290 N.W. 82 | Iowa | 1940
The plaintiff, at the time of the transactions that generated this controversy, was a corporation doing an annual business of $400,000. James J. Doty was its president and manager. He owned 80 per cent of the stock. The remainder was held by Arthur B. Nye and F.P. Nye, secretary and treasurer respectively of the corporation. Defendant Aetna Life Insurance Company (hereinafter called the Aetna) was a foreign corporation. It had duly appointed A.G. Honett as agent for the transaction of its authorized life insurance business *1125
in Iowa. Honett, originally a defendant, died, and his administrator Paul Ferguson was substituted. On May 12, 1931, one of the regular forms furnished by the Aetna to its agents for use in taking applications for life insurance was brought to plaintiff's place of business in Shenandoah by the agent Honett. It comprised four pages and was in a partially completed condition. On the third page were questions the answers to which were to be made to and written in by the Aetna's medical examiner. On page 4 was a form for his report. On May 6, 1931, the medical examiner had met the requirements of page 3, by writing in the answers of Doty on whose life the insurance was to be written, and on the same day had made his medical report on page 4. After Honett's arrival at plaintiff's business place on May 12, 1931, a conference naturally ensued between him and Doty and the two Nyes, as the intended beneficiary of the proposed insurance was the plaintiff corporation, and the question of payment of the premium by the corporation was for Doty and the Nyes as its executive officers to decide. After ascertaining from Honett the amount of the premium and some other matters of detail the three officers of the corporation, according to their testimony, concluded that the proposed insurance should be applied for and that the corporation would pay the premium. Honett then wrote upon page 2 of the form answers to the questions there appearing and Doty attached his signature at the bottom of the page as the applicant for the insurance. The plaintiff corporation signed on the same page a statement that the premiums were to be paid from its funds. In the course of this transaction of May 12, according to plaintiff's witnesses, Honett stated that plaintiff had better prepay the premium as otherwise the insurance would not become effective on that date, and also stated that he thought the application "would go through" if the payment went in with it. There was also this further testimony; that Honett, addressing Doty and the Nyes, stated that they "could give us a check for so much money, something over five hundred dollars, and we can carry the rest by note;" that after some discussion plaintiff's officers decided to pay the premium in advance, and settled the matter with Honett by splitting the premium into a check for $526.50 and two notes for $450 each, due respectively October 1 and November 1, 1931, *1126
all payable to Honett, the aggregate being the amount of the first annual premium. When the conference ended Honett took away with him the check, notes, and application. The check was paid by the Des Moines bank on which it was drawn on May 15, 1931. During the next day, in Des Moines, Honett personally delivered the application to Martin L. Seltzer, the Aetna's general agent for Iowa, and at the same time turned over to Seltzer $
Plaintiff sought a decree cancelling the two notes as against all defendants, and a judgment against the Aetna and Honett for the amount of the $526.50 check with interest less the $
[1] Plaintiff-appellant's first proposition is that, instead of entering judgment on the $450 note on which Ross counterclaimed, the trial court should have decreed the note's cancellation. The reasoning of plaintiff is as follows: Section 9476 [§ 16], Code 1935, is to the effect that, "Every contract on a negotiable instrument is incomplete and revocable until delivery of the instrument for the purpose of giving effect thereto" and further provides that, "As between immediate parties, and as regards aremote party other than a holder in due course, the delivery, in order to be effectual, must be made either by or under the authority of the party making, drawing, accepting, or indorsing, as the case may be; and in such case the delivery may be shown to have been conditional or for a special purpose only, and not for the purpose of transferring the property in the instrument." Plaintiff also points to section 9515 [§ 55], Code 1935, providing that, "The title of a person who negotiates an instrument is defective within the meaning of this chapter when * * * he negotiates it in breach of faith, or under such circumstances as amount to a fraud." Plaintiff urges that under section 9515 Honett's title was defective when he negotiated the note to Cox; that the title of Cox rose no higher than the title of Honett because Cox had notice of all the facts on account of which there was an infirmity in the instrument and a defect in the title of the person negotiating the instrument. Having notice and knowledge of these facts, plaintiff urges that Cox can not say in avoidance that he was a holder in due course as defined in section 9512 [§ 52], Code 1935. Consequently, according to plaintiff, the contract on the note being still incomplete and revocable, it may be defensively shown, as between plaintiff and Cox and now his assignee Ross, (and according to plaintiff it has been shown) that the delivery of the note by plaintiff to Honett was conditional or for a specified purpose only, and not for the purpose of transferring the property in the instrument. We are of the opinion, in view of these statutes and the following authorities, that plaintiff's proposition is sound provided the plaintiff's evidence together with the conceded *1128
facts in the record establish the truth of the factual matters as plaintiff claims them to be. Anthon State Bank v. Bernard,
Ross contends that plaintiff's proposition is not sustained by the facts shown in the record. The claim is that the check and notes were delivered to Honett not for payment of the premium to the Aetna, but for "numerous purposes," in that, says Ross, Doty and the Nyes had "engaged" Honett to assist them in a "campaign" to obtain additional insurance on the life of Doty, and in that the check and notes were turned over to Honett to use in this "campaign" wherever the insurance might be obtained. In taking this position Ross relies on evidence to the effect that some years previously Doty had acquired several policies of insurance on his life through Honett whose business during all this period was that of an insurance agent. But in these instances Honett was acting as an insurance agent representing the companies that issued the policies, and that is all that is shown. Ross also points out that Honett was contacting other companies than the Aetna to ascertain whether a $50,000 policy could be procured from any of them, and was submitting to Doty their propositions if any. But all this falls far short of establishing that the check and notes were delivered to Honett for "numerous purposes" other than payment of premium on the Aetna policy. There is nothing in the way of testimony that the delivery of the check and notes was associated with any so-called "numerous purposes." On the contrary the delivery was made at the time the thing discussed and in all parties' minds was the application for an Aetna policy. To that alone the transaction pertained, and it was all one whole transaction of which the delivering of the check and notes was a definite part. It appears to us that the matters Ross affirms as facts are no more than unsustained surmises.
Ross further claims that Doty and plaintiff have made admissions that only $
That page 2 of the application was materially altered at some time after the transaction of May 12, 1931, without knowledge or consent of plaintiff or Doty, was clearly established on the trial. Beyond controversy, and admitted by the only one of defendant's witnesses who was examined on the subject, whatever Honett wrote on page 2 in answer to Question No. 2 was subsequently erased, and the word "Quarterly" that now appears was inserted. Plaintiff and Doty first acquired knowledge thereof after this controversy arose. With respect to the other claimed alteration, the inserting of "
[2] Plaintiff's second proposition is that the court erred in dismissing the petition as against the defendant administrator. The latter filed no brief. Examining the record we find he made objections to the competency of the witnesses Doty and the Nyes. Determining whether the administrator's cross-examination was such that he waived the objection is not needful because aside from the testimony of those witnesses the evidence clearly establishes Honett's liability for the unaccounted part of the $526.50 check and warrants a cancellation of the two $450 notes as against the administrator of his estate. The court erred in not according all that relief to plaintiff.
[3] Plaintiff's third proposition is that the dismissal of the petition as against the Aetna was erroneous in that, the Aetna through its agent having received the amount of the check, it is liable to plaintiff therefor, less the $
HAMILTON, C.J., and SAGER, STIGER, MITCHELL, HALE, and OLIVER, JJ., concur. *1131