Northern Trust Company, a Corp. v. Bruegger
| Citation | 159 N.W. 859,35 N.D. 150 |
| Decision Date | 10 October 1916 |
| Court | North Dakota Supreme Court |
Appeal from the District Court of Cass County, Pollock, Judge.
Affirmed.
Pierce Tenneson, & Cupler, for appellant.
To constitute an escrow the instrument must be delivered to a stranger. Delivery to any party to the instrument is complete delivery. The note is then valid, subject to counterclaim for damages for breach of any condition on which it was delivered. 11 Am. & Eng. Enc. Law, 337 et seq.; 16 Cyc. 573; Dils v. Bank of Pikeville, 109 Ky. 757, 60 S.W. 715.
If the proposed oral testimony is in any way inconsistent with the terms of the written instrument, it is wholly inadmissible. Elliott, Contr. § 1631.
If clear the language of the writing governs, and the intention of the parties must be ascertained from the written instrument. Rev. Codes 1905, §§ 5342, 5343, 5348, Comp. Laws 1913, §§ 5898, 5899, 5904.
The only criterion of the completeness of a written contract as a full expression of the agreement of the parties is the writing itself. 17 Cyc. 673, 675, 715, 717, 746, 747; Samuel H. Chute Co. v. Latta, 123 Minn. 69, 142 N.W 1048; Jones, Ev. §§ 454, 460.
The circumstances and situation of the parties may be shown by parol, but the language of the parties is excluded where inconsistent with the contract. Palmer v. Albee, 50 Iowa 433; 9 Enc. Ev. 374-377; Tuttle v. Burgett, 53 Ohio St. 498, 30 L.R.A. 214, 53 Am. St. Rep. 649, 42 N.E 427.
A contract which is voidable solely for want of due consent may be ratified by a subsequent consent. Rev. Codes 1905, § 5309, Comp. Laws 1913, § 5865.
Or by acceptance of the benefits, so far as the facts are known, or ought to be known, to the party accepting. 8 Cyc. 65, note 61; Lee v. McClelland, 120 Cal. 147, 52 P. 300; Nounnan v. Sutter County Land Co. 81 Cal. 1, 6 L.R.A. 219, 22 P. 515; Rev. Codes 1905, §§ 5310, 6701 to 6703, Comp. Laws 1913, §§ 5866, 7288 to 7290.
Waiver and ratification cannot be alleged by a stranger to any contract, but may always be proved where the suit is between the parties to the contract, a breach of which is alleged. 16 Cyc. 789, 879, note 20, citing; Canale v. Copello, 137 Cal. 22, 69 P. 698; Crutchfield v. Hudson, 23 Ala. 393; Letcher v. Morrison, 27 Ill. 209; Hoit v McIntire, 50 Minn. 466, 52 N.W. 918.
Where property held in escrow is wrongfully delivered, the transaction may be repudiated unless assent or ratification with knowledge of the pertinent facts, follows. Daniels v. Cower, 54 Iowa 319, 3 N.W. 424, 6 N.W. 525; Blight v. Schenck, 10 Pa. 285, 51 Am. Dec. 478; Langdon v. Brown, 160 Pa. 538, 28 A. 921; Jackson v. Lynn, 94 Iowa 151, 58 Am. St. Rep. 366, 62 N.W. 704.
A person who knowingly receives and accepts the benefits of a contract or transaction may be estopped to question the existence, validity, and effect of the contract. 16 Cyc. 787; Lake Street Elev. R. Co. v. Carmichael, 184 Ill. 348, 56 N.E. 372; Lane v. Pacific & I. N. R. Co. 8 Idaho, 230, 67 P. 656; Collins v. Cobe, 202 Ill. 469, 66 N.E. 1079; Morris v. Ewing, 8 N.D. 103, 76 N.W. 1047; Rev. Codes 1905, §§ 5310, 6701-6703, Comp. Laws 1913, §§ 5866, 7288-7290.
If the defrauded party acquires knowledge of the fraud while the contract remains executory, and thereafter does any act in performance or affirmance of the contract, or exacts performance from the other party, he thereby condones the fraud and waives his right of action. 20 Cyc. 92; Fitzpatrick v. Flannagan, 106 U.S. 648, 660, 27 L.Ed. 211, 215, 1 S.Ct. 369; Schmidt v. Mesmer, 116 Cal. 267, 48 P. 54; Kingman & Co. v. Stoddard, 29 C. C. A. 413, 57 U. S. App. 379, 85 F. 740; Simon v. Goodyear Metallic Rubber Shoe Co. 52 L.R.A. 745, and cases cited on page 747, 44 C. C. A. 606, 105 F. 573; 9 Cyc. 244; Omaha Lumber Co. v. Co-operative Invest. Co. 55 Colo. 271, 133 P. 1112.
A fraudulent intent is an essential element of fraudulent concealment. 20 Cyc. 36, note 40, 118, note 81.
In fraud cases the proof must be "clear," "satisfactory," "convincing." Ley v. Metropolitan L. Ins. Co. 120 Iowa 203, 94 N.W. 570; 20 Cyc. 39, note 54; Sioux Bkg. Co. v. Kendall, 6 S.D. 543, 62 N.W. 377; Taylor v. Guest, 58 N.Y. 262.
There is no proof of the actual damages. Such proof as was offered is largely speculative. Proof of damages must relate back to the day of sale and purchase of the newspaper. Gunderson v. Havana-Clyde Min. Co. 22 N.D. 329, 133 N.W. 554; Fargo Gas & Coke Co. v. Fargo Gas & E. Co. 4 N.D. 219, 37 L.R.A. 593, 59 N.W. 1066; Boddy v. Henry, 113 Iowa 462, 53 L.R.A. 769, 85 N.W. 771.
Evidence of a partial failure of consideration cannot be offered under an answer claiming a total failure of consideration. Nichols & S. Co. v. Dallier, 23 N.D. 532, 137 N.W. 570; 8 Cyc. 162, 163.
If the instructions of the court fail to cover a material part of the case, no request is necessary to preserve the right to claim error. Putnam v. Prouty, 24 N.D. 517, 140 N.W. 93; Rev. Codes, 1905, § 7021, Comp. Laws 1913, § 7620.
Where defenses are so inconsistent that the proof of one necessarily disproves the other, a motion to compel election should be granted. Murphy v. Russell, 8 Idaho, 133, 67 P. 426; Wendling v. Pierce, 27 A.D. 517, 50 N.Y.S. 509; Seattle Nat. Bank v. Carter (Seattle Nat. Bank v. Jones) 13 Wash. 281, 48 L.R.A. 771, 43 P. 331; 31 Cyc. 151, note 33.
It was error to permit counsel for defendant to comment on plaintiff's reasons for joining the printing company, as a defendant, and to state that it was done to prevent a change of venue. 38 Cyc. 1492, note 57-60, 1493, note 79-81, 1498; Keniston v. Todd, 139 Iowa 287, 117 N.W. 674; Fry v. Bennett, 3 Bosw. 200, 28 N.Y. 324; Rasciot v. Royal Neighbors, 18 Idaho 85, 29 L.R.A.(N.S.) 441, 138 Am. St. Rep. 180, 108 P. 1048; Neff v. Cameron, 213 Mo. 350, 18 L.R.A.(N.S.) 327, 127 Am. St. Rep. 606, 111 S.W. 1139.
Where an officer of a corporation is interested in a note, his knowledge will not be imputed to the corporation for which he is acting in purchasing the note. 5 Cyc. 461; Lilly v. Hamilton Bank, 29 L.R.A.(N.S.) 558, 102 C. C. A. 1, 178 F. 53; Mead v. Pettigrew, 11 S.D. 529, 78 N.W. 945; Thompson v. McKee, 5 Dak. 172, 37 N.W. 367.
The court committed error in requiring the plaintiff to amend the complaint when the Northern Trust Company was substituted for the Northern Savings Bank. The law did not require or call for such amendment. Rev. Codes 1905, § 6820, Comp. Laws 1913, § 7408; 20 Enc. Pl. & Pr. 1062; 31 Cyc. 487; Smith v. Zalinski, 94 N.Y. 524; 37 Century Dig. Parties, § 99; Decen. Dig. Parties, § 63.
V. R. Lovell and Engerud, Holt, & Frame, for respondents.
This suit is on a promissory note given by Bruegger to the News Printing Company and by such company indorsed to Northern Trust Company. The latter could not claim to be a bona fide purchaser, because Hollister, who was the president and managing officer of the trust company, had full knowledge of the infirmity in the note, and the trust company was chargeable with Hollister's knowledge. Halloran v. Holmes, 13 N.D. 418, 101 N.W. 310; McCarty v. Kepreta, 24 N.D. 395, 48 L.R.A.(N.S.) 65, 139 N.W. 992, Ann. Cas. 1915A, 834.
The rule against impeaching a written agreement by oral evidence has no application, for the reason that the letter, exhibit "6," does not state what the agreed conditions were. 9 Cyc. 772; Ingram v. Dailey, 123 Iowa 188, 98 N.W. 627; 9 Enc. Ev. 345, 346, 462.
All of those interested--the principals--in the newspaper held a meeting and agreed to launch the stock subscription enterprise, and agreed upon the general outlines of the plan. They delegated to a committee authority to arrange the details. This involved stating specifically what the plan was, the details of it, and manner of carrying it into effect. Therefore the statement of the plan of the meeting, prepared by this committee, is the best obtainable evidence of what the meeting resolved to do. Black v. Lamb, 12 N.J.Eq. 108; 1 Enc. Ev. 574; Pierce v. Roberts, 57 Conn. 31, 17 A. 278; Neely v. Naglee, 23 Cal. 152; Matzenbaugh v. People, 194 Ill. 108, 88 Am. St. Rep. 134, 62 N.E. 549; Copeland v. Boston Dairy Co. 184 Mass. 207, 68 N.E. 218; 16 Cyc. 1003; 1 Greenl. Ev. §§ 113 et seq.
We are not here dealing with a voidable contract, here the contract is valid and binding unless disaffirmed by the injured party promptly upon discovering that it was brought into existence by fraud, duress, etc.
The delivery of an escrow contrary to the plain conditions of the escrow agreement is a void act, and such a wrongful delivery by the escrow holder gives no life to the instrument so wrongfully delivered. 16 Cyc. 579-582.
The escrow holder is the agent of the author of the escrow, as well as for the other party, for the special purpose of the escrow agreement. Mechanics' Nat. Bank v. Jones, 76 A.D. 534, 78 N.Y.S. 800; Davis v. Clark, 58 Kan. 100, 48 P. 563; Shirley v. Ayres, 14 Ohio 308, 45 Am. Dec. 546; Lewis v. Prather, 14 Ky. L. Rep. 749, 21 S.W. 538; McDonald v. Huff, 77 Cal. 279, 19 P. 499; Gammon v. Bunnell, 22 Utah 421, 64 P. 958.
In determining whether or not the author of the escrow (the principal) has ratified or affirmed the unauthorized act of the escrow holder, we must be guided by the same principles that apply in any other case of agency. It is unlike a transaction voidable for fraud, duress, etc., which is valid if not promptly disaffirmed. This case presents the very opposite condition. The unauthorized act is invalid, and remains so unless made good by ratification or estoppel. Rev. Codes 1905, § 5763, Comp. Laws 1913, § 6331; Morris v. Ewing, 8 N.D. 99, 76 N.W. 1047.
In this case, if there were ratification, it could only be by an implied...
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