4 S.D. 593 | S.D. | 1894
This was an action predicated upon a promissory note for $190.82, executed by the defendant N. E. String-ham to the plaintiff D.’M. Osborne & Co., and guarantied by the defendant A. J. Stringham. Defendants, by their answer, admit both the execution of the note and the guaranty, but allege, in substance, that prior to the execution and delivery of the note the plaintiff and defendant N. E. Stringham entered into an agreement in writing, whereby the said N. E. Stringham, in consideration of certain commissions' and compensations therein specified, became the agent of plaintiff to sell certain farm machinery and other property of that nature. That from time to time said agreement was modified by the parties thereto; that the last of such modifications was made on or about July 11, 1887, whereby, in consideration that the said N. E. Stringham would continue in said agency, and in order to meet certain competition in said business, the plaintiff promised and agreed to furnish said N. E. Stringham all such
This case, under a state of facts substantially the same, has been once decided by this court, and the law of that case, so far as applicable, is conclusive upon the parties, and is the law of the case. Bank v. Gilman (S. D.) 52 N. W. 869, and cases there cited. The issuance of a receipt upon taking a promissory note in settlement of an existing debt, or as evidence of a loan is'unusual, and generally unnecessary; and, in case such receipt' is ambiguous and uncertain, and it becomes necessary to construe it in order to determine the rights of the parties, the language of the instrument should be interpreted most strongly against the party who caused the uncertainty to
Counsel for respondent urges that the word “due”, as used in the receipt taken at the time the note was given, refers to an indebtedness the amount of which had already been determined and agreed upon, and that the term “collateral”, as it there appears, has no signification. While the word “due” in its ordinary meaning and legal acceptance, when applied to indebtedness, relates to the time when payment is enforceable, yet the word nevertheless admits of a broader meaning; and from an examination of the sentence in which it appears in the receipt offered in evidence we may safely conclude that the word was not used in its restricted sense. “Collateral security,” in bank phraseology means some security additional to the personal obligation of the borrower; and when a debtor delivers to his creditor an evidence of indebtedness, with the intention that it become additional security for his personal existing obligation, it becomes merely concurrent security, and is designed only to increase the means of the creditor to realize the principal debt which it is given to secure. In the case before us we are inclined to believe that the element of uncertainty enters into the receipt, and that the intention of the parties that the note be given and held as collateral to such balance as might be found due on settlement is not repugnant to the recitals of the paper, and that parol evidence is admissible and competent to explain the nature of the transaction. Comp. Laws § 3562; Smith v. Holland, 61 N. Y. 635; McClelland v. James, 33 Iowa 571; D. M. Osborne & Co. v. Stringham, (S. D.) 47 N. W. 408, and cases there cited. We think it was error to hold that the evidence offered on the part of the defendants to support the allegations of their answer was immaterial, and to direct a verdict for the full amount claimed in favor of the plaintiff. The judgment of the circuit court is therefore reversed, and the cause remanded for a new trial.