Rochford v. Barrett

• Decision Date: 07 March 1908
• Citation: 115 N.W. 522,22 S.D. 83
• Parties: ROCHFORD v. BARRETT.
• Court: South Dakota Supreme Court

115 N.W. 522

22 S.D. 83

ROCHFORD v. BARRETT.

Supreme Court of South Dakota

March 7, 1908

Appeal from Circuit Court, Minnehaha County.

Action by G. E. Rochford against George W. Barrett. From a judgment for defendant, plaintiff appeals. Affirmed.

Joe Kirby, for appellant.

Davis Lyon & Gates, for respondent.

CORSON J.

This action was instituted by the plaintiff as indorsee of a negotiable promissory note executed by the defendant to "the Practical Wire Fence Company" for the sum of $300. The defendant pleaded as a defense to the action that it was obtained from him by fraud. Verdict and judgment being in favor of the defendant, the plaintiff has appealed. Numerous errors are assigned, but appellant in his brief presents them under three heads: (1) Insufficiency of the evidence to sustain the defendant's defense; (2) errors in the receipt and rejection of evidence; (3) errors of the court in its instructions to the jury. The defense seems to have been based upon the statute defining actual fraud, which consists of any acts committed by a party to the contract "fitted to deceive" and promises made by the agent without any intention of performing them. Section 1201, Rev Civ. Code.

It appears by the evidence of the defendant as a witness in his own behalf, in substance, that one Newcome appeared in Sioux Falls representing himself as the agent of the Practical Wire Fence Company of Huntington, Ind., for the sale of machines for making a peculiar kind of wire fence; that the agent set up a machine in said city, and the witness saw and examined it, and the agent explained to him the method of using the same; that the agent also gave to the defendant one of their books describing it; that the witness took the book which was in the nature of a printed catalogue; that the witness examined the catalogue, and in a day or two thereafter saw the said Newcome again, who introduced to the witness another agent, Mr. Mitten; that he went with Mr. Mitten to his room and was informed by him that the company would like to appoint the witness as agent for the sale of machines in Minnehaha county, but that it would be necessary for him to give to the company security for the faithful performance of his duties, and that they would accept a note from him for $300, which he agreed should not be used by the company, and deposited in any bank selected by the witness; that the witness designated a certain bank in Sioux Falls as the one in which he desired the note to be deposited; that the company would furnish him with 15 machines for his township agents that he might appoint, and furnish him the machine at $2.50 each, which he could sell to the township agents for $5 each, and which they could sell to customers at $10 each, and that the township agents would pay $100 for their appointments, $37.50 of which should be paid to the witness; that thereupon the witness executed the note in suit; that said Mitten gave him a contract appointing him as agent for Minnehaha county for the period of three years with the right to appoint township agents; that the said Mitten agreed to remain and assist the witness in the appointment of township agents, and furnish the necessary printed instructions for them as to the manner of using the machines; that said Mitten and Newcome appointed one Nels Peterson township agent, from whom they secured a note for $100; that two or three days thereafter they sold defendant's said note and the Peterson note to the plaintiff, and left the city, and that the witness had not seen them since; that no machines came; and that the witness wrote the company a letter, to which the company replied that the machines would be shipped the next day, but that none came until after this action was commenced, when one was then shipped, but that the witness had never taken it from the depot.

It is contended by the appellant that the admission of the evidence in regard to the transactions between the defendant and Mitten and Newcome as agents of the company, and the admission of the contract in evidence appointing the defendant as agent, constituted error, for the reason that such evidence tended to vary and contradict the terms of the written instrument. But this contention is clearly untenable. Evidence tending to prove fraud in obtaining a written instrument is always admissible, not for the purpose of varying or contradicting the terms of the instrument, but to prove that such instrument has no legal existence or binding force. In discussing this subject Mr. Greenleaf in his work on Evidence, vol. 1, § 284, says: "It is in the next place to be noted that the rule is not infringed by the admission of parol evidence, showing that the instrument is altogether void, or that it never had any legal existence or binding force; either by reason of fraud, or for want of due execution and delivery, or for the illegality of the subject-matter. This qualification applies to all contracts whether under seal or not." Kirby v. Berguin, 15 S.D. 444, 90 N.W. 856; Newman v. Smith, 77 Cal 22, 18 P. 791; Ins. Company v. Wilkinson, 13 Wall. (U. S.) 222, 20 L.Ed. 617; State v. Cass, 52 N. J. Law, 77, 18 A. 972. It was competent, therefore, for the defendant to prove all the various acts on the part of the agents of the company for the purpose of showing that they were engaged in a fraudulent scheme to obtain from him the note sued upon, and the court was...