Porter v. Andrus
| Citation | 88 N.W. 567,10 N.D. 558 |
| Decision Date | 17 December 1901 |
| Court | United States State Supreme Court of North Dakota |
Appeal from District Court, Cass County; Pollock, J.
Action by Frank J. Porter and others against William P. Andrus and others. Judgment for defendants, and plaintiffs appeal. Affirmed.
Affirmed.
George A. Bangs, for appellants.
Pollock & Scott, for respondents.
This is an action upon a promissory note executed and claimed to have been delivered by the defendants to the Leeds Importing Company. As amended, the complaint states a cause of action upon a promissory note in the ordinary form with the following allegation appertaining to the tranfer of such note to the plaintiffs. viz.: "That on the 24th day of June 1893, the Leeds Importing Company being indebted to these plaintiffs in a sum largely in excess of the amount due on the promissory note above described, indorsed said note as follows: "The Leeds Importing Company, by E. Cooper Secretary;" and transferred the same to these plaintiffs as collateral security to said indebtedness due these plaintiffs from said Leeds Importing Company, upon the consideration that the date of the maturity of said indebtedness be extended by these plaintiffs for the period of four months." The defendants answered the complaint and the amended complaint and alleged, in substance, that on or about May 2, 1892, the defendants were negotiating with the Leeds Importing Company for the purchase of a horse, and agreed with said company that with the said company's co-operation and assistance these defendants, with certain other persons whom said company promised and agreed to procure and induce to take stock in said company, would organize a joint-stock company for the purchase of said horse; that the performance of said agreement was entered upon, and only partially consummated; that the defendants, at the request of said Leeds Importing Company and for the purpose of facilitating the transaction of the business, signed their names to a paper of the character and description of that mentioned and described in the complaint, but upon the express promise and conditions that said note should not be delivered to the said Leeds Importing Company or to any other person until all of the stock of the said company should have been placed, and all of the stockholders should have signed the said note; that said Leeds Importing Company procured possession of said note by fraud and stealth, and departed from the state clandestinely, long before said agreement was consummated, and before said stock of said proposed joint-stock company had been all sold, and before all of the holders of said stock had signed said note, and that in consequence of such action of said company in taking said note out of the state the note was never signed by such other persons, The answer further alleges that such note was transferred to plaintiffs as collateral security for the payment of a pre-existing indebtedness due from said Leeds Importing Company to plaintiffs and not otherwise. The case was tried to a jury. The only question submitted to the jury was whether there was an extension of the time of the payment of the indebtedness from the Leeds Importing Company by plaintiffs at the time the note in suit was indorsed to the plaintiffs by the Leeds Importing Company. The jury found for the defendants, thus finding that there had been no extension of time of the payment of the indebtedness between those parties at that time. The plaintiffs regularly moved for a new trial upon a statement of the case, duly settled, which motion was denied. The plaintiffs appeal to this court from the order denying such motion for a new trial.
The errors specified and assigned are that the court erred in not granting plaintiffs' motion for a directed verdict, and that there was error on the part of the court in not granting plaintiffs' motion for a new trial. Upon a careful consideration of the evidence, we are satisfied that there was no error in submitting to the jury the question whether there was an extension of the time of payment of the indebtedness from plaintiffs to the bank at the time that the note in suit was transferred to them. One witness testified that it was his "recollection and belief" that June 24, 1893, was the time when the plaintiffs received the note, and the time of payment was then and there extended for a period of four months. But other facts were testified to by this and other witnesses, which, if believed by the jury, would be good grounds for not believing the witness testifying as to the precise time of the transfer and of the extension of the time of payment. This witness was the secretary of the Leeds Importing Company, and the officer that transferred the note to the bank by the written guaranty. He testified by giving two depositions. In the first the precise date of the guaranty was not given, nor did he mention the extension of the time of payment in consideration of the transfer of the note to the bank. He testified that the bank gave him a receipt for this note at the time of the transfer to the bank, but this receipt was not produced. His testimony that he had no notice that defenses were claimed to the note when he transferred it seems to be contradicted by a letter written by him to one of the makers in answer to one to him from this maker, in which this maker complains that the note was delivered to the payee contrary to agreement. These letters were written before the note was turned over to the bank.
Members of the plaintiffs' firm testified that the note was transferred to them as collateral security for the indebtedness due from the Leeds Importing Company to their bank, without any mention of the extension of the time, and without furnishing any data as to the precise time of such transfer. From all of these considerations, we do not think that the secretary's testimony was of that character that entitled it to such absolute weight that a verdict should have been directed upon it. The weight of it under the circumstances, was properly submitted to the jury in connection with the other testimony, and the court did not err in refusing to direct a verdict for the plaintiff.
The next question to be determined on this appeal is, was there such a delivery of the note in suit to the payee as to bind the makers thereof when in the hands of the plaintiffs, under the circumstances under which the plaintiffs received it? The facts pertaining to the delivery of the note to the payee were stipulated by the attorneys at the trial and are as follows: "It is now stipulated that the note was signed by the several parties who did sign the same upon the understanding and promise of the payee that same should be deposited with T. R. Peart, and not delivered to the payee or any other person until $ 800 more of the stock should be subscribed for, and the subscribers of such additional stock should have signed said note; that said note was never signed by any other subscribers, and never delivered according to the terms of the agreement, but was clandestinely taken by the agent of the payee out of the state; and that no delivery of said note was ever made by any of the parties who signed the same." From this stipulation it appears that delivery to the payee was unauthorized at the time made. This note was therefore delivered and put into circulation in fraud of the rights of the makers, and recovery thereon could not be had in an action by the payee named therein. This is conceded by the plaintiffs. However, the note was upon its face regular and negotiable in form and duly signed when delivered to the agent by defendants. It was transferred to the plaintiffs by a written guaranty of payment, absolute in its terms. Such an unauthorized delivery to the payee and its subsequent transfer to the plaintiffs, the present holders, does not make the note subject to defenses by the makers, providing the plaintiffs are holders of the note in due course, without notice, for value. It simply compels the plaintiffs to show that they are such holders. The possession of the note alone, duly indorsed to them, is not sufficient to protect them as...
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