97 Mo. App. 305 | Mo. Ct. App. | 1902
— Plaintiff brought this action by a petition in the ordinary form upon a promissory note, expressed to be for value received, whereby defendant promised to pay to plaintiffs or bearer, November 1, 1899, $400, with interest, etc. The note was dated Kansas City, Missouri, October 23, 1896.
The answer of defendant admits the execution of the note, alleges that it was given “without any consideration whatever,” and then sets up a special defense to the effect that plaintiffs conveyed to defendant a certain tract of land to be sold for them by him and that defendant executed to plaintiff a note for $400, secured by a deed of trust on the land, neither deed nor note to be binding unless the land was sold, which it was not; and that when the note became due and the land remained unsold, defendant tendered back to plaintiffs the deed to said land, which they refused to accept, but foreclosed the deed of trust, and recovered the land.
Plaintiffs introduced the note with indorsements showing that a credit of $25 had been given defendant on the note by the last foreclosure sale of the land to plaintiffs, June 25, 1900.
Defendant was then sworn on his own behalf. Plaintiffs objected to any evidence by him on the ground that he sought to contradict the written instrument by parol evidence, and that the statute of frauds was a bar on the ground that the note was not to be performed within a year and hence that any oral modifications or additions thereto must be shown in writing. These objections were made preliminary to any testimony of the defendant.
The substance of defendant’s testimony is that he had been a loan agent for Holmes & Company of Kansas City, and that they afterwards became Holmes Brothers. He had made a loan upon some land (120 acres) near Richland, Missouri. The loan becoming-due the mortgage was foreclosed, and Mr. Ed. Holmes-in consequence bought in the land at the sale. Mr.. Holmes complained that the loan had been a bad one, whereupon plaintiff said that he thought that the land, was easily worth the debt. Mr. Holmes then desired defendant to take it for the debt. Defendant declined, to do so, but said he would try to sell it for them. ' It. was then agreed between Mr. Holmes and defendant, that the land should be “deeded” to- the defendant and the latter would give to plaintiffs the note in suit, secured by deed of trust on the land. It is to be inferred, that this would be the purchase price in event of a real sale; and meanwhile defendant was to pay interest, to plaintiffs at six per cent per annum while the note ran, namely for three years. This he did and he also-paid the taxes for the same period. In case the land was sold the note was to become effective but if it was not sold then plaintiff was to make no claim on account of" the principal thereof.
But in the progress of the trial, and against the earnest objection and repeated exception of counsel for plaintiffs, the defendant was permitted to state that it was a part of the agreement that the note should not be paid,, in case the land was not ultimately sold.
Plaintiffs put in evidence all the documents appertaining to the original transaction, including a quitclaim deed to defendant and his deed of trust to their trustee, securing the said note.
No other contradiction of defendant’s version of the affair was given in evidence.
No instructions were asken or given on either side.
The trial court found for the defendant and plaintiffs appealed, after the usual formalities.
“Whenever a specialty or other written contract for the payment of money, or the delivery of property, or for the performance of a duty, shall be the foundation*310 of an action or defense in whole or in part, or shall he given in evidence in any court without being pleaded, the proper party may prove the want or failure of the consideration, in whole or in part, of such specialty or other written contract.” R. S. 1899, sec. 645; R. S. 1845, ch. 136, sec. 21.
It is competent for a maker of a note as against the payee to show that there was no consideration in whole or in part for the instrument sued upon, with a Mew either to defeat or to reduce the recovery claimed thereon, as the case may be.
Upon the facts disclosed by this record we are of opinion that there was testimony from which a court might reasonably find there was a failure of consideration for the paper which was the foundation of the action. Chicago Title & Trust Co. v. Brady, 165 Mo. 197 (65 S. W. Rep. 303). At the same time we hold that several items of eMdence which the court admitted conflicted with the principle of law declared in the first paragraph of this opinion.
We can not know what weight or influence the court gave to the incompetent facts which were so gleaned from defendant as a witness at the last trial.
It is now a settled doctrine of our procedure that where error appears it is presumed to be prejudicial unless the appellate court can clearly see that it was harmless. State v. Taylor, 118 Mo. 153.
The learned trial judge sat as a jury in this case. As he permitted the incompetent facts aforesaid to be given in eMdence, it is fair to assume that he gave weight to those facts in forming his judgment.
Where an appellate court has lawful authority to pass upon the facts on appeal it may discard incompetent eMdence and pronounce its conclusion upon the legal testimony remaining, as is often done in equity cases. Padley v. Neill, 134 Mo. 375; Supreme Lodge v. Schworm, 80 Mo. App. (St. L.) 64.
But this is an action at law. We can not be sure that the incompetent testimony was disregarded by the
The recital of value received, as the consideration of a note such” as that in suit, may. be disputed (under the Missouri law quoted) by proof, otherwise competent. But evidence of an agreement by which a note is not to be paid according to its tenor and terms is incompetent to support a plea of want of consideration.
There is no plea or contention by defendant of any fraud as a defense. So the items of defendant’s own testimony as to agreements contradicting the note and its promise to pay, were clearly inadmissible.
If there is a consideration for the note then such an agreement would be wholly nugatory. If, on the other hand, the note was without consideration (or the consideration failed) the agreement that the note should not be payable would add nothing to the inference of the law from that fact.
The burden of proof was upon defendant to establish by a preponderance of the evidence the want of consideration he alleged. The trial court found in his favor on that issue, but did so after admitting'into the scales of justice the items of testimony which we find were not entitled to a place there. What weight was given to those incompetent items of proof we may not know. We can not justly pronounce their admission harmless. Bank v. Froman, 129 Mo. 427; Shoe Co. v. Hillig, 70 Mo. App. (St. L.) 309.
The judgment is reversed and the cause remanded for a new trial.
— It is competent as between the payee and' maker of a negotiable promissory note to prove by oral testimony, want or failure of consideration. Sec. 645, R. S. 1899; Cheatham v. Hill, 29 Mo. 311; Howard v. Brown, 23 Mo. App. (K. C.) 69; Chicago Title & Trust Co. v. Brady, 165 Mo. l. c. 208. And for the purpose of showing want or failure of consideration it is competent to prove the contract out of which the note grew. Chicago Title & Trust Co. v. Brady, supra; Leighton v. Bowen, 75 Me. 504; Coal & Iron Co. v. Willing, 180 Pa. 165; Gale v. Harp, 64 Ark. 462; Juilliard v. Chaffee, 92 N. Y. 529; Shoe & Leather Nat. Bk. v. Wood, 142 Mass. 563; Trustees v. Hoffman, 95 Mo. App. 488.
The answer of defendant is as follows
“1. Now comes the defendant, and for his answer to plaintiffs’ petition, admits that he executed the note sued on.
“2. Defendant, further answering, says that said note was given without any consideration whatever and is now in the hands of the original payees, who are the plaintiffs, and that there is nothing due on said note.
“3. Defendant, further answering, states to the court that plaintiffs conveyed to him a certain tract of land for him, the defendant, to sell for plaintiffs, and the amount for which plaintiff had taken said land on a loan debt, was $400, and that this defendant executed the note sued on'for said sum of $400, and gave a deed of trust on said land. That neither the deed to defendant nor the note to plaintiffs were to be binding on the parties, unless this defendant succeeded in selling said land, which he failed to do. That when said note became due, defendant tendered plaintiffs a deed to said land without any cost, which they refused to accept, but incurred an expense of $50 in such foreclosure, and charges the same to defendant, which is unjust, and was wholly unnecessary. That plaintiffs have recovered*313 said land, and lost nothing by this defendant, and he owes them nothing.
“4. Defendant denies every act and every allegation in said petition not herein specifically admitted, and having fully answered asks to be discharged with costs. ’ ’
Had defendant stopped with the second paragraph of his answer we think-he might have shown'the contract out of which the note grew, if the contract proved or tended to prove want of consideration for the note.
The third paragraph is a statement in detail of the facts of the transaction and alleges “that neither the deed to defendant nor the note to plaintiffs were to be binding on the parties, unless this defendant succeeded in selling said land, which he failed to do. ’ ’ In other words, it is alleged that the note was to be paid only on the happening of a contingency. It is well-settled law in this State that oral evidence is not admissible for the purpose of proving that a negotiable promissory note, absolute on its face,, was to be paid cn the happening of any contingency. Jones v. Jeffries, 17 Mo. 577; Foote v. Newell, 29 Mo. 400; Massmann v. Holscher et al., 49 Mo. 87; Conrad v. Howard, 89 Mo. 127; Henshaw v. Dutton, 59 Mo. 139; Henshaw v. Dutton, 67 Mo. 666; Jones v. Shaw, 67 Mo. 667; Hurt v. Ford, 142 Mo. 283; Ins. Co. v. Buchalter, 83 Mo. App. (K. C.) 504; Barnard State Bank v. Fesler, 89 Mo. App. (K. C.) 217.
By the third paragraph of his answer the defendant has so qualified his defense, “that the note was given without any consideration,” as to show affirmatively that what he means by want of consideration is that the note was not to be paid unless he succeeded in selling the land, that is, the note was to be paid only on the happening of a contingency, and that the contingency upon which the note was to become payable has not happened.
The third paragraph of the answer negatives the plea of want of consideration for the note and discloses that the defense relied upon by defendant was.that the
The motion to modify the opinion heretofore filed is overruled and the judgment is reversed and cause remanded with leave to defendant to amend his answer if so advised.