Stanton National Bank v. Swallow
| Decision Date | 16 April 1925 |
| Docket Number | 23014 |
| Citation | 203 N.W. 561,113 Neb. 336 |
| Parties | STANTON NATIONAL BANK, APPELLEE, v. CHARLES H. SWALLOW, APPELLANT |
| Court | Nebraska Supreme Court |
APPEAL from the district court for Lancaster county: WILLARD E STEWART, JUDGE. Affirmed.
AFFIRMED.
Burkett Wilson, Brown & Wilson and Reavis & Beghtol, for appellant.
George A. Eberly and Fred C. Foster, contra.
Heard before MORRISSEY, C. J., ROSE, DAY and THOMPSON, JJ., and SHEPHERD, District Judge.
This is an action on an unperformed oral promise, in connection with the purchase of two tracts of land in Texas, to take up or pay a promissory note for $ 6,500, dated October 22, 1919, and payable December 22, 1919. By purchase in good faith November 7, 1919, the Stanton National Bank, plaintiff, became the holder of the note. Charles H. Swallow is defendant. Plaintiff, though not a party to the transactions resulting in the execution and delivery of the note nor to the alleged oral promise by defendant to pay it, claims that, for a new and valuable consideration, the promise was made and that it inures to plaintiff's benefit. W. J. Patterson was maker and C. H. Swallow & Company payee. Not long after the date of the note it was indorsed thus: In this form Ervin Nye, an agent of payee, received it, sold it to plaintiff November 7, 1919, and remitted to defendant net proceeds to the extent of $ 6,200.
The alleged oral promise by payee Swallow to pay the note after he had indorsed it "without recourse" grew out of the following transactions and circumstances: October 22, 1919, Patterson executed and delivered the note to payee in part payment of the purchase price of 40 acres of land in Texas. Patterson was named in the land contract, which was in writing, as vendee, and C. H. Swallow & Company, "An Express Trust of Hidalgo County, Texas," as vendor. The written terms of sale were as follows: Consideration, $ 18,000; first payment, $ 9,000, consisting of a check for $ 2,500 and a note for $ 6.500--the note in controversy; remainder in five equal annual instalments evidenced by promissory notes secured by vendor's liens on the land purchased. Patterson was a farmer residing at Pilger, Nebraska. He inspected the land before agreeing to purchase it. On his way home from Texas he signed the sale contract on the train. He made the trip to and from Texas with a party of prospective purchasers accompanied by selling agents with whom he dealt. The principal office of vendor was in Lincoln, Nebraska. Ervin Nye, who sold the 6,500-dollar note to plaintiff and remitted the net proceeds to Swallow, was the latter's agent at Stanton, Nebraska. John T. Smith and H. R. Ryan were vendor's agents at Sioux City, Iowa. The petition, in substance, contains pleas that Patterson visited the Sioux City agency February 2, 1920, and then and there entered into an arrangement for the substitution of the 40-acre purchase for the purchase of other Texas land consisting of a 20-acre tract; that the substituted agreement was partly reduced to a writing which disclosed the following terms: Consideration or purchase price, $ 9,000; first payment, $ 3,600, being $ 2,500 paid October 22, 1919, and a check for $ 1,100; remainder of $ 5,400 payable in six equal annual instalments evidenced by promissory notes secured by vendor's liens on the 20-acre tract purchased; that Patterson paid, and Swallow received, the new and additional consideration of $ 1,100, agreeing to apply also on the second contract the 2,500-dollar payment on the first, to take up the 6,500-dollar note, which in the meantime he had sold and indorsed "without recourse," and to surrender the old contract. Plaintiff as an innocent purchaser of the latter note demanded judgment against Swallow on his promise to pay it. This is a mere outline of plaintiff's case. Though assailed by demurrer, the petition states a cause of action.
In addition to a general denial, defendant pleaded the statute of frauds and a former adjudication in his favor. The trial court submitted the issues to a jury and on their verdict a judgment was entered in favor of plaintiff for the full amount of its claim. Defendant has appealed.
The paramount error, as the record is reviewed by defendant, was the failure of the trial court to direct a verdict against plaintiff on motion of defendant. Under this head it is argued that there is nothing to show that the promise of Charles H. Swallow & Company, "An Express Trust of Hidalgo County, Texas," was the individual obligation of Charles H. Swallow; that there was no evidence to submit to the jury on the issue of defendant's agreement to pay the 6,500-dollar note; that any such agreement, if made, would be an oral promise to answer for the debt of another and as such would be unenforceable under the statute of frauds; that the contract to purchase the 20-acre tract was reduced to writing and contained no agreement on the part of defendant to pay the note in controversy, and that oral proof of such a promise was inadmissible for the reason that it would vary or contradict the written instrument; that plaintiff failed to prove that defendant, either by himself or his duly authorized agents, made such a promise for a valuable consideration at Sioux City, February 2, 1920, and that authority of the agents to make the promise on which the action is based was not shown.
Each of the positions thus taken by defendant seems upon examination to be untenable. For the purposes of this case "Charles H. Swallow," defendant, and "Charles H. Swallow & Company, An Express Trust of Hidalgo County, Texas," are identical. The record contains a copy of the declaration of trust. It shows that Charles H. Swallow conveyed to himself and another as trustees extensive interests in land, including title to the tracts described in the petition, and authorized the trustees to manage, sell and convey the trust property in the name of C. H. Swallow & Company. In the land contracts there was no stipulation protecting Charles H. Swallow from personal liability by making the trust estate the sole recourse of Patterson. The principles of law applicable to the facts are as follows:
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