Powers Mercantile Company v. Blethen

• Decision Date: 22 January 1904
• Docket Number: 13,760 - (196)
• Citation: 97 N.W. 1056,91 Minn. 339
• Parties: POWERS MERCANTILE COMPANY v. ALDEN J. BLETHEN
• Court: Minnesota Supreme Court

97 N.W. 1056

91 Minn. 339

POWERS MERCANTILE COMPANY v. ALDEN J. BLETHEN

Nos. 13,760 - (196)

Supreme Court of Minnesota

January 22, 1904

Action in the district court for Hennepin county to recover $996.66 and interest, for money paid for the use of defendant, and $395.54, and interest, upon a promissory note. The case was tried before W.R. Cray, J., who found in favor of plaintiff for the aggregate sum demanded. From an order denying a motion for a new trial, defendant appealed. Affirmed.

SYLLABUS

Money Paid.

The plaintiff, at the request of the defendant, paid for him seven promissory notes held by third parties. Held, that the plaintiff's remedy was not an action on the notes, but one for money paid for the defendant's use and benefit.

Limitation of Actions.

Sections 5145, 5146, G.S. 1894, relating to limitations of actions construed and held that the first applies to actions the subject-matter of which arises or originates in this state and the debtor is out of the state when the cause of action accrues, or afterwards departs therefrom; and that the second applies to causes of action not covered by the first -- that is, to actions the subject-matter of which arises out of the state.

C. H. Rossman, for appellant.

Plaintiff had its right of action on the notes on the express promise made by defendant and paid the amounts expressed in the notes and must sue thereon. To support an action of assumpsit or an action for money paid there must be a contract, express or implied, between the parties to the action, and further, it is essential to the maintenance of the action that the express or implied contract be founded upon a sufficient consideration. 4 Cyc. 321, notes 13, 14, and cases cited. The law will not imply a contract where an express one exists. 4 Cyc. 326, notes 45, 46, and cases therein.

Payment of a note by indorser does not discharge the indorsement, but the payer is remitted to his former rights against the antecedent parties. 4 Am. & Eng. Enc. (2d Ed.) 497, 498; Madison v. Pierce, 137 N.Y. 444; West v. Thompson, 124 Mass. 506; North v. Hamlin, 125 Mass. 506; National v. Davis, 24 Oh. St. 190; Fowler v. Strickland, 107 Mass. 552. The indorser's action against the maker where he has taken up the note at its maturity is upon the note itself and not for money paid to the maker's use. Fenn v. Dugdale, 31 Mo. 580; Howell v. McCracken, 87 N.C. 399; Kennedy v. Carpenter, 2 Whart. 344.

An action on the first cause of action set out in the complaint arose against the defendant in Washington when he moved into and became a resident of that state on June 1, 1896, and on the note, the subject-matter of the second cause of action, as soon as said note matured, namely, on September 1, 1896.

Defendant having resided in the state of Washington during the full period of limitation there, the case is within our statutes of limitation without regard to whether causes of action had ever arisen in Minnesota, for a fair construction of the Minnesota statutes leads to the conclusion that it was intended to establish the rule that a cause of action fully barred by the statute of any state of which defendant had previously been a resident is barred here, except in cases where the plaintiff is a citizen of this state and has had the cause of action from the time it accrued. Luce v. Clarke, 49 Minn. 356; Humphrey v. Cole, 14 Bradw. 56; Hyman v. Bayne, 83 Ill. 256; Osgood v. Artt, 10 F. 365; Harris v. Harris, 38 Ind. 423; Wright v. Johnson, 42 Ind. 29; Davis v. Harper, 48 Iowa 513; Thompson v. Read, 41 Iowa 48; Lloyd v. Perry, 32 Iowa 141.

Flannery & Cooke, for respondent.

As to five of the notes involved in this case respondent was not a party. As to two, it was an indorser. The notes were not paid by respondent in fulfilment of its contract of indorsement, neither were they purchased from the bank which was the owner thereof. They were simply paid as they matured by respondent for appellant, at his instance and request; and, under such circumstances, when paid, they ceased to exist as notes, and respondent could not maintain an action thereon. Lancey v. Clark, 64 N.Y. 209; Eastman v. Plumer, 32 N.H. 238. When commercial paper has been paid by the party whose debt it appears to be, it becomes commercially dead, but is evidence in the hands of the payer to charge the real debtor. First v. Maxfield, 22 Atlantic 479 (Me.); Fogarty v. Wilson, 30 Minn. 289; 2 Daniel, Neg. Inst., § 1236, (5th Ed.).

The form of action for money paid at appellant's request is in strict accordance with the facts, and is the only form of action which could be maintained under the statute or at common law. The fact that appellant was not relieved from liability makes no difference. Johnson v. Krassin, 25 Minn. 117; Emery v. Hobson, 62 Me. 578; Brittain v. Lloyd, 14 M. & W. 762; 2 Greenleaf Ev., 113; 4 Wait's Actions & D. 450.

Respondent corporation, so far as business transacted in this state is concerned, is made in effect a domestic corporation, and is entitled to all the rights, privileges and immunities of a domestic corporation. G.S. 1894, § 3425; Heileman Brewing Co. v. Peimeisl, 85 Minn. 121.

OPINION

START, C.J.

The complaint herein alleges two causes of action. The allegations as to the first one are to the effect that the plaintiff, between January 1, 1896, and June 1 following, at the special request of the defendant, and for his use and benefit, paid for him divers sums of money aggregating $996.66, specifying the amount and time of each payment. The allegations as to the second cause of action are that on May 1, 1896, the defendant executed to the plaintiff his promissory note of that date, and thereby, for value received, promised to pay to the order of the plaintiff, four months after date, the sum of $395.54, with interest. The answer put in issue the allegations of the first cause of action, admitted the execution of the promissory note, and alleged that it was given in payment of the balance found due from the defendant to the plaintiff upon a full and complete accounting and settlement of all accounts between the parties. As a further defense the answer set up the statute of limitations, pleading therewith the statute of limitations of the state of Washington. The new matter alleged in the answer was put in issue by the reply. The cause was tried by the court without a jury, and as a conclusion of law from the facts found the court directed judgment for the plaintiff for the amount claimed. The defendant appealed from an order denying his motion for a new trial.

The here material facts found by the court or admitted by the parties are substantially these: The plaintiff, from a time prior to January 1, 1896, has been, and now is, a corporation organized under the laws of the state of New Jersey, doing business at Minneapolis, in this state, and complying with all of the laws of this state. The defendant, from a time prior to January 1, 1896, to June 1, 1896, resided at the city of Minneapolis, this state, and on the day last named he removed from the state, and has since resided in the state of Washington. This action was commenced on December 29, 1902, by personal service of the summons upon the defendant at St. Paul, this state.

Actions can only be commenced in the state of Washington upon contracts in writing within six years after the cause of action accrues, and upon contracts not in writing within three years after the cause of action accrues, according to the statutes of that state. The subjectmatter of both causes of action arose -- that is, originated -- in this state while the defendant was a resident hereof. The plaintiff, at the request of the defendant, and before he left the state, paid and took up seven promissory notes made by him and held by third parties, which notes, except one, are now in the possession of the plaintiff. The plaintiff was an indorser on two of the notes, but was in no manner a party to the other five. The payments so made for the defendant aggregated $996.66, and the last one was made on May 1, 1896. None of such payments was included in the accounting alleged in the answer, or any part thereof included in the note executed by defendant to plaintiff.

1. The first point made by the defendant is that the plaintiff's right of action was upon the notes which it paid and took up at his request. As to the five notes to which the plaintiff was not a party, it is perfectly obvious that the transaction did not amount to a purchase of the notes by the plaintiff, for they were paid, not purchased, for the defendant, at his request. Upon the payment of the notes in compliance with such request, the law implied a promise on the part of the defendant to repay the amount so advanced on demand. The notes having been paid for the plaintiff, they ceased to be valid obligations, precisely as if the defendant had personally paid them. The notes, after the plaintiff paid them, were in its hands simply evidence of such payments. The other two notes were not paid by the plaintiff in discharge of its contract of indorsement, but in compliance with the request of the defendant, and when so paid they too ceased to be valid obligations. It follows that the plaintiff's remedy was not an action upon the notes, but one for money paid for the defendant's benefit at his request. Johnson v. Krassin, 25 Minn. 117.

It is suggested that there was no consideration for the defendant's implied promise to repay the amounts advanced by the plaintiff for the alleged reason that he was not thereby relieved from any liability. He certainly was relieved from liability to the holders of the notes, and the plaintiff, at his request, paid his debts, and his implied promise is just as...