Johnson v. Benham
| Decision Date | 17 April 1925 |
| Docket Number | 24,592 |
| Citation | 203 N.W. 444,163 Minn. 31 |
| Parties | ORVILLE E. JOHNSON v. ROY H. BENHAM |
| Court | Minnesota Supreme Court |
Action in the district court for Hennepin county to recover on promissory notes. From an order, Leary, J., sustaining plaintiff's demurrer to the amended answer, defendant appealed. Affirmed.
Answer in action on promissory notes demurrable.
1. An answer is demurrable which admits the execution of the promissory notes sued on and nonpayment, and attempts to state a contemporaneous parol agreement making them due and payable only when a sufficient net profit was produced from the sale of certain lands, but alleges neither mutual mistake in not incorporating the parol agreement into the notes, nor fraud practised by plaintiff, nor inequitable conduct inducing defendant to sign the notes in reliance upon the parol agreement.
When promissory note cannot be reformed by adding parol agreement which varies its terms.
2. Where a plain promissory note is executed by one who fully understands its terms and there is neither mutual mistake nor mistake by the maker and deception by the payee, nor fraud, there can be no reformation by the incorporation of a parol agreement which varies or contradicts the terms of the note.
1. See Reformation of Instruments, 34 Cyc. p. 974.
2. See Reformation of Instruments, 34 Cyc. pp. 907, 915, 920.
George T. Simpson, for appellant.
Charles F. Keyes, for respondent.
The suit is on two promissory notes. A demurrer to the answer was sustained and defendant appeals.
The answer admitted the signing and delivery of the notes, and that no part had been paid, although payment had been demanded. Then, by way of defense, it is alleged that the notes were signed and left with plaintiff in connection with the liquidation of a business transaction in which plaintiff and defendant should endeavor to sell certain lands at a profit, deducting carrying charges and selling expenses, and in event there were cash profits from the transaction then the notes should become due and payable at their due date therefrom, but, if such profits did not exist at the due date of the notes, then payment would not be demanded by plaintiff until profits did exist, that if it should be ultimately determined that defendant was indebted to plaintiff in any sum whatever defendant's entire liability should not in any event exceed the amount "stated in certain notes then signed by the defendant" of which are the notes in suit. It is alleged that the parties had been engaged in the business enterprise and otherwise for some time prior to the signing of the notes and their relations had always been of a cordial and confidential nature, that defendant had had special trust and confidence in plaintiff's promise and agreement, and trusting and relying thereon defendant neglected and failed to cause to be placed in said notes the agreement above stated. It is also averred that defendant in good faith attempted to sell the land at a profit and has continued to so do, but at the date of answering there are no profits, and defendant believes there will be no profits for a long time to come. The prayer is for a reformation of the notes to conform to the agreement.
Passing the question whether the pleader has set out an agreement of sufficient definiteness and certainty to be incorporated in the instruments asked to be reformed, we are confronted with the proposition that there are no allegations that defendant did not know what he was signing when the notes were executed, or that the parties labored under a mutual mistake or that plaintiff practised any fraud or deception on defendant, or that plaintiff in any way took advantage of the supposed confidence and trust defendant reposed in him. There are no allegations...
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