Smith v. Smith

• Decision Date: 30 January 1894
• Parties: SMITH v. SMITH
• Court: Idaho Supreme Court

35 P. 697

4 Idaho 1

SMITH v. SMITH

Supreme Court of Idaho

January 30, 1894

PROMISSORY NOTE-CONSIDERATION-FRAUD.-A person who gives a note in consideration of the performance of a certain act by the payee, and by reason of certain representations as to the law of the case, which representations prove to be false, and such note runs three months, falls due and a new note is given therefor by the maker of the original note, and the old note taken up, cannot plead want of consideration of the first note as a defense to the second.

(Syllabus by the court.)

APPEAL from District Court, Elmore County.

Decision affirmed. Costs awarded to the respondent.

Wyman &amp Wyman and T. D. Cahalan, for Appellant.

Where in an action on a promissory note brought by an indorsee against the maker, the defendant introduces in evidence facts showing, or tending to show, or facts from which the jury might find, there was fraud in the inception of the note, the plaintiff, before he can recover, must show himself to be an innocent purchaser for value, in due course, and before maturity; and if he fail so to show, the jury must bring in a verdict for the defendant. (Joy v. Diefendorf, 130 N.Y. 6, 27 Am. St. Rep. 484, 28 N.E. 602; Commercial Bank of Danville v. Burgwyn, 108 N.C. 62, 23 Am. St. Rep. 49 12 S.E. 952; First Nat. Bank of Huntington v. Ruhl, 122 Ind. 279, 23 N.E. 766; Commercial Bank of Danville v. Burgwyn, 110 N.C. 267, 14 S.E. 623; Real Estate Inv. Co. v. Russel, 148 Pa. St. 496, 24 A. 59; Franc v. Dickinson, 125 N.Y. 710, 26 N.E. 250; Vosburgh v. Diefendorf, 119 N.Y. 357, 16 Am. St. Rep. 836, 23 N.E. 801; Hazard v. Spencer, 17 R. I. 561, 23 A. 729; Tabor v. Merchants' National Bank, 48 Ark. 454, 3 Am. St. Rep. 241, 3 S.W. 805; Brant v. Pugh, 85 N.C. 39; Daniels on Negotiable Instruments, secs. 164-167; 1 Parsons on Bills and Notes, 187, 188; Johnson v. Hanover National Bank, 88 Ala. 271, 6 So. 909.)

E. M. Wolfe, for Respondent.

False representations must be matters of fact, and not of law. (People v. Board of Supervisors, 27 Cal. 677.) Misrepresentation of matter of law, not fraud. (2 Pomeroy's Equity Jurisprudence, sec. 877.) The evidence does not show that damages resulted to defendant by reason of the false representations, which is a necessary adjunct to false representations for relief. (Bailey v. Fox, 78 Cal. 398, 20 P. 868; Kisling v. Shaw, 33 Cal. 441, 91 Am. Dec. 644; Patterson v. Dorman, 48 Cal. 378.) A party is not justified in relying upon the assertions and representations of another where he has ample opportunity of verifying, or learning, the true status of a matter as fully as the party making the representations (especially in a matter of opinion). (Commissioners S. J. v. Younger, 29 Cal. 177; City National Bank v. Hickox, 4 N. Mex. 212, 16 P. 915.) Fraud must be proved; simply offering evidence of fraud is not sufficient to cast the burden on plaintiff of showing that he took the note before maturity and without notice, for value. (City Nat. Bank v. Hickox, 4 N. Mex. 212, 16 P. 912-914.)

MORGAN, J. Huston, C. J., and Sullivan, J., concur.

OPINION

MORGAN, J.

On the eighth day of July, 1891, the defendant, Cy. V. Smith, gave his promissory note to G. W. Fletcher, Jr., for the sum of $ 560.10. In consideration thereof the said Fletcher, who was then assignee of the estate of Jacob Ulrich, was to resign his position as said assignee, and procure the appointment to said position of the defendant, Cy. V. Smith. The said Fletcher was also to transfer a quantity of property which the said Fletcher then held as assignee aforesaid to the said Cy. V. Smith. Fletcher claimed that the estate of Ulrich was indebted to him for the foregoing sum for moneys advanced by him in the settlement of the estate, and that he would not deliver up the property to Smith unless defendant Smith, would give him his note for the amount he had advanced. It is also stated, and is in evidence, that Fletcher had represented to Smith at the time of procuring said note that no other claims than this already presented to the assignee could be collected from the estate of Jacob Ulrich, which statement, it is alleged, is untrue, and that Fletcher knew it to be untrue. The note above mentioned fell due October 1, 1891. On that date defendant, Smith, not being ready to pay the note, gave a new one therefor, dated October 1, 1891, for the sum of $ 560.10, due eight months after date, and payable to Fletcher & Fletcher, in which firm G. W. Fletcher is a partner; the latter note to draw one per cent per annum. The old note was delivered up to him. The latter note was transferred to William F. Smith in the following words: "Pay to the order of William F. Smith, without recourse to us. (Signed) Fletcher & Fletcher." On the last-mentioned note, plaintiff, W. F. Smith, commenced suit September 12, 1892. To the complaint Wyman & Wyman, defendant's attorneys, interposed a demurrer, which was overruled by the court, and the ruling of the court thereon excepted to. Thereupon the defendant filed his answer, alleging a want of consideration in the first of the abovementioned notes, and that it was obtained by fraud and false representation. The cause was tried before the Honorable C. O. Stockslager with a jury, resulting in a verdict for the plaintiff for the sum of $ 560.10 and interest. Judgment was entered thereon for the sum of $ 565.70. Defendant moved for a new trial, which motion was...