Prichard v. Strike

• Decision Date: 03 February 1926
• Docket Number: 4268
• Citation: 66 Utah 394,243 P. 114
• Court: Utah Supreme Court
• Parties: PRICHARD v. STRIKE et al

243 P. 114

66 Utah 394

PRICHARD v. STRIKE et al

No. 4268

Supreme Court of Utah

February 3, 1926

Appeal from District Court, Third District, Salt Lake County Ephraim Hanson, Judge.

Action by A. M. J. Prichard against George M. Strike and another. Judgment for plaintiff, and defendant named appeals.

AFFIRMED.

Stewart Alexander & Budge, and E. A. Walton, all of Salt Lake City for appellant.

Hutchinson & Hutchinson, of Salt Lake City, for respondent.

STRAUP, J. GIDEON, C. J., and THURMAN, FRICK, and CHERRY, JJ., concur.

OPINION

STRAUP, J.

The respondent sold to the appellant Strike an apartment in Salt Lake City for $ 18,000. As part payment of the purchase price Strike transferred and delivered to the respondent a negotiable promissory note in the sum of $ 8,000 executed by the defendant Weber Sand & Gravel Company, a corporation, by Strike as its president and one Brown as its secretary, and payable to Strike as the payee. The note recited that it was secured by a chattel mortgage of even date therewith. When the note was transferred and delivered to the respondent, which was before its maturity, Strike indorsed it thus:

"For value received, I hereby assign, set over, and deliver unto A. M. J. Prichard all my right, title, and interest in and to the above note, together with the security evidenced by the chattel mortgage of the maker to the payee thereof, of the same date as said note."

The respondent brought this action on the note against the company and Strike. The company defaulted. Strike answered denying his liability on the note, and alleged that in the transaction with respect to the purchase of the apartment it was agreed by and between the respondent and himself that as a part of the consideration for the purchase the respondent would and did accept the note at its face value with only such an indorsement thereof as would assign his interest in the note to the respondent and without becoming liable otherwise as indorser for its payment; that he was informed by his counsel, and believed and understood, that the indorsement had only such effect, but, after the assignment and delivery of the note to the respondent, he, Strike, was informed that the indorsement was not a qualified indorsement, but in legal effect imposed on him all the liability of an unqualified or general indorser, which, as Strike further alleged, was not the intent or the agreement of the parties. All these allegations were denied by the respondent. Nowhere in the answer did Strike allege that the indorsement on its face was a qualified indorsement or constituted him a mere assignor of the title to the instrument, but averred that, when he made the indorsement, he was told and believed that it had only such effect; that he thereafter was informed the legal effect was to make him an unqualified indorser, and as such liable for the payment of the note, but that such was not the intention of the parties.

Without objection, evidence was given by Strike tending to support his claim that in transferring the note he was merely to be an assignor of the title of the note, while, on the other hand, the respondent, without objection, gave evidence to the contrary and as tending to support the claim of respondent that the indorsement was understood and intended to be an unqualified indorsement with all the imposed liabilities of such an indorser. In submitting the case to the jury, the court instructed them that the indorsement on its face was not a qualified indorsement, but by reason thereof Strike became liable as an indorser for the payment of the note, unless the jury found that the respondent, by an express agreement had with Strike, agreed to accept the note "with such an indorsement thereon as would relieve the defendant Strike from any personal liability thereon as indorser or otherwise and at the same time would pass title to the note to plaintiff." The jury rendered a verdict in favor of the plaintiff. Strike alone appeals.

On the appeal it is chiefly claimed by him that the indorsement was a qualified indorsement, and constituted him a mere assignor of the title to the note, and that hence the court erred in refusing to give his request to peremptorily direct a verdict in his favor and in charging the jury, as was done, that the indorsement on its face was not a qualified indorsement, but one which rendered Strike liable as an unqualified indorser.

At the threshold the respondent urges that the making of such claim by appellant constitutes a changing of position by him, and on the appeal as urging a theory different from that alleged in his answer, and on which the case was tried, in that he, in his answer in the court below, did not claim or allege that the indorsement as made was on its face a qualified indorsement or one which merely constituted him an assignor of title, but that, as he was informed, the indorsement in legal effect was an unqualified indorsement, and as such rendered him liable as an indorser, but that the parties did not intend that the indorsement should have such effect, and on such theory, and in accordance with his answer, the court submitted the case to the jury and not otherwise. There is much force to the respondent's contention.

It undoubtedly is true that the court, on appellant's theory, and as alleged by him, submitted the case to the jury, who, on such submission, rendered a verdict against him. Nowhere did the appellant request the court to charge the jury that the indorsement constituted him a mere assignor of title. All of his requests were bottomed on the hypothesis that, if the jury found that an agreement was had as alleged in the answer, their verdict should be for appellant. The substance of such requests was given. Whether there was such an agreement the evidence is in direct conflict. No claim is made that the verdict in such particular is contrary to the evidence or that there is not sufficient evidence to support it. All that is claimed in such respect is that the verdict is against the "preponderance" of the evidence. The appellant here, of course, urges that the claim that the indorsement constituted him a mere assignor of title was embraced in his request to direct a verdict in his favor. The request was a mere blanket request to peremptorily direct a verdict in his favor without stating any grounds therefor. To have given the request on such ground as now claimed would have been inconsistent with appellant's answer and the theory on which the case was tried.

However, we have concluded to consider the case on the theory as here presented, and, in doing so, we shall, on the record, review the court's ruling refusing appellant's request for a peremptory direction of the verdict and the charge of the court that the indorsement on its face was not a qualified but a general indorsement. The alleged error of the court in such particular is predicated on the claim that the legal effect of the indorsement merely constituted appellant an assignor of title and otherwise did not render him liable as an indorser.

Indorsements of similar wording and the legal effect of them have been before the courts in a number of cases both before and after the adoption of the Uniform Negotiable Instruments Law. The cases are in irreconcilable conflict.

To support his contention the appellant chiefly cites and relies on Hailey v. Falconer, 32 Ala. 536; Aniba, etc., v. Yeomans, 39 Mich. 171; Gale v. Mayhew, 161 Mich. 96, 125 N.W. 781, 29 L. R. A. (N. S.) 648; Hammond Lbr. Co. v. Kearsley, 36 Cal.App. 431, 172 P. 404; Evans v. Freeman, 142 N.C. 61, 54 S.E. 847; Spencer v. Halpern, 62 Ark. 595, 37 S.W. 711, 36 L. R. A. 120; Ellsworth v. Varney, 83 Ill.App. 94.

The respondent cites Copeland v. Burk, 59 Okla. 219, 158 P. 1162, L. R. A. 1917A, 1165; Farnsworth v. Burdick, 94 Kan. 749, 147 P. 863; Sears v. Lantz & Bates, 47 Iowa 658; Maine Tr. & Banking Co. v. Butler, 45 Minn. 506, 48 N.W. 333, 12 L. R. A. 370; Markey v. Corey, 108 Mich. 184, 66 N.W. 493, 36 L. R. A. 117, 62 Am. St. Rep. 698; Quinn v. Rike, 50 Cal.App. 243, 194 P. 761; Behrens v. Kirkgard (Tex. Civ. App.) 143 S.W. 698; Citizens' Nat. Bank v. Walton, 96 Va. 435, 31 S.E. 890, and 1 Daniel, Negotiable Instruments (6th Ed.) § 688c.

In 8 C. J. 371, the author, in considering indorsements of words of similar import as "without recourse," says:

"The...