Swedish-Am. Bank of Minneapolis v. Koebernick

• Decision Date: 20 October 1908
• Parties: SWEDISH-AMERICAN BANK OF MINNEAPOLIS v. KOEBERNICK ET AL.
• Court: Wisconsin Supreme Court

136 Wis. 473

117 N.W. 1020

SWEDISH-AMERICAN BANK OF MINNEAPOLIS

v.KOEBERNICK ET AL.^*

Supreme Court of Wisconsin.

Oct. 20, 1908.

Appeal from Circuit Court, St. Croix County; E. W. Helms, Judge.

Action by the Swedish-American Bank of Minneapolis against Carl Koebernick, Emil Koebernick, and Augusta Koebernick. Judgment for defendants, and plaintiff appeals. Reversed as to defendants Emil and Carl Koebernick, and remanded for new trial, with directions, and affirmed as to Augusta Koebernick.

This action is brought on two promissory notes executed by the defendants to the Kenyon-Rosing Machinery Company, a corporation, hereinafter called “Machinery Company,” which notes were deposited with the plaintiff as collateral security for the indebtedness due it from such corporation. In August, 1904, the defendants, or some of them, purchased from the said Machinery Company a separator, stacker, and engine, for which they agreed to pay $3,200. Notes for the entire purchase price were signed by all of the defendants and delivered to said Machinery Company; two of said notes being drawn for $125 each, two for $738 each and two for $737 each, such notes falling due at different dates. One of the notes for $738 and another for $737 were delivered to the plaintiff, as above stated. Early in September, by agreement of the parties, the engine which was delivered was returned to the Machinery Company because it did not comply with the contract of sale, in that it was a coal burner instead of a wood and straw burner, and another engine was delivered in its stead which used wood and straw for fuel. There was testimony tending to show that, at the time the exchange of engines was agreed on, some fault was found with the separator, and that the agent of the Machinery Company stated that, if it did not work satisfactorily after the new engine was put in use, it would be taken back, and that the notes given for the outfit would be surrendered. Some time after the engine was delivered, fault was found with the separator, and the defendants refused to continue using it, claiming that it did not fulfill the terms of the contract under which it was purchased. This claim on the part of the defendants led to other negotiations, which resulted in a new agreement being made between the parties on December 6, 1904, to the effect that the separator and stacker might be returned to the Machinery Company. There was some dispute in the testimony as to the amount of credit to which defendant should be entitled on account of the return of this part of the outfit. It was claimed on the part of the defendants that at the time the agreement for the return of the separator and stacker was made the Machinery Company through its agent agreed to surrender up and cancel the notes that were then outstanding, and that new notes should be executed in lieu thereof for the purchase price of the engine. The plaintiff contended that the agreement between the parties was to the effect that the two notes aggregating $250 should be surrendered, and that proportionate indorsements should be made on the remaining notes for the balance of the credit to which the defendants were entitled on account of the return of the property as stated. The notes in question were delivered to the plaintiff before the agreement in reference to the exchange of engines or the agreement in reference to the taking back of the separator and stacker was made. The defendant had no notice of the alleged transfer of the notes, but such notes are admittedly nonnegotiable. The jury found that the Machinery Company promised to surrender and cancel the notes originally given, and on the verdict so rendered the court entered judgment dismissing the complaint. Errors are assigned because of the failure of the court to direct a verdict for the plaintiff; because of the refusal of the court to change the answers to certain questions in the special verdict; because of the refusal of the court to render judgment for the plaintiff notwithstanding the verdict; and because of rulings on evidence.John Lind, A. Ueland, and Varnum & Anderson, for appellant.

Baker & Haven, for respondents.

BARNES, J. (after stating the facts as above).

We are met at the threshold of this case with the contention on the part of the defendants that no such transfer of the instruments sued on was made as would entitle the plaintiff to maintain an action thereon, and that, therefore, the judgment must be affirmed regardless of any errors committed in the trial of the cause. In support of such contention, it is urged (1) that an indorsement in blank by the payee of a nonnegotiable note, accompanied by delivery, does not transfer title to the note nor to the debt evidenced by it; (2) that the indorsement on the back of the notes, “Kenyon-Rosing Machinery Company by O. G. Rosing, Secretary,” was not shown to be the act of the corporation, no proof of authority to make the indorsement on the part of the secretary having been offered. An indorsement by the payee of his name on the back of a nonnegotiable promise to pay, accompanied by delivery of the instrument, constitutes prima facie a valid transfer of the chose in action and the debt represented by it, and the purchaser may maintain action thereon. Alexander v. Oneida County, 76 Wis. 56, 45 N. W. 21. Neither was it incumbent upon the plaintiff to prove that the secretary of the Machinery Company was authorized by the corporation to assign the notes. In Milwaukee Trust Company v. Van Valkenburgh, 132 Wis. 638, 645, 112 N. W. 1083, this court held that the president of a business corporation “is a usual officer as managing agent to execute such a paper as the one in question [an assignment of the note and mortgage], and it is implied in case of a transfer so signed that the officer had authority to act in the matter in the absence of proof to the contrary and notice to the person receiving the paper.” What is there said is just as applicable to the secretary of a business corporation as it is to its president. Both are general officers of such corporations who often perform interchangeably a wide...