Mitchell v. Altus State Bank

• Decision Date: 12 March 1912
• Docket Number: Case Number: 1611
• Citation: 32 Okla. 628,1912 OK 203,122 P. 666
• Parties: MITCHELL v. ALTUS STATE BANK.
• Court: Oklahoma Supreme Court

1912 OK 203

122 P. 666

32 Okla. 628

MITCHELL v. ALTUS STATE BANK.

Case Number: 1611

Supreme Court of Oklahoma

Decided: March 12, 1912

Syllabus

¶0 1. BILLS AND NOTES--Nonnegotiable Note-- Defenses. It is no defense to the maker of a nonnegotiable note that it was signed upon a mere representation or promise that the payee would procure a third person to sign it. The rule, however, as to such a note, is different where at the time of signing it is understood that the note was not to become a completed or binding obligation until signed by another, nor to be delivered until so signed.

2. APPEAL AND ERROR--Harmless Error--Instructions. Where it appears from the evidence that a verdict is so clearly right that, had it been different, the court should have set it aside, such verdict will not be disturbed merely for the reason that there is error found in the instructions.

Error from Jackson County Court; M. L. Hankins, Special Judge.

Action by the Altus State Bank against William Mitchell and R. L. James. Judgment for plaintiff, and defendant Mitchell appeals. Affirmed.

S. B. Garrett and T. M. Robinson, for plaintiff in error.

Johnson, Morrill & Riegel, for defendant in error.

SHARP, C.

¶1 The note sued on was made payable to J. E. Fowler and R. L. James, and by them indorsed to the Altus National Bank, which was afterwards succeeded by the defendant in error, Altus State Bank. The note was made at Altus, Okla., February 2, 1907, and was payable at the Altus National Bank, and provided for the payment of an attorney's fee of ten per cent. in addition to the amount of the note, if placed in the hands of an attorney for collection, and is therefore a nonnegotiable instrument. Cotton v. John Deere Plow Co., 14 Okla. 605, 78 P. 321; Clevenger v. Lewis, 20 Okla. 837, 95 P. 230, 16 L.R.A. (N. S.) 410, 16 Ann. Cas. 56; Clowers et al. v. Snowden et al., 21 Okla. 476, 96 P. 596.

¶2 Defendant, Mitchell, in his answer admitted the execution of the note sued on, but charged that the same was not intended to be executed by him alone, and was not to be delivered until signed by W. Z. Mitchell, and that said note was not to be deemed binding on said defendant, and the execution thereof was not to be completed until so signed, and that said W. Z. Mitchell never at any time signed said note; that all of the foregoing facts were well known to the Altus National Bank, the purchaser of said note from the payees, J.E. Fowler and R. L. James.

¶3 Among other instructions contained in the court's charge, to which plaintiff in error excepted and assigned as error, are the following:

"(4) You are further instructed that the terms of a written contract cannot be varied, changed, or altered by parol testimony, unless there is an allegation on the part of the party seeking to establish the change or alteration that the said written instrument was procured and signed through fraud or deception, or by a mutual mistake of both parties when the said instrument in question was executed.

"(5) You are further instructed that a written contract is evidence of itself, and the terms therein expressed supersede and take precedent of any oral agreement that may have taken place at any time prior to the execution of the said written instrument, and is conclusive evidence of its own terms at the time that the same was executed, unless the same is attacked upon the ground of fraud, deception, undue influence, or mutual mistake of the parties at the time of the execution of said contract.

"(6) You are therefore instructed that if you find from the testimony that in the execution of said note in question there was neither fraud nor deception nor undue influence, nor a mutual mistake of both parties, as to whom this note should be made payable, or as to whether or not the defendant in this case should be principal or surety, then and in that event you must find for the plaintiff according to the stipulations in the face of said note, but if you find from the evidence adduced that there was fraud or deception or undue influence, or that both plaintiff and defendant were mistaken as to who this note should be made in favor of, or as to what purpose the defendant should sign the same, whether as principal or as surety, then and in that event the burden of proof as to this proposition rests upon the defendant, to be proven by a preponderance of the testimony, and, in that event, you should find that such fraud, deception, undue influence, or mutual mistake did exist, and has been proven to your satisfaction, then and in that event you must find in favor of the defendant."

¶4 The giving of these instructions constituted error, and is predicated evidently upon the erroneous theory that the evidence offered for the purpose of proving the statements or representations made at the time the note was executed tended to contradict the terms of the note, and to vary its legal import. Such is not the case. It was competent for defendant to show that the note was never rightfully delivered to the payees as a present contract; that it was not unconditionally binding upon the defendant, according to its terms, from the time that it was signed and left with the agent of the payees, but that, instead, it was left in the hands of Le Master to become an absolute obligation of the maker in the event that it was also signed by W. Z. Mitchell; and that it was upon this contingency alone to become a binding and enforceable obligation. Had there been testimony tending to show that the note was signed by William Mitchell conditionally, and that the same was not to be delivered unless signed by his son, W. Z. Mitchell, such evidence would have been competent. As was said in Hurt v. Ford (Mo.) 36 S.W. 671:

"This proposition does not infringe upon the valuable and general rule that protects writings from change by oral evidence. It is not even an exception to that rule. Until delivery is complete, the writing does not become operative as a contract between the parties."

¶5 In Burke v. Dulaney et al., Ex'rs, 153 U.S. 228, 14 S. Ct. 816, 38 L. Ed. 698, it is said:

"The rule that excludes parol evidence in contradiction of a written agreement presupposes the existence in fact of such agreement at the time suit is brought. But the rule has no application if the writing was not delivered as a present contract."

Ware v. Allen, 128 U.S. 590, 9 S. Ct. 174, 32 L. Ed. 563.

¶6 But were the allegations of the answer in this respect borne out by the testimony? We have read the entire record with care, and fail to find any testimony tending to show that plaintiff in error signed the note...