Silver v. Overhead Door Co.
| Decision Date | 05 December 1949 |
| Citation | 311 Ky. 650 |
| Parties | Silver v. Overhead Door Co. |
| Court | United States State Supreme Court — District of Kentucky |
The Court of Appeals, Morris, C., affirmed the judgment holding that the failure to award maker of note the burden of proof was harmless where there was consideration for the note and no proof of mutual mistake and that a directed verdict for payee was proper.
1. Bills and Notes. — Where the maker of a note in an action on the note enters a plea of "no consideration," the maker has the burden of proof.
2. Bills and Notes. — In action on note, defense that maker signed note on payee's promise not to demand payment unless maker could obtain through payee's influence a volume of business which would enable him to pay note out of profits, was a "plea of no consideration," and maker had burden of proof.
3. Appeal and Error. — In action on note, failure to award maker burden of proof where maker, as salesman for payee, signed note upon termination of employment in settlement of his overdrawn account, was harmless, where plaintiff was entitled to a directed verdict.
4. Evidence. — Any correspondence between maker and payee of note, prior to negotiation of note, was merged into the agreement when note was executed.
5. Bills and Notes. — Where salesman signed note upon termination of employment in settlement of his overdrawn account with employer, as a balance on account stated, unquestioned as to amount due after adjustments, and containing items salesman had purchased from or through employer, there was consideration and employer could recover in action on note.
6. Bills and Notes. — Where salesman signed note upon termination of employment in settlement of his overdrawn account with employer, and failed to prove alleged agreement that drawing account was against earned commissions, there was no mistake or mutual mistake, in failure to incorporate agreement in note and employer could recover in action on note.
7. Bills and Notes. — A promissory note imparts consideration on its face.
8. Bills and Notes. — Defense of mutual mistake to action on a note resembles a plea for reformation of the instrument, and must be proved by clear and convincing proof.
9. Contracts. — When both parties participate in the transaction and each labors under the same conception of the alleged agreement, there is "mutual" mistake and the instrument is void.
J.W. Jones and Jones & Jones for appellant.
James Shaw for appellee.
Before William H. Field, Judge.
MORRIS, COMMISSIONER.
Affirming.
On April 17, 1942, appellant delivered to appellee his promissory note for $901.20. In April of 1947 appellee filed petition alleging demand and non-payment and sought recovery. The substituted answer filed plead no consideration for execution of the note, and "that said note was signed and delivered by him to plaintiff with the understanding that if he would execute the note, plaintiff would not demand payment except upon condition that defendant could obtain through efforts and influence of plaintiff a volume of business which would enable him to pay said note out of his profits from said business, but by mutual mistake of the parties thereto said condition was not inserted in and made a part of said note, and that said business was not obtained by the defendant." A reply in denial joined issue.
When the case was called Silver moved the court to adjudge him the burden of proof. This motion was overruled and the court cast the burden on plaintiff over objection. At the close of all the testimony both parties moved for peremptory instruction. The court sustained plaintiff's motion, and the jury returned a verdict for the amount above mentioned and judgment was entered in accordance. On appeal it is contended that the court was in error, (1) in not awarding defendant the burden of proof; (2) in refusing to permit defendant to introduce certain copies of letters as secondary evidence, and lastly that the court erred in giving peremptory instruction for plaintiff, and in overruling defendant's motion for such an instruction.
On the first point appellant argues that since defensive plea was one of "no consideration" defendant was entitled to the proof burden. The rule is that a plea of "no consideration" places the burden on the defendant. Andrews v. Hayden's Adm'r, 88 Ky. 455, 11 S.W. 428; Lawyers' Realty Co. v. Bank of Ludlow, 256 Ky. 675, 76 S.W. 2d 920, and cases cited. We are of the opinion that the court was incorrect in award of the burden. Counsel for appellant in brief says that since the court "sustained plaintiff's motion for directed verdict, perhaps the burden is of no great importance," unless a new trial be directed.
The facts were that appellee was engaged in the sale and installation of overhead doors. It also acted as an agent of the Roleson Company in the sale of screens and Venetian blinds. This business was not profitable, and some time in 1940 appellee sought a discontinuance and this move caused the Roleson Company to contact Silver, a former employee, and to suggest that he apply to appellee for employment. Appellant applied by letter of May 17, 1940, this led to a response and to a later meeting of parties, and it was agreed that appellant was to handle the Roleson products on a commission basis, he to have 60 per cent of profit on business obtained and a $25 weekly drawing account.
Appellant continued in appellee's employ for about two years during which the business was not profitable, though he drew his $25 weekly, his commissions were much less than the total amount drawn. During his employment appellant had married and found that his income was not of...
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