Starke v. Wannemacher

• Decision Date: 05 February 1916
• Citation: 32 N.D. 617,156 N.W. 494
• Parties: STARKE v. WANNEMACHER.
• Court: North Dakota Supreme Court

32 N.D. 617

156 N.W. 494

STARKE

v.WANNEMACHER.

Supreme Court of North Dakota.

Feb. 5, 1916.

Syllabus by the Court.

Section 9412, Comp. Laws 1913, does not render illegal the purchase by an attorney of a promissory note, unless it is shown that it was purchased with intent to bring suit thereon.

Where the evidence on the questions of delivery and failure of consideration of a promissory note is in conflict, such questions are properly submitted to the jury.

Following Turner v. Crumpton, 25 N. D. 134, 141 N. W. 209, and Houston v. Railroad Co., 25 N. D. 469, 141 N. W. 994, 46 L. R. A. (N. S.) 589, Ann. Cas. 1915C, 529, it is held that an order denying a motion for judgment notwithstanding the verdict is nonappealable.

Appeal from District Court, Stark County; Crawford, Judge.

Action by C. H. Starke against George R. Wannemacher. From a judgment for plaintiff and denial of motion for judgment notwithstanding the verdict, defendant appeals. Affirmed.

F. C. Heffron, of Dickinson (Newton, Dullam & Young, of Bismarck, on oral argument), for appellant. T. F. Murtha, of Dickinson, for respondent.

CHRISTIANSON, J.

This action was brought to recover upon a promissory note in the sum of $1,500, which it is alleged was executed and delivered by the defendant to the Missouri Slope Brick & Tile Company for a valuable consideration, on or about March 30, 1908, and thereafter sold and assigned to the plaintiff for a valuable consideration. The answer interposed the defenses of: (1) Want of consideration; (2) failure of consideration; (3) nondelivery of the note; and (4) that the plaintiff was an attorney at law, duly admitted to practice and practicing his profession in the state of North Dakota, and that he purchased the note with other choses in action from the said Missouri Slope Brick & Tile Company for the purpose of bringing suit thereon, and that hence the purchase was champertous, and plaintiff barred from maintaining the action. The latter defense was first tried to the court without a jury. The court held that the plaintiff's purchase of the note was not champertous, and that plaintiff had a right to maintain the action. A jury was thereupon impaneled, and the other issues were submitted to the jury, which returned a verdict in favor of the plaintiff. Judgment was entered pursuant to such verdict. Defendant did not move for a new trial, but some time subsequent to the entry of judgment moved for judgment notwithstanding the verdict. The appeal is taken from the judgment, and from the order denying defendant's motion for judgment notwithstanding the verdict.

Appellant makes no specification of insufficiency of evidence, but presents for our consideration certain errors of law. A number of such assignments, however, have been abandoned, and the only errors argued in appellant's brief, and hence the only ones which we shall consider are: (1) Was plaintiff's purchase of the note in question champertous and void under the laws of this state? (2) Was defendant entitled to a directed verdict upon the grounds of nondelivery of the note or want or failure of consideration thereof? We will consider these propositions in the order stated.

[1] 1. The note sued upon was given by the defendant to Missouri Slope Brick & Tile Company for 15 shares of stock in such company. The stock was purchased through the agency of one Kalman. At the time the note was given, the defendant also purchased 10 shares of stock in the same company owned by Kalman. The defendant executed and delivered his two notes, one for $1,000 for the 10 shares of stock purchased from Kalman, and one for $1,500 for the 15 shares of stock purchased from the Missouri Slope Brick & Tile Company (the latter being the note involved in this action). Kalman testified that he sold the stock, prepared the note involved in this action, and that the defendant, Wannemacher, signed it in his presence. He further testified:

“Q. And what was that note given for? A. For $1,500 worth of stock in the Missouri Slope Brick & Tile Company. Q. Was there any understanding or agreement as to what was to be done with the stock? A. The stock was to be held as collateral on the note. Q. That is, Mr. Wannemacher was not to have the stock until he paid the note? A. No; that says on the face of the note. Q. I call your attention to some writing in the lower left-hand corner of the note as follows: ‘Secured by Mo. Slope B. & T. Company stock No. -----,’ and ask you in whose handwriting that is? A. That's in my handwriting. Q. And when was that put on there? A. At the time this note was made. * * * Q. At the same time that Mr. Wannemacher gave this Exhibit F, the note for $1,500, did he purchase any other stock besides this of the Missouri Slope Brick & Tile Company? A. He did. Q. How many shares? A. Ten. Q. Who owned that 10 shares? A. I did. Q. Did he give you a note for that? A. I don't remember now which it was, but I think it was. Q. Was it understood between you and Mr. Wannemacher that the stock could be issued and held as security for the note? A. Yes, sir.”

The defendant paid the $1,000 note, and received the canceled note and the 10 shares of stock. Subsequently in 1910, the Missouri Slope Brick & Tile Company became insolvent, and a receiver was appointed. On April 5, 1913, the receiver, pursuant to the order of the court, offered for sale and sold at public auction all the remaining assets of the company consisting of 24 accounts, notes, and judgments against various parties, including the note involved in this action, and 16,850 miscellaneous bricks. All of such assets were purchased by the plaintiff at such receiver's sale.

Appellant contends that defendant's purchase of the note was champertous and void under the provisions of sections 9412 and 9417 of the Compiled Laws of 1913. These sections read as follows:

“Every attorney who, either directly or indirectly, buys or is interested in buying any evidence of debt or thing in action, with intent to bring suit thereon, is guilty of a misdemeanor.” Section 9412, Compiled Laws 1913.

“The provisions of sections 9412, 9414 and 9416 relative to the buying of claims by an attorney, with intent to prosecute them, or to the lending or advancing of money by an attorney in consideration of a claim being delivered for collection, shall apply to every case of such buying a claim, or lending or advancing money, by any person prosecuting a suit or demand in person.” Section 9417, Compiled Laws 1913.

The only evidence on the question of champerty was the testimony of the plaintiff himself. On being called by the defendant for cross-examination, under the statute, he testified in part as follows:

“Q. How did you purchase this note? A. I purchased this note at a sale which was advertised in the Dickinson Press of the assets and uncollectable accounts of the receiver of the Missouri Slope Brick & Tile Company at public auction at the front door of the courthouse in Dickinson. Q. And was the note delivered to you at that time? A. No. Q. Did you buy any other choses in action at that time? A. I bought a number of accounts at that time. * * * Q. And you expected to sue on them when you bought them, if necessary, for collection? A. I expected that if I couldn't collect them otherwise probably suit would be necessary on some of them. Q. And in pursuance of your intent to sue, if necessary, you brought this action? A. Yes. Q. Did you ever demand this of Mr. Wannemacher before bringing suit? A. No, sir. Q. You knew he was a responsible party? A. Why, I knew he wasn't. Q. You knew he had considerable money in the bank here at that time? A. No, sir; I knew just otherwise; that he wasn't a responsible party. Mr. Heffron, I'll tell you I knew that Mr. Wannemacher had no property in this country, and I thought the note was worth nothing, and I knew that all the property that he had was in his wife's name, and I didn't think the note was collectable. I also knew that he was a nonresident of this state. Q. And that he was worth considerable money? A. No. And I also knew that he had a number of legitimate debts around here which he had compromised, after getting his property out of his own hands, for a great deal less than half the face value of them.”

Being called as a witness in his own behalf, he testified in part as follows:

“Q. Did you buy this with the sole intent and purpose of suing Mr. Wannemacher? A. No, sir; I had no idea of suing on any of the accounts at that time. My real inducement in making the purchase was the brick which I knew to be of value. The accounts had been in the hands of Mr. McBride for a number of years, and he had attempted collection of them and had set them out as uncollectable, and I felt that they were of little, if any, value. Q. Mr. Starke, had you any idea or purpose at the time you purchased these notes or any other time of harassing or annoying Mr. Wannemacher? A. Not at all. I knew Mr. Wannemacher not at all. Knew nothing of him.”

It is not necessary to construe the statutory provisions invoked by defendant further than to say that this case is not within such provisions, or affected by them. The statute is penal. If the purchase was made in violation of the terms of the statute, then plaintiff is guilty of a misdemeanor. The presumption is that he is innocent. The statute does not pretend to prevent attorneys from making investments, or purchasing securities or obligations. It only forbids such purchase “with intent to bring suit thereon.” The offense rests in the intention. It is not the purchase, but the “intent to bring suit thereon” which converts an act otherwise lawful into a...