152 N.W. 690 | S.D. | 1915
On April 1, 1912, defendant executed and delivered to the United Mercantile Agency of Chicago eight notes of $2,500 each, due August 1, 1912. This action was brought to recover on a note dated August 1, 1912, which note was given as a renewal of one of the eight notes above mentioned, and was •indorsed to the plaintiff who claimed to be an innocent purchaser. Defendant admitted the execution of the note, but alleged that the note of April 1, 1912, which was the only consideration for the note in suit, was obtained from defendant without consideration and by fraud and deceit; that the United Mercantile' Agency offered to sell to defendant 250 shares of its capital stock at -the par value of $10 per share, and did,' in order to induce defendant to purchase the same and give said note therefore, to him represent that it was a live, going concern; that it had actual assets worth, on the market, over $2,000,000; that it was
Two issues of fact were thus presented at the trial: First, was there such fraud and misrepresentation in the inception of the note of such failure of consideration therefor as would defeat a recovery thereon, by the original payee; and second, were the plaintiffs innocent purchasers in due course, and for value before maturity?
It stands undisputed in the record that this note was indorsed and delivered to the plaintiffs before maturity, either in payment of, or as security for, an indebtedness of the original payee to the plaintiffs.
“ ‘Well, here is Mr. Tidrick from South Dakota. He knows Vessey is all right.’ He asked me if I knew Vessey. I said, ‘Yes; I know Vessey,’ and Early said Vessey’s note was good, and he says, ‘Here is another man from South Dakota; he is interested in the concern here, and we could turn you his notes,’ and I said, ‘You don’t turn any notes over, because I haven’t got any stock, and I am getting a little sore on this institution anyhow, and I don’t propose to pay them.’ ”
That this was addressed to> Mr. Miller and Mr. Early.
These statements were denied by both Miller and Early. The credibility of these witness, however, was a question for the
“Until they [the United' Mercantile Agency] delivered the stock to him, they have no claim on him at all. * * * The whole question, so far as that proposition is concerned, is: Did ■he get the stock it was understood he should have for the execution of this note? If he did not, of course there would be no valuable consideration.”
This instruction is assigned as error. If the plaintiffs are not innocent purchasers of the note, they stand in exactly the same position as would the United Mercantile Agency, if suing upon the notes. Appellant contends that the failure to deliver the stock is no defense to an action on the note, citing Columbia Electric Co. v. Dixon, 46 Minn. 463, 49 N. W. 244. That case held, in effect, that it was no defense to an action on a stock subscription that no certificate for the stock had been tendered. The ground upon which that decision rests is that a subscription for the stock of a corporation does not stand on the footing of a purchase of property; that, when the subscriber pays, he is the owner of the stock; that it is the payment which makes him a stockholder, the certificate being merely the evidence of his right.
But in the later case of Marson v. Deither, 49 Minn. 423, 52 N. W. 38, that court reviewing the Dixon case and other prior decisions, says:
“The rule, of course, has no application to the case of a sale of stock, which stands on the same footing as any other contract of purchase of property.” Summers v. Sleeth, 45 Ind. 598.
In the latter case the defendant gave a note to aid in the construction of a railroad, with an agreement that he should receive an equal amount of railroad stock. The court held that the payment of the money and the issuance of stock were dependent and concurrent acts, and that suit could not be maintained upon
“■'Sec. 1304. An agreement to sell and buy is a contract by which one engages to transfer the title to a certain thing to another, who engages to accept the same from him, and pay a price therefor.”
The contract appears to have been not merely for a purchase and sale of stock, but an express agreement for delivery of the certificates of stock.
“Unless a different intention appears, the following are the rules for ascertaining the intention of the parties as to the time at which the property in the goods is to; pass to the 'buyer. * * *
“Rule 5: If a contract to sell requires the seller to deliver the goods to the buyer, * * * the property does not pass until the goods have been delivered to the buyer or reached the place agreed upon.”
The same author (section 448) says:
“* * * It has already been shown that by the early lairs of England transfer of the property in the goods and payment of the price were presumably concurrent; and the modern view has been advocated that the implied condition relates rather to delivery than to ownership. In cases where the property does not pass until delivery, the condition in regard to delivery will, in effect, be also a condition in regard to the property. * * * Where the conditions are concurrent, it necessarily follows that neither party can maintain an action against the other for the breach of the latter’s obligation, without first making an offer of performance himself.”
The order and judgment of the trial court are therefore affirmed.