Kimpton v. Studebaker Bros. Co.

• Decision Date: 20 March 1908
• Parties: GEORGE KIMPTON, Respondent, v. STUDEBAKER BROS. CO., Appellant
• Court: Idaho Supreme Court

94 P. 1039

14 Idaho 552

GEORGE KIMPTON, Respondent, v. STUDEBAKER BROS. CO., Appellant

Supreme Court of Idaho

March 20, 1908

CONTRACT NOTE-SELLER RETAINING TITLE-OTHER PROMISES-NONNEGOTIABLE-TIME OF PAYMENT UNCERTAIN-VOLUNTARY PAYMENT-RECOVERY BACK.

1. A recital in a title-retaining note that the title to the property for which it is given shall remain in the payee and that he shall have the right to take possession of it whenever he may deem himself insecure, even before maturity of the note, renders such instrument non-negotiable under the provisions of secs. 1 and 5 of an act relating to negotiable instruments, approved March 10, 1903 (Sess. Laws 1903, p 380).

2. Where money is voluntarily paid in satisfaction of an unjust or illegal claim, with full knowledge of the facts and without any fraud, mistake, duress or extortion, it cannot be recovered back by the payor.

3. Held, that the instrument sued on in this action is non-negotiable, and was subject to all the legal defenses by the maker which might have been interposed by him against it in the hands of the original payee.

(Syllabus by the court.)

APPEAL from the District Court of Fifth Judicial District for Bannock County. Hon. Alfred Budge, Judge.

Action to recover for personal property delivered to the defendant. Judgment for plaintiff. Reversed.

Reversed and remanded, with instructions. Costs awarded to appellant.

A. B Redford, and Gray & Boyd, for Appellant.

Where a note contains any provisions other than for the unconditional payment of money, it is non-negotiable. (Southbend Iron Works v. Paddock, 37 Kan. 510, 15 P. 574.) And a maker can maintain any defense against an assignee that he might have maintained against an original party. (Smith v Marland, 59 Iowa 645, 13 N.W. 852; Story v. Lamb, 52 Mich. 525, 18 N.W. 249; First Nat. Bank v. Carson, 60 Mich. 432, 27 N.W. 589; Dickerson v. Higgins, 15 Okla. 588, 82 P. 649.)

Nixon was not an innocent purchaser under the evidence. He knew of the credit and that the price or value of the surrey and harness were deducted in arriving at the discount sum for which he bought the note.

Hawley, Puckett & Hawley, for Respondent, cite no authorities.

SULLIVAN, J. Ailshie, C. J., and Stewart, J., concur.

OPINION

SULLIVAN, J.

This action was brought to recover the value of a surrey and set of harness, which it is alleged that plaintiff delivered to the defendant to be sold by it, and that defendant agreed to sell the same for the plaintiff for $ 135 or return the same to the plaintiff in case no sale was made; that the defendant sold said property but failed and neglected to pay the plaintiff for the same. The answer denies that the defendant received said personal property as alleged in the complaint, and denies that it agreed to sell the same for plaintiff for $ 135 or for any sum whatever, or that it agreed to return the same to the plaintiff on demand; denies that the defendant did sell said personal property, and denies that it had failed and neglected to pay plaintiff for the same; and further answering the defendant avers that on the 5th day of February, 1904, the plaintiff made and delivered to the defendant its certain promissory note, which is set forth in the answer, which note was a renewal of a similar note dated about two years prior to the date of the copy of the note set forth in the answer. Said note is as follows:

"$ 277.00. Salt Lake City, Utah Feb. 5, 1904.

"On or before the 1st day of December, 1904, for value received in No. 3 harness No. 130 Std., 4 spring 2-3 gear truck wheels, 1 No. 759 surrey and set No. 129 Har. hereafter called 'said property,' bought of Studebaker Bros. Co. of Utah I or either of us promise to pay to the order of said company at its office in Salt Lake City, two hundred seventy-seven and no 100 dollars with 12 per cent interest per annum from date until after maturity, and if not paid after maturity the rate of interest shall thereafter be one per cent per month until paid, and reasonable attorney's fees if placed in the hands of an attorney for collection.

"The express condition of this transaction is that the title or ownership of 'said property' does not pass from said company until this note and interest shall have been paid in full, and the said company has full power to declare this note due and take possession of said property when it deems itself insecure, even before the maturity of this note; and it is further agreed by the makers hereof, that they will not sell or dispose of the said property except on the written order of said company. In case said company shall take possession of said property, it may at its pleasure sell the same at public or private sale without notice, and apply the proceeds on this note, or it may without sale indorse the true value of the 'said property' on this note and I or either of us, agree to pay on this note any balance due thereon after such endorsement, as damages and rental for 'said property,' as to this note we waive the right to exempt or claim as exempt, any property, real or personal we now own or may hereafter acquire, by virtue of any homestead or exemption law, now in force or that may hereafter be enacted. I agree to pay $ 20.00 on the 15th of each month until paid.

"Signed: GEORGE KIMPTON.

"JOHN HENRIE."

It is also averred in the answer that the property so purchased was for the use and benefit of the plaintiff Kimpton, and that John Henrie was only an accommodation indorser; that the plaintiff failed and neglected to pay said note or any part thereof, and on June 6, 1904, the defendant, deeming itself insecure and no payment having been made on said note, repossessed itself of the harness mentioned in said note, and on June 13, 1904, said defendant, deeming itself insecure and not having received any payments on said note, repossessed itself of the surrey mentioned in said note; that the true value of said surrey at the time it was repossessed by defendant was $ 75, and the true value of the harness was $ 13, and that thereafter on November 23, 1904, defendant demanded payment in full on said note, but plaintiff failed and neglected to pay any part thereof, and that said note was by the defendant declared due and payable according to its terms; that on or about November 23, 1904, the defendant sold said note by indorsing the same "without recourse" to one S. M. Nixon for $ 160.30, by and with the consent and knowledge of the plaintiff.

Upon the issues thus made, the cause was tried by the court without a jury, and in its findings of fact the court found execution of said note as alleged, and further found that on April 1, 1904, the plaintiff voluntarily delivered to the defendant said surrey and harness, and that the defendant then and there agreed to sell the same for the plaintiff for the sum of $ 135, said sum to be indorsed upon said promissory note; that on or about June 1, 1904, the defendant sold said surrey and harness and indorsed upon said note the sum of $ 13 and neglected to indorse thereon the balance of $ 122; that on November 16, 1904, and before the maturity of said obligation, the defendant sold the same to said Nixon; that on August 24, 1905, the plaintiff paid to said Nixon the full amount of said obligation, including interest thereon at the rate of twelve per cent per annum, aggregating a sum of $ 341.06.

As a conclusion of law from the facts found, the court found that the plaintiff was entitled to judgment as prayed for in his complaint, and judgment was entered accordingly. A motion for a new trial was denied and this appeal is from said order and judgment.

The main questions involved in this case are the negotiability of said title-retaining contract or note, and whether the respondent was justified under the facts of this case in paying the full amount that appeared to be due on said contract upon its face to said Nixon, a purchaser thereof, and whether the evidence is sufficient to sustain the findings of fact. The following facts appear from the record: That in 1902, the respondent entered into a contract like the one above set forth, for the purchase of said personal property. The former contract not having been complied with, the one above set forth was taken in its place as a renewal thereof. About two years after said transaction the respondent not having been paid anything on said contract, he delivered to the agent of the appellant said surrey and set of double harness, the value of which was to be applied on said contract. There is a conflict in the evidence as to the terms on which this property was returned to the appellant, but, under the contract the property belonged to the appellant, and under its provisions it might repossess itself of said property whenever it deemed itself insecure. But the effect of all the evidence clearly is that the value of said property was to have been indorsed on said contract. According to the evidence of the appellant, the value was agreed upon as follows: $ 13 for the set of double harness; $ 75 for the surrey, making a total of $ 88, while the evidence of the respondent is to the effect that the appellant was to sell said property for $ 135 and give him credit for that amount on said note. In our view of the case, however, the difference as to the value of the property will make no difference in the...