Leach v. Urschel

• Decision Date: 06 January 1923
• Docket Number: 24,262
• Parties: LOUIS B. LEACH, Appellee, v. D. F. URSCHEL, Appellant
• Court: Kansas Supreme Court

212 P. 111

112 Kan. 629

LOUIS B. LEACH, Appellee, v. D. F. URSCHEL, Appellant

No. 24,262

Supreme Court of Kansas

January 6, 1923

Decided January, 1923.

Appeal from Marion district court; CASSIUS M. CLARK, judge.

Judgment affirmed.

SYLLABUS

SYLLABUS BY THE COURT.

1. PROMISSORY NOTE--Negotiability--Time of Payment. A promissory note plainly reciting the time when it is to fall due is not rendered uncertain as to time of payment and consequently nonnegotiable because of a stipulation that it is to bear interest at "eight per cent after due until paid."

2. SAME--Waiver of Presentment for Payment. Recitals of waiver of "presentment for payment, demand, protest, or nonpayment" in a promissory note neither affect nor impair its negotiability.

3. SAME--Stipulation for Attorney's Fees Not Interest. A stipulation in a promissory note that if the note is not paid at maturity it may be placed in the hands of an attorney for collection and that 10 per cent of the amount due may be added and will be paid by the maker, while void under our statute (Gen. Stat. 1915, § 6475), does not destroy the negotiable character of the instrument.

4. SAME--Indorsement Gave No Notice of Infirmities in Note. On the back of a promissory note above the defendant's indorsement were the words: "There are no conditions offsetting this note, and any bank, banker, corporation or individual has my permission to purchase it." Held, that such recital did not affect or limit the defendant's liability as indorser; and held, also, that it gave no warning of any infirmity in the instrument.

5. SAME--Note Payable to the Order of the Maker. When a promissory note payable "to the order of myself" is duly indorsed by the maker and set afloat in the channels of commerce it is subject to the law of negotiable instruments.

6. SAME--Prima Facie Right to Recover--Demurrer Properly Overruled. In an action on a negotiable promissory note, when a plaintiff has shown his ownership and acquisition of it before maturity, his prima facie right to recover on it is established, and a demurrer to plaintiff's evidence is properly overruled.

7. SAME--Issues Raised by General Denial--Indorsement of Note Not Put in Issue. A verified answer to a petition in an action on a negotiable promissory note contained a general denial, a special defense of fraud, and admission that defendant had executed and delivered the note in reliance on fraudulent misrepresentations, and alleged that "there was no legal indorsement on said note by defendant to complete the contract of note, indorsement or delivery thereof, and no legal indorsement that would carry note payable to order free from equities or defenses." Held that such verified answer did not put the fact of indorsement in issue, nor raise an issue as to the genuineness of the indorser's signature.

8. SAME--Excluded Evidence--Not Error. Excluded documentary evidence and deposition examined, and held, that, conceding their competency, they were insufficient in themselves to establish the defense pleaded and relied on to defeat the plaintiff's action.

9. SAME. Error cannot be based upon the exclusion of testimony unless at some stage of the proceedings the testimony is produced in the trial court. A mere statement by counsel of what he proposes or intends to prove is not sufficient (Civ. Code, § 307; Scott v. King, 96 Kan. 561, 566, 152 P. 653; The State v. Ball, 110 Kan. 428, 432, 204 P. 701).

John Madden, John Madden, jr., and J. T. Rogers, all of Wichita, for the appellant; Dennis Madden, of Topeka, of counsel.

W. H. Carpenter, and W. R. Carpenter, both of Marion, for the appellee.

OPINION

DAWSON, J.:

This was an action on the following promissory note:

"$ 2,500.00.

FLORENCE, KANSAS, 5/27, 21.

"Three months after date I promise to pay to the order of myself twenty-five hundred and no/100 dollars at the office of , for value received, negotiable and payable without defalcation or discount and with interest at the rate of 8 per cent per annum until due, and eight per cent after due until paid.

"We, the makers, indorsers, assignors, and sureties, severally waive presentment for payment, demand, protest, or non-payment of this note.

"I or we further agree that should this note be placed in the hands of an attorney for collection after maturity I or we will pay in addition thereto as attorney fees an amount equal to 10 per cent of the balance due.

(Name.) D. F. URSCHEL."

. . . [Revenue stamps.]

"On back of note: 'There are no conditions offsetting this note and any bank, banker, corporation or individual has my permission to purchase the same.

D. F. URSCHEL.'

"T. S. MCQUEEN."

The plaintiff alleged he purchased the note for a valuable consideration, in due course of business, before its maturity, and that he was the owner and holder of it.

The defendant answered, pleading certain infirmities in the note arising from certain fraudulent conduct of an Associated Mill & Elevator Company for the sale of its stock for notes like the one in suit, and other matters which, so far as necessary, will be noted later in this opinion.

Issues were joined and the cause was tried before a jury. The plaintiff adduced evidence to show his ownership and possession of the note before maturity, and rested. Defendant's demurrer to the evidence was overruled. Defendant then offered a mass of documents in evidence tending to show the inception and history of a fraudulent undertaking on the part of certain persons who were floating the stock of a trust entitled, "Associated Mill & Elevator Company," certain pleadings in an insolvency and receivership case involving this company, and a deposition given by its receiver touching its financial affairs and records was likewise offered. This evidence, liberally construed, and disregarding consideration of its challenged competency, may be construed to show that those responsible for putting forth the documents pertaining to the trust had misrepresented the facts concerning its assets and liabilities. The trial court excluded these documents and deposition, and directed a verdict for plaintiff.

Defendant appeals.

The first question of importance to be determined is involved in defendant's contention that the note sued on is not a negotiable instrument. He argues, first, that the recital that the note is to bear "eight per cent after due until paid" renders the date of payment uncertain, which destroys its negotiability. While the authorities are not uniform on this point (Bracken v. Fidelity Trust Co., 54 L.R.A. 1915 B 1216, and notes), this court has virtually ruled to the contrary. In Parker v. Plymell, 23 Kan. 402, it was held that a promissory note was not rendered nonnegotiable because of a stipulation that it would bear 12 per cent interest after maturity. To the same general effect were Gilmore v. Hirst, 56 Kan. 626, 44 P. 603, and Clark v. Skeen, 61 Kan. 526, 60 P. 327; and see, also, Crump v. Berdan, 97 Mich. 293, 37 A. S. R. 345, 56 N.W. 559.

Touching the recitals of waiver of presentment, demand and protest, such waivers are quite common in printed forms of promissory notes; they are recognized by the negotiable instruments act itself and have no effect on negotiability. (Gen. Stat. 1915, § 6532, as amended by ch. 244, Laws of 1917, §§ 6609, 6638, 6639.)

( Glaze v. Ferguson, 48 Kan. 157, 159, 29 P. 396; Holmes v. Winters, 108 Kan. 227, 194 P. 639; Fisher v. Price, 37 Ala. 407; Farmers' Exch. Bank v. Altura, etc., Co., 129 Cal. 263, 61 P. 1077; State, ex rel. Parks v. Hughes et al., 19 Ind.App. 266, 49 N.E. 393; Savings Bank v. Hanna, 124 Iowa 374, 100 N.W. 57; Bank of Morgan City v. Herwig, 121 La. Ann. 514; Parshley v. Heath, 69 Me. 90; Wolford v. Andrews, 29 Minn. 250, 13 N.W. 167; Annville Nat. Bank v. Kettering, 106 Pa. 531, 533; Central Bank & Trust Co. v. Hill, [Tex. Civ. App.] 160 S.W. 1097; 8 C. J. 701, 702.)

Touching the stipulation that the note might be placed in the hands of an attorney for collection after maturity and that an attorney's fee of 10 per cent on the sum due would be paid, this recital is without legal significance. Even a stipulation authorizing a confession of judgment would not impair negotiability. (Laws of 1917, ch. 244.) The right of the holder to place the note in an attorney's hands for collection is in no wise dependent on this stipulation. This part of the recital neither adds to nor diminishes the holder's legal rights. And as to the promise to pay an attorney's fee, that part of the stipulation is wholly void (Gen. Stat. 1915, § 6475), but such a recital does not destroy the negotiability of a promissory note.

( Seaton v. Scovill, 18 Kan. 433, syl. P 1; Gilmore v. Hirst, 56 Kan. 626, 628, 44 P. 603. See, also, note in L. R. A. 1916 B 675, 684, 685; 8 C. J. 148, 150.)

Nor can it be said that the recitals on the back of the note impair its negotiability. The negotiable-instruments act recognizes that indorsers may, as they frequently do, qualify the scope of their indorsements, but the negotiable-instruments act provides that--

"A person placing his signature upon an instrument otherwise than as maker, drawer or acceptor is deemed to be an indorser, unless he clearly indicates by appropriate words his intention to be bound in some other capacity." (Gen. Stat. 1915, § 6590.)

( Farnsworth v. Burdick, 94 Kan. 749, 147 P. 863; Plow Co. v. Losey, 104 Kan. 400, 179 P. 358.)

Now it cannot be said that the recital on the back of this note indicated any intention on the part of the signer to be bound in any other capacity than as indorser, and it is not discernable that the recital had any significance which would add to or detract from the liability of an indorser under ordinary rules of law. Certainly the indorser's...