130 P. 774 | Utah | 1913
Respondent brought this action in equity to foreclose a real estate mortgage of $2750 and interest from March 28, 1902, and to recover a judgment on another note of $1341 and interest. Both notes were signed by appellant Moon, and were payable to respondent. They together represent a single transaction.
The complaint, in two counts — the first on the note and mortgage, and the second on the other note — was in the usual form. Moon, answering, averred that the only consideration for the notes was an illegal one growing out of a gambling transaction between him and respondent. He set up' with much detail the particulars of the claim, which briefly stated, is in effect as follows: Between February 28 and March 15, 1902, Moon, for the purpose of gambling with Hudson on the future market price of Daly,West Mining Company stock, and without any intention on the part of
The court made findings in favor of respondent in conformity with the allegations of his complaint and the reply, and entered judgment and decreed a foreclosure accordingly. Moon appeals. He assails the findings.
This being an equity case, and the appeal being on questions of both law and fact, it is important at the outset to determine whether respondent or Moon had the burden of proof with respect to the consideration of the notes. Each
1 “Every negotiable instrument is deemed prima facie to have been issued for a valuable consideration, and every person whose signature appears thereon to have become a party thereto for value.”
[Respondent urged that “there can be no question but what the burden of proof of establishing the illegal consideration under the issues of the case were upon the defendant.” But the authorities cited by him (1 Ency. PL & Pr. 84S; 31 Cye. 678) to not go to this extent. They only are to the effect generally that, where a defense proceeds by way of confession and avoidance, the burden as to such defense is upon the defendant. Respondent further argues in his brief:
“And the defendant is only entitled to rely upon those defenses set forth in his answer; therefore, if the plaintiff in the case by all the evidence introduced shows by a preponderance of the evidence substantially the consideration alleged in the complaint and reply, then he is entitled to recover in this -action, unless defendant proves by the preponderance of the evidence the truth of the allegations set forth in the answer, to wit, that the consideration was an illegal one as growing out of a gambling transaction.”
Just what respondent means by this is not clear. While he has asserted that on the issue of consideration the defendant has the burden, yet he, in effect, seems to concede that the plaintiff has the burden to show the consideration as alleged by him in the complaint and reply, and, if he does so show it by a preponderance of “all the evidence introduced,” he is entitled to prevail, unless the defendant by “the preponderance of evidence” proved an illegal consideration. Thus, according to this notion, the plaintiff has the burden to prove the consideration as alleged by him in his ■complaint and reply, and the defendant to prove it as he alleged it in his answer. This apparently on the assump^ tion that the defense of consideration pleaded here is not
“And in this connection it is but proper to remark that, if the plaintiff in the case by a preponderance of the evidence supported the allegations of the complaint and reply, in the very nature of things, the defendant must fail in ■establishing by a preponderance of the evidence the allegations of the answer.”
Certainly; for, if the respondent by a preponderance of all the evidence supported his allegations of consideration as alleged by him in his complaint and reply, it is somewhat difficult to perceive how the appellant’s allegations of consideration could also be supported by a preponderance of the evidence. But by this confession the respondent has destroyed his claim that the defense of consideration as pleaded was new and affirmative matter, and not merely in denial of or inconsistent with respondent’s allegations.
Appellant insists that the respondent having alleged a particular consideration for the notes, and the appellant that there was no consideration except an illegal one, a gambling transaction, such defense is not new matter by way of confession and avoidance, but is in denial of respondent’s allegations because inconsistent therewith; and hence that the burden of proof in the first instance was upon and continued to remain with the respondent.
In this ease it was not necessary for respondent to allege the specific consideration, because, under the statute referred to by him, a consideration was implied from the negotiable quality of the notes sued on. But it seems that when such a particular allegation is made it must be proved
“While the burden of proof in an action upon a promissory note, as between the original parties, is upon the promisee to establish the fact that it was given for a valuable consideration, the production of the note and proof of the defendant’s signature establish a prima facie case which entitles the plaintiff to a verdict. But the burden of proving a consideration still remains upon the plaintiff, notwithstanding the presumption, and, if there is any evidence in the case on this point on behalf of the defendant, the plaintiff must show, by a preponderance of the whole evidence, that the note was given for a valuable consideration. (Citing cases.) Where a party having the burden has given competent prima facie evidence of consideration, and the adverse party seeks to meet it, not by producing proof that would negative this proposition, but by establishing another and distinct proposition, the burden is upon him. Thus, if the defendant should seek to meet the prima fade case made by the production of the note by evidence of payment, the burden would be upon him to show it. . . . But evidence on behalf of the defendant may distinctly meet and tend to disprove the evidence of consideration of the plaintiff, even if it also tends to establish an entirely different state of facts from that on which the plaintiff seeks to base his proof of consideration. In such case the effect of proof of consideration by the plaintiff is not avoided, but is met and encountered; and, even if the evidence of the defendant tends to establish a different proposition from that asserted by the plaintiff, it is still for the plaintiff to sustain the burden which rests upon him of proving the consideration, and not for the defendant to show that it does not exist, by satisfying the jury that his own proposition is correct.”
In Huntington v. Shade, 180 Mass. 371, 62 N. E. 380, 91 Am. St. Rep. 309, that court again said:
*383 “The rule is well settled in this commonwealth that, in an action on a promissory note, the burden of proof is upon the plaintiff to establish the fact that it is given for a valuable consideration. While the production of the note, with the admission of proof of the signature, malees a prima facie case, yet if the defendant puts in evidence of a want of consideration, the burden of proof dues not shift, but remains upon the plaintiff, who must satisfy the jury, by a fair preponderance of the evidence, that the note was for a valuable consideration.”
Tbe same proposition is also well stated and well reasoned in Delano v. Bartlett, 6 Cush. (Mass.) 364. In tbe ease of Atlas Bank v. Doyle, 9 R. I. 76, 98 Am. Dec. 368, 11 Am. Rep. 219, tbe court said:
“The burden of proof is indeed on the plaintiff to prove a valuable consideration, but by presenting the paper he makes a prima facie case; that is, a case sufficient to justify a verdict for him if the defendant does not rebut it. But, if the defendant does produce evidence to rebut this presumption, the burden is still on the plaintiff, taking all the testimony together, to show a valuable consideration by a preponderance of the evidence on his side.”
Tbe following cases are also to tbe same effect: Search v. Miller, 9 Neb. 26, 1 N. W. 975; Clark v. Hills, 67 Tex. 141, 2 S. W. 356; Gutta Percha, etc., Co. v. City of Cleburne (Tex. Civ. App.), 107 S. W. 157; Small v. Clewley, 62 Me. 155, 16 Am. Rep. 410; Goodenough v. Huff, 53 Vt. 482; Manistee Nat. Bank v. Seymour, 64 Mich. 59, 31 N. W. 140; Bogie v. Nolan, 96 Mo. 85, 9 S. W. 14; Campbell v. McCormac, 90 N. C. 491; Conmey v. Macfarlane, 97 Pa. 361; Best v. Rocky Mt., etc., Bank, 37 Colo. 149, 85 Pac. 1124, 7 L. R. A. (N. S.) 1035; F. L. & T. Co. v. Siefke, 144 N. Y. 354, 39 N. E. 358; Smith v. Sac County, 11 Wall. 139, 20 L. Ed. 102. And in principle to tbe same effect are Leavitt v. Thurston, 38 Utah, 351, 113 Pac. 77; Scott v. Wood, 81 Cal. 398, 22 Pac. 871; 1 Daniel Neg. Inst. 164; 4 Wig. Ev. sec. 2493.
Respondent bas cited no case or authority wbicb makes against these authorities. He bas only cited 1 Pl. & Pr. 848, and 31 Cyc. 678. But they are to tbe point that tbe burden is on tbe defendant on pleas of payment or other affirmative
In the case at bar the evidence of both parties was directed to the single question of the consideration 'of the notes. There was nowhere in the appellant’s pleadings or evidence anything by way of confession and avoidance of respondent’s claim of consideration. And from what we have said it follows that the burden of proof is on the respondent to satisfy the court by a preponderance of the evidence, nor only that there was a valuable consideration for the notes, but that the consideration was as alleged by him.
Now, plaintiff does not claim that he had any authority whatever or any order to close any of these deals prior to March 28th; and it does not appear that ¿here was any sub
“I bought the stock on the board and curb, and in Boston and I think in Michigan, along about the 28th of the month, and part of that stock had cost' me less than the market value on March 28th. I also bought some on the market of March 28th, how much I don’t remember. When Mr. Moon came in i-n the evening of March 28th, I told him about the stock that I had, and consented to let Mm have the two hundred shares to cover his short sale at $42.25, which was below the market value, and very satisfactory to Mr. Moon at that time. I-knew that Mr. Moon had made a very serious loss, and' I had repeatedly tried to get him to cover his stock, but he would not do it. He thought the market would go down again, and after it was found out what the trouble was, then everybody was clamoring for stock, and he was anxious to close his account. Q. What did he say in substance upon that? A. He was owing me the two hundred shares of stock, and I consented to let him in' at $42.25. Q. When you say he was owing you two hundred shares of stock, what do you mean? A. I mean he was owing on those contracts two hundred shares of stock, for which I was liable to others, and had to deliver, and he consented to accept the stocks I had bought that day, and close his account at the basis of $42.25 a share, so that I could use this stock to make the deliveries on the contract.”
The evidence on behalf of the respondent further shows that he was speculating in Daly West stock, buying and selling for himself as well as for others, and speculated on the difference between the Boston and the local market of such stock. Had the stock depreciated, as Moon anticipated it would, and had it depreciated say one-half, instead of advancing its full value as it did, Moon by reason of his agent’s conduct, would have been entirely deprived of his profit; for, had the stock depreciated within the thirty days to five dollars or eight dollars, and had Moon tendered it,
So, under the issues, the respondent was required to show what he alleged, that he, as Moon’s agent, sold the stock short, and, as his agent, on or about March 28th, on his order purchased and delivered the stock to those to whom he had theretofore sold it, and that the sale and purchase resulted in the loss claimed. This, as has been seen, he failed to do,
We have thus reviewed the case on respondent’s evidence, and on his theory of the ease, and on the theory of the legality of the transaction. Let us now look at the case from the appellant’s theory, that of an illegal transaction.
“Salt Lake City, Utah, March 1, 1902. I have this day sold to Chaides E. Hudson one hundred (100) shares of the. capital stock of the Daly West Mining Co. at Park*391 City, Utah, $19.60 per share, seller thirty (30) days, according to the by-laws of the Salt Lake Stock and Mining Exchange. Certified checks for the necessary twenty per cent, of the purchase price are deposited in escrow with-by each party to this contract, the terms and conditions of which are hereby acknowledged and accepted. A. T. Moon, Seller. Charles E, Hudson, Buyer. Reverse. March 20, 1902. Deposit as margin, two hundred dollars.”
Exhibit E is similar, except the date, which is March 15th, and the price $18.70, instead of $19.60. It is upon all sides conceded that these documents refer to the transactions in question. That is conceded by the respondent himself. They are consistent with the appellant’s theory, and are inconsistent with the respondent’s. They on their face show the relation of the respondent and Moon in the transaction to be that of seller and buyer and not of agency. And the record, without dispute, shows that as between them no stock was in fact delivered, and a fair inference that no stock was intended to be delivered, and the undisputed fact —the most prominent one in the case — is that a settlement was made, not by a delivery of :any stock, but merely by computing' the difference between the contract price as evidenced by Exhibits D and E and the market price of the stock on March 28th, for which the notes in suit were given. So, whether the respondent’s or the appellant’s theory of the case be adopted, it is dear the respondent on neither is entitled to prevail.
Our conclusion therefore is that the judgment of the court below should be reversed and the case remanded with directions that the findings and judgment be vacated; that