Manheimer v. Le Roy

• Decision Date: 03 June 1930
• Docket Number: No. 20966.,20966.
• Citation: 28 S.W.2d 379
• Parties: MANHEIMER v. LE ROY.
• Court: Missouri Court of Appeals

28 S.W.2d 379

MANHEIMER v. LE ROY.

No. 20966.

St. Louis Court of Appeals. Missouri.

June 3, 1930.

Rehearing Denied June 20, 1930.

Appeal from St. Louis Circuit Court; James F. Green, Judge.

"Not to be officially published."

Action by S. Manheimer against Edna E. Le Roy. From a judgment in favor of defendant, plaintiff appeals.

Affirmed.

Foster H. Brown, of St. Louis, and Sharp & Baynes, of New Madrid, for appellant.

Frank H. Fisse and Harry W. Kroeger, both of St. Louis, for respondent.

BENNICK, C.

On August 17, 1926, plaintiff brought this action upon a promissory note for $4,800, dated September 9, 1922, and due in three years, with interest payable semiannually at the rate of 8 per cent. per annum. Defendant was the maker of the note, and one Louis Kaufman was the payee.

After reciting the above facts, the petition set up that Kaufman had indorsed and delivered the note to plaintiff for value received before its maturity; that plaintiff was the rightful owner and holder thereof; and that no part of the note had been paid except interest for the period from the date of execution to and including March 9, 1923, and the payment of $445.83 upon the principal, on April 25, 1924. Plaintiff prayed judgment against defendant for the full balance due and payable, together with interest at the rate of 8 per cent. per annum to the date of judgment.

In her answer, defendant admitted the execution of the note, but denied that she had received any consideration therefor, and then followed her special defense with a general denial.

The reply was in the conventional form.

The case was tried to a jury, resulting in the return of a verdict in favor of defendant; and from the judgment rendered, plaintiff, after the overruling of his motion for a new trial, has duly perfected his appeal.

Prior to the execution of the note, defendant was the owner of an apartment building in the city of St. Louis, and Kaufman was the owner of eighty acres of farm land in Stoddard county, Mo. On September 8, 1922, a contract for the exchange of real estate was entered into by and between Kaufman and defendant, the latter being represented in the transaction by the Johnston & Johnston Realty Company of the city of St. Louis, by the terms of which contract an even exchange of the properties was agreed upon, with the further provision that Kaufman was to loan defendant the sum of $4,800, and have for his security a deed of trust upon the farm property in Stoddard county. On the following day, the note in suit, and the deed of trust securing it, were contemporaneously executed.

Plaintiff testified that the note was negotiated to him by Kaufman in October, 1922, and that he gave the latter a check for $3,640 therefor, and at the same time agreed that a debt of $1,160, which Kaufman owed him, should be extinguished. However, as opposed to the idea that plaintiff was a holder in due course, that is, that he had acquired the note before maturity, for value, and without notice of any infirmity therein, there was evidence from his own side of the case that he and Kaufman were brothers-in-law; that he was unable to produce the canceled check given in part payment for the note, the claim being that the check had been lost in a flood; that at a foreclosure sale on April 25, 1924, after a default under the deed of trust, Kaufman was allowed to purchase the farm for $500, although he admitted that it was worth $6,000; and that Kaufman was not made a party defendant to the present action on the note, although he was liable to plaintiff by reason of his indorsement thereof.

Defendant testified, and her opponents seem not to have controverted the fact, that she had acted only as a straw party for the Johnston & Johnston Realty Company, which was presumably her agent, and she further stated that she had merely expected to be paid a commission on the transaction, but had received none; that she had never been informed that plaintiff had acquired the note; and that no notice had been given her that there was a default in any of the payments, or that any demand had been made by plaintiff through the realty company for payment, or that foreclosure proceedings had been instituted.

At the close of all the evidence, plaintiff requested a peremptory instruction for a verdict in his favor, which the court refused to give, but which the court gave in a modified form so as to authorize a verdict for plaintiff if the jury should find that the note was indorsed by Kaufman, and delivered to plaintiff in 1922, before maturity. Counsel for plaintiff now have two complaints about the court's action: First, that there was no evidence of lack of consideration so as to have raised an issue for the jury; and, second, that the instruction as modified assumed that there had been no consideration. Of these points in their order:

There is no doubt about the fact that the defense of failure of consideration was an affirmative one, and that the burden was on the defendant to see to it that the whole evidence made a jury question about the matter, under pain of having a verdict directed against her in the event that she failed to bear the burden which the law cast upon her. Under the issues raised by the pleadings, therefore, and with a view to the evidence having to do with the transaction, particularly as it disclosed the relationship of the several parties thereto, it was necessary that the evidence show, not only that no consideration for the note had passed to defendant herself, but also that no consideration had passed to any one for her, which in this case would mean the Johnston & Johnston Realty Company, which had acted presumably as her agent. Main Street Bank v. Ennis, 222 Mo. App. 915, 7 S.W.(2d) 391.

Defendant herself testified positively in at least five separate instances that she had received absolutely nothing for the note, and that so far as concerned the Johnston & Johnston Realty Company she did not know whether Kaufman had paid the money to it or not. Obviously, with nothing but her own testimony considered, a jury question was not presented upon her defense of failure of consideration, for while it is true she testified that no consideration had passed to her, she did not bear the other half of her burden by offering evidence that no consideration had passed to her agent.

If the case had ended with the close of defendant's own testimony, a directed verdict for plaintiff would have been proper as against the defense of failure of consideration; but it did not so end. To the contrary, plaintiff then put Kaufman upon the stand as his witness, and Kaufman testified that he gave the check to defendant personally, which fact was further borne out by certain subsequent correspondence from the realty company to plaintiff, which disclosed that the interest payments were being made by the realty company for her.

The effect of Kaufman's positive testimony that the check had been given to defendant was to negative the idea that it might have been given to her agent, and in consequence it served the purpose, either of supplying the deficiency in her own proof, or else of obviating the necessity for her offering evidence upon that phase of the case by reason of the strict limitation which Kaufman's testimony had put upon the issue. In other words, in view of Kaufman's statement that the consideration had passed to defendant personally, whether or not it might otherwise have passed to her agent no longer figured in the case; and to sustain her burden of proof it...