Norman v. Waite

• Decision Date: 18 September 1890
• Citation: 30 Neb. 302,46 N.W. 639
• Parties: NORMAN v. WAITE ET AL.
• Court: Nebraska Supreme Court

30 Neb. 302

46 N.W. 639

NORMAN

v.WAITE ET AL.

Supreme Court of Nebraska.

Sept. 18, 1890.

Syllabus by the Court.

1. Where, in an action upon a promissory note brought by an indorsee, the defendant in the answer alleged that the note was made and delivered to the payee, to be held by him as security and guaranty that one W., whom the payee had agreed, for the consideration of $1,500, to take into equal partnership in his business, the same to be paid out of W.'s share of the net proceeds of the business, would remain in said partnership, and faithfully perform his duty as such partner until said sum of $1,500 should be fully paid by the application of W.'s share of the net proceeds; and that W. had faithfully performed, etc., and alleged notice of such defense to the plaintiff at the time of the purchase of said note. Upon the pleadings and evidence, held, that the plaintiff could not recover without proof that he both bought and paid for the note before the receipt by him of notice of such defense.

2. The paper writing, purporting to be an article of agreement, set out in the opinion, held, not to convey title to the land described.

3. The existence of a written contract or instrument duly executed, between the parties to an action, and delivered, does not prevent the party apparently bound thereby from pleading and proving that, contemporaneously with the execution and delivery of such contract or instrument, the parties had entered into a distinct oral agreement which constitutes a condition on which the performance of the written contract or agreement is to depend.

Appeal from district court, Hamilton county; NORVAL, Judge.Agee & Stevenson and J. H. Smith, for appellants.

Hainer & Kellogg, for appellee.

COBB, C. J.

This action was brought in the Hamilton district court by F. R. Norman, plaintiff, against Daniel M. Waite, Mira A. Woods, and Austin J. Rittenhouse, defendants, for the purpose of foreclosing a mortgage of real property made by said Mira A. Woods for the securing of two promissory notes executed and delivered by the said Daniel M. Waite and Mira A. Woods to said Austin J. Rittenhouse, and by him indorsed to the plaintiff. The petition is in the usual form, with the allegation that the said notes were, before the same become due, by the indorsement of the said defendant Austin J. Rittenhouse, for a valuable consideration, “indorsed, assigned, transferred and delivered to the plaintiff, who is now the lawful owner and holder thereof; that no part of the principal or interest of said notes has been collected or paid, although the $1,000 note has long since become due and payable.” Also that the said Mira A. Woods did not keep said premises insured, as required by the covenants of said mortgage, but wholly failed to do so; that said Mira A. Woods also wholly failed to pay the taxes due on said premises for the year 1885, amounting to $9.15, as required by the covenants of said mortgage, but made default therein, and on October 29, 1886, the plaintiff, to protect his security, and to prevent a sale of said premises for said taxes paid the same, amounting, with interest, to the sum of $9.15, no part of which has been paid to the plaintiff. The defendant Mira A. Woods, by her answer, admitted that she executed and delivered the notes and mortgage in plaintiff's petition described, and that said mortgage was recorded as therein alleged. She further alleged that her co-defendant, Daniel M. Waite, is her son, and had, just prior to the execution and delivery of said notes and mortgage, been admitted to practice as an attorney and counselor at law of said court; that at said time Austin J. Rittenhouse, the payee of said notes had, for more than seven years, been an attorney and counselor at law of said court, and for two years then last past had been the tutor of said Daniel M. Waite; that, prior to the execution and delivery of said notes and mortgage, said Austin J. Rittenhouse proposed to her, the said defendant, and her said son, to take him, the said Daniel M. Waite, into a copartnership with him, the said Austin J. Rittenhouse, in the business of the practice of law, and buying and selling real estate on commission, making collections, loaning money, and doing such other business as said Rittenhouse had theretofore been doing at Aurora, Neb., as an equal partner, provided, said Waite would pay him, the said Rittenhouse, the sum of $1,500 for a half interest in said business, and in the office furniture and library which he, the said Rittenhouse, then owned; that said Rittenhouse, in order to induce said defendant to execute and deliver said notes and mortgage, fraudulently and falsely represented to her that the firm of Rittenhouse & Chambers, in which he was then a copartner with one Walter Chambers in the business aforesaid, was doing a business which paid them $3,000 over and above all expenses, and that said Waite's share of the net proceeds of the business of said Rittenhouse & Waite, in case such partnership should be formed, would, in one year, be more than sufficient to pay him, the said Rittenhouse, the said sum of $1,500; and that, at the time the said Rittenhouse made such representations, he well knew the same to be false, and well knew that the net proceeds of the business of said firm of Rittenhouse & Chambers did not exceed the sum of $1,500, and said representations were made for the purpose of inducing said defendant to execute and deliver said notes and mortgage. She further alleged that it was expressly agreed between her and the said Rittenhouse, which said agreement was by parol, that, in case he and said Waite should enter into said copartnership, then, upon the execution and delivery of said notes and mortgage by defendant, the same should be held by said Rittenhouse as security that the said Waite would remain in copartnership with him, the said Rittenhouse, and perform his part of the duties of said copartnership, and permit his share of the net proceeds of the business thereof to be applied to the payment of said sum of $1,500, to be paid to the said Rittenhouse until the same should be fully paid, and that it was expressly agreed that said answering defendant should not be called upon to pay any portion of said sum of $1,500, but that the same should be paid out of said Waite's share of the proceeds of the business of said copartnership, and that said Rittenhouse should hold said notes and mortgage for surety merely that said Waite would not abandon said copartnership, and that said notes and mortgage would not be transferred to any other person or persons; and defendant alleged that she relied upon the representations of the said Rittenhouse, and believed them to be true, when in fact they were false, and, being desirous of assisting her said son, she made, executed, and delivered the notes and mortgage aforesaid as a guaranty that said Waite would not abandon said copartnership without cause before said sum of $1,500 should be paid to said Rittenhouse, and that said Waite would perform, to the best of his ability, his duties as a member of said copartnership, and would permit his share of the net proceeds of the business thereof to be applied to the payment of said sum to said Rittenhouse until the same should be paid, and for no other purpose whatever. She further alleged that her said son and Rittenhouse entered into said copartnership on about the 1st day of April, 1886, and that her said son has duly performed each and every agreement on his part, and each and every duty as a member of said copartnership, but that, on or about the 16th day of June, 1886, the said Rittenhouse abandoned the business of said copartnership, and left the city of Aurora, Neb., where said business was to be carried on, went to the city of McCook, and formed a copartnership for the practice of law with one J. S. Le Hew, and has wholly abandoned and neglected the business of the firm of Rittenhouse & Waite, and fraudulently, and for the express purpose of cheating and defrauding defendant, transferred said notes and mortgage to said plaintiff, contrary to his said agreement with defendant. She further alleged that, by the terms of said notes and mortgage, the same became due on the 1st day of May, 1886, and had long been due when transferred to said plaintiff, and that, at the time the said plaintiff purchased the same, he well knew that the defendant had a good and valid defense to the same, and that the same had been obtained by fraud; and defendant denied that said plaintiff received said notes and mortgage in good faith before maturity and for value, and denied every allegation contained in said petition, and not in said answer admitted.

The defendant Daniel N. Waite, by his separate answer, admitted the execution and delivery of the notes sued on in the said case, but denied that the plaintiff received the same before due, and alleged that the said plaintiff is not an innocent holder of said notes, but that he took the same with information and knowledge that the same had been obtained through fraud, and with information and knowledge of the defense of him, the said defendant, hereinafter set out, to the payment of said notes; that on the 19th day of February, 1886, said defendant entered into an agreement with the payee of said notes to enter into a copartnership with said Rittenhouse in the practice of law, and the doing of a general loan, collecting, insurance, and real-estate business; that, just prior to the time of the execution and delivery of said notes, he, the said defendant, had been admitted to practice at the bar of said district court as an attorney and counselor at law; that the payee of said notes, Austin J. Rittenhouse, in order to induce said defendant to enter into a copartnership with him, represented and stated to him, said defendant, that the firm of Rittenhouse & Chambers, a copartnership composed of said Austin J. Rittenhouse and one Walter...