, it was incumbent upon the said Hari Meyers to disclaim within a reasonable time his liability thereon, and to notify the plaintiff of his intention not to pay such notes." The rule of the instruction relating to the degree of drunkenness necessary to release Meyers is the same as announced in Johnson v Phifer, 6 Neb. 401; but, after serious consideration, we have concluded that the rule there approved should be modified, and our law made to conform to the more recent decision of the supreme court of the United States and of many of our sister states. An extended note to Wright v. Waller, 127 Ala. 557, 54 L. R. A. 440, 29 So. 57, shows that the old rule, first established in England, that drunkenness, in order to avoid a contract, must be of such character as to utterly deprive the party of his reason and understanding has, by the modern decisions, been greatly modified, and the more reasonable one adopted that, if a party is so far deprived of his reason and understanding as to render him incapable of comprehending the character and consequence of his act, it is sufficient. Hawkins v. Bone, 4 Fost. & Fin. (Eng.) 311; Bursinger v. Bank of Watertown, 67 Wis. 75; 58 Am. Rep. 848, 30 N.W. 290; Reynolds v. Waller, 1 Va. 164, 1 Wash. 164; Birdsong v. Birdsong, 39 Tenn. 289, 2 Head. 289; Barrett v. Buxton, 2 Aik. (Vt.) 167, 16 Am. Dec. 691; Harmon v. Johnston, 1 MacArth. (D.C.) 139. A contract is an agreement between competent parties, supported by a legal consideration, and there can be no contract in its true sense without a meeting of minds. The parties must have a distinct intention common to both, in order to constitute a contract or agreement. It is evident, therefore, that the minds of the contracting parties must meet, and, if one of them is so weak, unsound or diseased that the party is incapable of understanding the nature and quality of the act to be performed, or its consequences, he is incompetent to assent to the terms and conditions of the agreement, whether that state of his mind was produced by mental or physical disease or whether it results from intoxication. It seems to us that the true rule is contained in the instructions given by the trial court and approved by the supreme court of the United States in Johnson v. Harmon, 94 U.S. 371, 24 L.Ed. 271, to the effect that the defendant must be incapable of understanding the terms...