Vermont Farm Mach. Co. v. Hall

• Decision Date: 25 April 1916
• Citation: 156 P. 1073,80 Or. 308
• Parties: VERMONT FARM MACH. CO. v. HALL.
• Court: Oregon Supreme Court

156 P. 1073

80 Or. 308

VERMONT FARM MACH. CO. v. HALL.

Supreme Court of Oregon

April 25, 1916

Department 2.

Appeal from Circuit Court, Marion County; Percy R. Kelly, Judge.

Action by the Vermont Farm Machine Company against Frank W. Hall. Judgment for the defendant, and plaintiff appeals. Reversed and remanded.

This is an action on a promissory note. The cause was tried before the court and a jury, and a general verdict rendered in favor of defendant. A judgment was entered accordingly, from which plaintiff appeals.

The following is shown by the record: The note in suit bears date, January 2, 1913. On or before January 1, 1914, for value received, the subscriber thereby promises to pay to the order of the Farmers' Implement Company of Portland, Or a corporation, $1,700, with interest at 6 per cent. per annum. The note contains the following stipulation:

"It is agreed that this note is to be paid in installments as follows: $25.00 on or before the 30th day of Feby. A. D 1913. $25.00 per month until paid. * * *"

It is signed by Franklin W. Hall. This indorsement appears on its face, "Renewal of note dated Oct. 1912," with indorsements on the back thereof as follows "Farmers' Implement Co., by J. K. Eaton, Secy Tr." "$25.00 paid 1-13-13." "25.00 paid 3-20-13."

The defendant, Frank W. Hall, alleges the following in effect: On October 1, 1912, he executed to the Farmers' Implement Company his promissory note for $1,700 due January 1, 1913. Upon its maturity he was unable to meet the same, and agreed with the payee that he would make a new note and that the old one should be canceled and returned to the defendant at Turner, Or., by the Farmers' Implement Company from its office in Portland. Upon such express condition, and without any other consideration, the note in question was signed and left in the possession of the above company. Defendant also avers that the same was not to become operative until the old note was so canceled and returned; that the Farmers' Implement Company failed and refused to return to the defendant the old note, and has transferred the same and negotiated the note sued on in disregard of its agreement and with the purpose of defrauding the defendant; and that plaintiff obtained said note after maturity and with knowledge of infirmities. For a further and separate answer by way of a plea in abatement defendant alleges: That plaintiff is a foreign corporation, transacting business in the state of Oregon, and has not filed its declaration, nor paid its entrance fee, as required by law before doing business within the state, nor executed and acknowledged a power of attorney, nor caused the same to be recorded in the office of the secretary of state. The reply denies the material part of the new matter of the answer, except that it admits that it has not filed any declaration, paid any entrance fee, nor executed a power of attorney in compliance with the laws of this state, relating to foreign corporations transacting business within the state. It denies that it is or ever has been doing any business within the state, and alleges that the only business transacted by it in the state of Oregon is interstate commerce, and that the taking of the note and the transactions in connection therewith were all a part thereof.

Testimony was introduced on behalf of plaintiff tending to show the following: One C. W. Swanson had charge of plaintiff's business in several of the coast states, including Oregon during 1912-1914. During a part of that time the company was selling its cream separators and dairy accessories by sending agents to take orders from dealers, these orders being sent to the plaintiff's home office at Bellows Falls, Vt., for acceptance. Plaintiff had an arrangement with the Oregon Transfer Company in Portland, Or., whereby carload lots of its goods were sent for storage to a warehouse maintained by the transfer company. The warehouse had no authority to deliver any goods except on direct mail or telegraphic orders from plaintiff's home office, where the orders taken by plaintiff's salesmen were accepted, and which directed the warehouse to deliver to the purchaser the goods covered by such orders. Swanson could see the goods in the warehouse and show the same to prospective purchasers, but he had no authority to interfere with the shipping, give the warehouse any orders, or procure any goods therefrom. The plaintiff sold goods to the Farmers' Implement Company under an agreement made in the usual course of its business, and there was no contract made by Swanson, or any one in Oregon, with that company without submission to the Vermont office. In December, 1912, the Farmers' Implement Company was buying a great quantity of plaintiff's goods and was behind in its payments. Notes were accepted by plaintiff as part payment on the account, with which the company tendered plaintiff a note which it had received from defendant Frank W. Hall which was then nearly due. Because of this plaintiff refused to accept the note, and Mr. Eaton, an officer of the Farmers' Implement Company, said he would try and secure a renewal of Hall's note and get security. Later Eaton reported that he could not get security for the renewal of the note which he had secured from the defendant, and plaintiff agreed to waive security and accept the new note. No books were kept in the office maintained in Portland, and Swanson was obliged to write or wire to the home office in regard to the condition of any one's account. The plaintiff's attorney in Portland assisted in the settlement and negotiations in regard to the notes. It was agreed there was a gross amount of about $4,800 owing from the Farmers' Implement Company to the plaintiff. The note in controversy was received in part payment thereof shortly prior to March 3, 1913, probably in the latter part of February. Plaintiff was unaware of the failure of the Farmers' Implement Company to surrender the old note.

On the part of the defendant the evidence tended to show that the note was given as a renewal note without any further consideration; that the old note mentioned was never surrendered; that the time the note in question was executed Eaton said he would send the old one to Hall; that the latter relied upon this promise; that the original note was given in payment for stock of the Farmers' Implement Company; and that Hall had made $25 payments on the new note. A. L. Heitzman testified in behalf of defendant that he had been a salesman for the company during its existence. He was thereupon asked the following question by defendant's counsel:

"Q. What, if any, instances, do you remember of where you went to the warehouse and took off pieces of separators there to substitute for pieces that you didn't have in stock in the repair supplies?"

To this counsel for plaintiff objected. This objection was overruled and an exception saved. The witness answered:

"Well, for instance, we wanted a No. 17 bowl and didn't have one in stock; we would go up to the warehouse and get one, and Mr. Eaton would give us a requisition, and we would go up there and get that bowl and take it down and make whatever change we wanted to."

This witness also testified to the effect that he informed Mr. Swanson that Eaton promised Hall that the old note would be returned before the new one would become effective, and that the former was in the possession of the International Harvester Company which refused to surrender it. The testimony of Heitzman as to the note was disputed by C. W. Swanson, agent of plaintiff.

On the evening before the day of the close of the argument to the jury and during the progress thereof, which, under the rules of the trial court was too late, plaintiff's counsel requested the court to instruct the jury that plaintiff was entitled to carry on the suit, as the transaction was in the nature of interstate commerce, and also requested several other instructions, and asked that in the event the case was submitted to the jury, a special verdict be required as to whether plaintiff was engaged in interstate commerce and entitled to maintain the suit.

Arthur I. Moulton, of Portland, for appellant. W. C. Winslow and S. M. Endicott, both of Salem, for respondent.

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

At the close of the evidence plaintiff's counsel moved the court for a directed verdict in favor of plaintiff. It is sufficient upon this point to state that the evidence tended to show that the note in suit was given as a renewal note for one theretofore given to the Farmers' Implement Company, and that the old one was not canceled or returned as agreed.

If the action were brought by the Farmers' Implement Company, it could not be successfully maintained that that company would be entitled to collect the note in question without surrendering the old one, as the evidence tends to show there was no other consideration for the new note, and that the agent of the plaintiff conducting the negotiations had knowledge of the facts mentioned. It was proper, therefore, to submit to the jury whether or not the plaintiff received the note in due course before the same was due, and there was no error in overruling the motion for a directed verdict.

There was no question raised by demurrer or motion as to the manner of interposing the plea in abatement. In view of the fact that the provisions of the statute in regard to permitting a foreign corporation to maintain an action in the courts of this state are intended to be in furtherance of the collection of state revenue, we do not deem it necessary to consider technical matters of the manner of pleading such inability when the same was not suggested in any way to the trial court by the parties. The requested instructions not...