Waukee Sav. Bank v. Jones
| Decision Date | 28 October 1916 |
| Docket Number | No. 31064.,31064. |
| Citation | 179 Iowa 261,159 N.W. 691 |
| Parties | WAUKEE SAV. BANK v. JONES. |
| Court | Iowa Supreme Court |
OPINION TEXT STARTS HERE
Appeal from District Court, Dallas County; W. H. Fahey, Judge.
Action upon a promissory note for $1,784, dated June 21, 1913, by its terms due January 1, 1914. The note was executed by defendant and payable to the Star Land Company. It was indorsed in blank before maturity by the payee and discounted by plaintiff bank. There was a trial to a jury, and, verdict and judgment for defendant. Plaintiff appeals. Affirmed.Dale & Harvison, of Des Moines, and D. H. Miller, of Adel, for appellant.
Dingwell & Clarke, of Adel, for appellee.
The petition sets out a copy of the note, and alleges its execution June 21, 1913, and alleges, further that thereafter, and long prior to the maturity of said note, the plaintiff discounted said note, and the same was duly assigned, transferred, and delivered to it by indorsement thereof; that plaintiff now is and at all times since the discount thereof has been, the owner and holder of said note.
The answer was in three counts. The first alleges, substantially, that the note sued on is one of four notes provided for in a written contract for a deed for land, which, togetherwith a contemporaneous verbal contract, constituted the entire transaction between this defendant and the Star Land Company; that the said note has never been legally delivered to the said Star Land Company for the reason that it was agreed by and between defendant and said land company that the note was turned over to the land company by defendant wholly upon the condition that defendant was to have until September 1, 1913, to determine whether or not the delivery of the said note should be completed, and whether or not the transfer of the note should be absolute; that it was verbally agreed by and between defendant and the land company that the transfer of the note to the land company by defendant was not for the purpose of transferring the property in the note, and that the note should be subject to revocation by defendant for any reason on or before the 1st day of September, 1913, and more particularly, that it was to be subject to revocation by defendant if defendant should be unable to procure a certain sum of money specified by him in the verbal agreement before September 1, 1913; that defendant was unable to obtain the sum of money specified and prior to September 1, 1913, he notified the land company that he would not complete the contract, and notified it of his intention to revoke the same, and requested that the note be delivered to him for cancellation, but that the company refused to comply with his request. Defendant further alleges that, in violation of the agreement made in parol, the said Star Land Company transferred the said note to plaintiff herein in fraud of defendant's rights as agreed upon in the parol agreement herein specified. Count 2 alleges in detail false and fraudulent representations made to defendant by the Star Land Company before the note was signed. and to induce him to sign the same, which would be a complete defense to the note in the hands of the land company and in the hands of plaintiff, unless plaintiff was an innocent holder. The third count alleges that the written contract for the sale of the land provided that it was made subject to the disapproval of the owner of the land, and that if the owner should disapprove, then the contract should be null and void, and in which event all payments and notes were to be returned to the purchaser, and defendant alleged that because of the said contract being subject to the disapproval of the owner, there was a failure of consideration, and then alleges that the cashier of plaintiff bank, before obtaining the note in question, had knowledge of the conditions under which the note was signed, and was informed of the fact that defendant did not intend to carry out said contract and pay the note, and was informed by defendant of the verbal part of the contract before set out, and knew of the infirmities and conditions attached to the instrument, and was informed by defendant that he had been unable to procure the sum of money specified, and that he had demanded the return of the note; that plaintiff bank obtained the note without paying value for it, and was not a good-faith purchaser and was not a bona fide holder thereof, and did not obtain the note in due course. Defendant prayed that the petition be dismissed, and that the note be held to be void and delivered to defendant for cancellation.
Plaintiff filed no reply to the answer. The errors assigned relate to the instruction by which it is claimed by plaintiff that the court withdrew counts 2 and 3 of the answer without withdrawing the evidence which had been introduced in support thereof, and the instruction in regard to notice to the bank of the defense set up by defendant, and that the court erred in admitting evidence over plaintiff's objection. We shall endeavor to take up the different propositions in the order of importance as indicated by the arguments rather than in the order in which they have been argued.
1. As before indicated, it was claimed by defendant that the contract between defendant and the land company was partly in writing and partly by a contemporaneous oral contract, and that the parol part of the contract was, substantially, that the note was delivered upon condition that the defendant would be able to raise money by September 1, 1913, and that he was unable to obtain the money; that the land company negotiated the note to plaintiff in fraud of defendant's rights. There was evidence introduced over plaintiff's objection which sustained the defendant's claim and authorized the jury to so find, if the evidence is competent.
It is contended by plaintiff that the note is a plain, complete, and unambiguous contract, containing an unqualified promise to pay, and that the parol testimony is a contradiction of the note and therefore incompetent. There is no question, of course, as to the general rule that parol testimony is not admissible to vary or contradict the terms of a writing. Plaintiff cites: Miller v. Morine, 167 Iowa, 287, 149 N. W. 229;Blumer v. Schmidt, 164 Iowa, 683, 146 N. W. 751;Cochran v. Zachery, 137 Iowa, 585, 115 N. W. 486, 16 L. R. A. (N. S.) 235, 126 Am. St. Rep. 307, 15 Ann. Cas. 297;Mosnat v. Uchytil, 129 Iowa, 274, 105 N. W. 519;Western Electric Co. v. Baerthel, 127 Iowa, 467, 103 N. W. 475. We shall not review these cases, but content ourselves with stating that these were all cases where the parol testimony sought to be introduced contradicted or varied the terms of the writing, or added to, or took from, or specifically changed the terms of the writing. On the other hand, it is contended by appellee that a parol contemporaneous agreement may be proven in connection with a written contract if it does not vary the terms of a writing, and that there may be a conditional delivery of a note as alleged in this case, and that such condition may be shown by parol. To sustain these propositions, they cite: Section 3060a16, Code Supp.; Larson v. Seguin, 34 S. D. 453, 149 N. W. 174;Oakland Cem. Ass'n v. Lakins, 126 Iowa, 121, 101 N. W. 778, 3 Ann. Cas. 559;McCormick Machine Co. v. Morlan, 121 Iowa, 451, 96 N. W. 976;Bank v. Harlan, 167 Iowa, 673, 149 N. W. 883;Murdy v. Skyles, 101 Iowa, 549, 70 N. W. 714, 63 Am. St. Rep. 411; 9 Enc. of Ev. 353. See, also, Hinsdale v. McCune, 135 Iowa, 682, 113 N. W. 478.
Appellee also contends that because the delivery of the note was conditional a subsequent transfer in violation of the condition would be a good defense as against the payee, and, that defense being shown, the burden is on the holder of the note to show that he has acquired the instrument in due course, citing Bank v. Carter, 144 Iowa, 715, 123 N. W. 237;Cox v. Cline, 139 Iowa, 128, 117 N. W. 48;Merchants' Bank v. Grigsby, 170 Iowa, 675, 149 N. W. 626;Hinkley v. Oil Co., 132 Iowa, 396, 107 N. W. 629, 119 Am. St. Rep. 564. And they say, also, that the burden was upon appellant holder of the note, tainted with fraud in its inception, to show that it was a bona fide holder in due course, without notice of the defects or infirmities. Bank v. Shaffer, 147 N. W. 851;Bank v. Buck Bros., 161 Iowa, 362, 142 N. W. 1004;McNight v. Parsons, 136 Iowa, 390, 113 N. W. 858, 125 Am. St. Rep. 265, 22 L. R. A. (N. S.) 718, 15 Ann. Cas. 665.
[1] As said, appellee introduced testimony to sustain his...
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