Stroud v. Payne
| Decision Date | 28 March 1933 |
| Docket Number | 28395 |
| Citation | 247 N.W. 595,124 Neb. 612 |
| Parties | T. F. STROUD, APPELLEE, v. G. H. PAYNE ET AL., APPELLANTS |
| Court | Nebraska Supreme Court |
APPEAL from the district court for Douglas county: ARTHUR C THOMSEN, JUDGE. Affirmed.
AFFIRMED.
Syllabus by the Court.
1. Discharge from liability on a promissory note is a valid and sufficient consideration for the execution of a new note for like amount.
2. There is valid consideration for a renewal note if there was such a consideration for the note of which it is a renewal.
3. Parol evidence is admissible to prove that makers of a promissory note authorized payments thereon by a corporation of which they were stockholders and directors.
4. Interest payments on a promissory note, made by a third party pursuant to oral authority given by the makers, are valid, notwithstanding the third party was not legally bound to make such payments. The statute of frauds has no application to such a transaction.
5. Parol evidence is admissible to prove a contemporaneous oral agreement by the makers of a promissory note that a third party should make interest payments on the note for them.
6. Any voluntary payment made upon a promissory note by the maker, or by any one by him authorized, will be sufficient to arrest the running of the statute of limitations.
7. Whether a payment made on a promissory note by a third party was authorized by the maker is a question of fact, and the findings of a jury upon such question will not be disturbed unless clearly wrong.
8. A defendant may not complain of the admission of evidence which would be incompetent as to him if it is competent as to his codefendant. Under such circumstances, he is entitled, upon request, to have the jury instructed that they shall not consider such evidence as against him. He may not complain of the failure of the court to give such an instruction unless he has requested it.
9. Misconduct of counsel is not ground for reversal of a judgment unless prejudicial to the complaining party.
10. An issue, not presented in the trial court, may not be raised for the first time in the Supreme Court.
Appeal from District Court, Douglas County; Thomsen, Judge.
Action by T. F. Stroud against G. H. Payne and others. Judgment for plaintiff, and defendants appeal.
Affirmed.
Patrick & Smith and Warren Howard, for appellants.
Shotwell, Monsky, Grodinsky & Vance, contra.
Heard before GOSS, C. J., DEAN, GOOD, EBERLY, DAY and PAINE, JJ.
This is an action on a promissory note, brought by the payee against the five makers thereof. One of the defendants was eliminated because of his discharge in bankruptcy proceedings. Plaintiff recovered judgment against the other four defendants, and they have appealed.
In their answer defendants admitted the execution of the note, and, as defenses, alleged that it was given without consideration, solely for accommodation of plaintiff, and also pleaded the statute of limitations.
The record discloses that plaintiff and defendants were stockholders and directors of the Albert Lea Farms Company (hereinafter referred to as the farms company). The farms company owned, and sought by drainage to reclaim, a large tract of swamp land in Minnesota. The farms company required more funds with which to carry on its operations and borrowed a large sum from an Omaha bank. Later the bank was unwilling to continue the credit or advance further funds to the farms company. Prior to this the farms company caused $ 150,000 par value of its preferred stock to be issued to defendant Payne as trustee, for which he gave his note to the farms company. This was done apparently for the purpose of showing that this additional amount of preferred stock was outstanding, and Payne was holding the stock for the purpose of sale for the company. Payne sold to others $ 36,500 of this stock which he held as trustee. Later he transferred the remaining $ 113,500 of this stock to the plaintiff as trustee, and at that time plaintiff, defendants and another stockholder and director of the farms company, in their individual names, borrowed $ 113,500 from the Omaha bank, and pledged as collateral security therefor $ 113,500 of stock held in the name of plaintiff as trustee. The money so obtained went into the treasury of the farms company. When this note matured it was renewed by all the makers save one who had died.
When the renewal note was about to mature, the bank refused to further renew the note, and insisted that it should be paid and taken up. The farms company was in urgent need of the money, and thereupon an arrangement was made whereby plaintiff, in his individual name, borrowed from the bank $ 113,500, and pledged collateral of his own to secure his note. At the same time, plaintiff contends, before he would enter into this arrangement to borrow the money, he insisted upon indemnity, and to indemnify him the defendants gave to him their note for $ 113,500, the note reciting that it was secured by $ 113,500 face value of the preferred stock of the farms company. When this note matured, it was renewed, on August 14, 1924, for $ 113,500, and this note recites on its face: "$
Defendants contend that, when the $ 113,500 of preferred stock was transferred from Payne to plaintiff as trustee, he purchased it outright, and that the note, given to the bank, for $ 113,500, which was signed by plaintiff and defendants, was to enable him to procure the money with which to pay for his stock. After plaintiff took the stock as trustee, $ 15,000 par value thereof was sold, and the proceeds were credited upon the note given by defendants to plaintiff. The indorsements upon the note for this sum were October 3, 1924, $ 5,000; November 10, 1924, $ 10,000. It is conceded that the farms company has paid all the interest upon this note and on the note of which it is a renewal. The following interest payments, with their respective dates, have been made upon the note in controversy out of the funds of the farms company, to wit, August 17, 1925, $ 3,486.30; February 17, 1926, $ 3,020.64; February 20, 1926, $ 426.86; August 13, 1926, $ 3,447.50. The present action was begun within five years from the date of the last indorsement, but more than five years after the due date of the note.
We will first consider the question as to whether the note was without consideration and given for the accommodation of the plaintiff. It may be observed that some of the defendants frankly admit that this note was regarded as an obligation of the farms company. There is evidence tending to prove that, in order to take up and cancel the note on which all the defendants and plaintiff were liable to the bank, and which the bank was pressing for payment, defendants executed to plaintiff their note for $ 113,500, and plaintiff gave to the bank his note, secured by his individual collateral for a like amount, and thereby the note on which defendants were liable was taken up and canceled. The evidence warranted the jury in finding that the defendants secured their release from a pressing obligation by the execution of their first note to plaintiff, and that there was a valid consideration therefor. If there was a valid consideration for that note, of course it extended to the renewal of the note.
A more serious question is the plea of the statute of limitations. The question is whether the last payment of interest, to wit, August 13, 1926, is sufficient to toll the running of the statute.
There is evidence from which an inference may be drawn that defendants arranged with the plaintiff for the payments of interest by the farms company, and that they knew such payments were being so made. They were directors of the farms company and, as such, are chargeable with notice of the business...
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