Pelton v. Spider Lake Sawmill & Lumber Co.

132 Wis. 219 | Wis. | 1907

MaRshaxu, J.

This case having been here on appeal from a former judgment (see Pelton v. Spider Lake S. & L. Co. 117 Wis. 569, 94 N. W. 293), when many of the questions in relation to respondent’s liability on the notes were settled, it is not deemed advisable to discuss any but the new questions raised, at least to any considerable length.

Counsel for appellants assign thirty-one errors, but many of them are of such a character as to require but a brief mention because of the former decision or the state of the record, •and some none at all because they are not discussed, suggesting the reasons supposed to exist why the rulings involved were prejudicial. The latter will be passed over without mention, and the others will be discussed in the order which seems most logical under the circumstances, and without referring to them in all their details, such reference not being deemed necessary to a decision of the case.

The court was justified in changing the answer to the first question from “Tes” to “No” because the evidence is all one way; that while the corporation owned the blanks with the signature'of Humphrey &-Holdridge affixed thereto, it had no concern in filling them or with the paper in its completed form. At best for the plaintiff the corporation merely consented to the use of the blanks by Hathway so far as the vice-president had any authority in the matter and that, even, as indicated in the statement, was controverted. The mere ownership' of the blanks did not constitute ownership of the notes as legal obligations on its part to pay.

The court was warranted in changing the answer to the second question as there was no evidence that the corporation specially authorized Hathway to use its credit, and it was ruled on the former appeal that without such special authority the corporation was not bound by his act to any person charged with notice of such want of authority. The mere consent of one of the officers of a corporation that another officer may do an act requiring special corporate authority, manifestly, does not constitute any legitimate basis for the doing of such act.

Willoughby & Hathway being factors and guarantors of payment for the lumber sold and liable to remit at the end of each month for that sold during such month they became indebted to appellants as fast as lumber was disposed of for the sale price thereof less their commissions. They recognized that relation when the first note was sent to appellants. The consideration therefor as regards the latter was a mere extension of the time of payment of so much of the Willoughby & Hathway indebtedness as was covered by the note. By the finding of the jury and the evidence it is a' verity in the case that when the note was given it was solely on account of such indebtedness, and, therefore, as regards the maker of the note it was at best purely accommodation paper.

It is suggested that as the acceptance of the paper involved an extension of the time of payment, as before indicated, it was supported by sufficient consideration under sec. 1675 — 51, ch. 356, Laws of 1899, to bind Humphrey & Holdridge notwithstanding it was given for the pre-existing debt of Wil-loughby & Hathway, and to bind the corporation to which Humphrey & Holdridge had intrusted the signed blanks, and, therefore, when the second note was given to take up the first it canceled the latter liability, creating a new one of the same nature of the corporation to Humphrey & Holdridge, which was likewise canceled, a new one of like nature being created when the notes in suit were given, and so the corporation in fact received a consideration for the latter notes. That argument is ingenious hut we are unable to see sufficient merit in it to warrant any extended discussion thereof. The authorities cited by the learned counsel do not seem to hear out their contention. It is regarded as a sufficient answer to such contention that the corporation did not mate the in-dorsement on the second note or those on the last notes, or turn out the paper in either case upon its own or any other liability. If it, recognizing a liability, had discharged the same in the manner suggested the case might be different. As it stands, the giving of the paper with the corporate in-dorsement in form thereon was wholly unauthorized. The wrongful use of the paper, falsely purporting to represent a corporate liability, as' to one having knowledge of the facts or who was reasonably put on guard in respect thereto, manifestly, would not bind the corporation. So the verdict is fully sustained that the corporation received no consideration for the notes in suit, they being merely the last of a series of renewals. They go back to and depend upon the first note, which was given, as we have seen, solely for the indebtedness of Willoughby & Hathway or, more correctly speaking, as collateral thereto.

On the former appeal it was supposed that the first note was indorsed by respondent but not in the chain of title from the makers to appellants, and so it was held that such an in-dorsement was notice, of itself, that the paper might be, as regards respondent, for accommodation only, putting the appellants on inquiry in respect thereto. It seems logical to hold all the more, appellants were put on inquiry as to the real character of the notes in suit, since they knew that the person who assumed to indorse them in the name of the cor.poration was its treasurer and that the use made thereof was solely for his advantage and that of his partner. A treasurer of a corporation has no authority ear officio to give corporate notes or to obligate the corporation on commercial paper, though true, if the usage of the corporation is to the contrary and it receives the proceeds it will he hound. 1 Rand. Comm. Paper (2d ed.) § 371. But that does not help in this ease, as the corporation did not receive any benefit from the notes indorsed in its name. According to the verdict of the jury and the evidence, as we have seen, the notes have no' other basis than the liability of Willoughby & Hathway, and as they were taken by appellants with knowledge that Hathway was the treasurer of the corporation and that he assumed to use its name and credit in his private affairs they were put upon inqrriry in respect to his authority so to do, and, therefore, cannot he held to have come by the paper bona, fide so as to bind the corporation. It could only he hound under the circumstances, as held on the former appeal, by showing special authority for Hathway to make the paper as he did, or that the corporation received the consideration for the notes, both of which matters are negatived by the verdict. This is deemed to he amply supported by the authorities cited by counsel for respondent. Germania S. V. & T. Co. v. Boynton, 71 Fed. 797, 19 C. C. A. 118; Farmers’ L. & T. Co. v. Fidelity T. Co. 86 Fed. 541, 30 C. C. A. 247; Park Hotel Co. v. Fourth Nat. Bank, 86 Fed. 742, 30 C. C. A. 409; McLellan v. Detroit F. Works, 56 Mich. 579, 23 N. W. 321; Merchants’ Nat. Bank v. Detroit K. & C. Works, 68 Mich. 620, 36 N. W. 696; West St. Louis Sav. Bank v. Shawnee Co. Bank, 95 U. S. 557.

Appellants’ counsel refer to Hiawatha I. Co. v. John Strange P. Co. 106 Wis. 111, 81 N. W. 1034, as limiting the foregoing rule to a situation where the paper, under the circumstances, irresistibly, suggests want of authority to utter it. We do not understand any such rule is laid down in that case. There was no occasion for there considering :such a question, as the holder of the paper received the same by indorsement before maturity and for value from tbe first taker. The latter had knowledge of the infirmity in the paper-but his indorsee had no such notice — an entirely different situation from th.e one we have here. There the paper was-held by a purchaser in good faith because such purchaser had no knowledge that the paper was used for the individual benefit of the corporate officer. Here, as we have seen, plaintiffs-were otherwise situated. They cannot be held to have taken the paper in good faith since — though they knew that Hath-way used the corporate obligation for his own benefit, making the indorsement on the paper to enable him to do so- — they made no inquiry as to his authority, yet such inquiry would have disclosed the fact that the corporation had no legal connection with the transaction.

Complaint is made because the court instructed the jury-that the burden of proof, generally, was upon the plaintiffs-That instruction was substantially correct. There was an issue on the pleadings as to whether the indorsements on the-notes were those of the corporation. Appellants were put to-their proof on that point. It appearing that the consideration for the notes was solely the individual indebtedness of Willoughby & Hathway and that appellants took the paper-under such circumstances as to be put on inquiry as to the corporate connection with the matter, they were put to their-proof as to whether the papers in the beginning belonged to. the corporation, and as to whether Hathway had any authority to make the papers and use them as he did. That covers all the questions really controverted on the evidence-which were submitted to the jury, except those as to whether-respondent received any consideration for the notes, as to. which the jury were instructed the burden of proof was upon the defendant. It is by no means clear but that the burden of proof on that branch of the case was really on appellants.

Complaint is made because the court said in the presence-of the jury: “Everybody seems to have been very tired of Mr. Hathway before they got through with him.” Some important questions turned largely on .the credibility of Hath-way’s evidence, and if the learned court had made the remark quoted, in his charge, as claimed, an exception thereto would challenge serious attention. Counsel for respondent insists that the remark was not made in the charge, but was addressed to counsel during conversation between court and counsel while the charge was being settled, in respect to which side presented Hathway as a witness. It is considered that such contention is supported by the record. Without going into particulars for the purpose of demonstrating the matter we so hold. Therefore, the error in making the remark must be deemed waived because not excepted to when made. It has often been held that prejudicial remarks in the course of a trial by court or counsel not seasonably excepted to cannot be regarded as harmful error. Vass v. Waukesha, 90 Wis. 337, 63 N. W. 280; Heucke v. Milwaukee City R. Co. 69 Wis. 401, 34 N. W. 243; Mulcairns v. Janesville, 67 Wis. 24, 29 N. W. 565. The same rule applies to such matters as to the offer of improper evidence. Unless excepted to at the time, generally speaking, the incident is deemed waived. 8 Ency. Pl. & Pr. 215. It does not appear that when the remark complained of was made, under the circumstances of the occurrence, counsel for appellants regarded it of sufficient importance to require the court’s attention to be called to its; probable prejudicial effect, and so it happened that they later excepted thereto as a part of the charge, though the record shows that after the remark was made and considerable was said by the court to counsel in respect to the law of the case “The court then read his charge to the jury.”

Complaint is made because the court made some remarks; to the jury on the subject of the impeachment of witnesses, the claim being that it was suggested that Hathway had. been impeached. The only language on the subject "which was included in the charge seems to be this:

“It is the rule that a party who offers the evidence of a witness holds out such witness to be a credible witness; he may, however, introduce evidence tending to show that the testimony of such witness (although offered by him) is not true, by the testimony of any other witness or witnesses, if he sees fit, but such party who offers the testimony of a witness in his behalf cannot, under the law, impeach the testimony of the witness so offered by him.”

It may be that the instruction was entirely unnecessary; that there was no effort in the case to impeach any witness directly, but we are unable to see that the quoted language jointed specially to Hathway. The court in addressing coun¡sel before the charge was given made some statements, regarded as improperly excepted to as part of the instructions, wherein the evidence of Smeaton was spoken of in connection with that of Hathway as having been subject to impeachment by the party adverse to the one presenting the witness, if such party had evidence competent therefor. It were better to have omitted the whole subject from the charge, under the circumstances, but we are unable to see any reasonable probability of appellants having been prejudiced by the contrary course. True, as claimed, it is error to give instructions not applicable to the case, but not always harmful error. It is the latter only when the adverse party may probably have been prejudiced by the instruction. Sec. 2829, Stats. (1898), applies:

“The court' shall, in' every stage of an action, disregard any error or defect in the pleadings or proceedings which shall not affect the substantial rights of the adverse party; and no judgment shall be reversed or affected by reason of such error or defect.”

That is as applicable to errors in instructions as' to others occurring in the course of a trial. Jackson v. State, 91 Wis. 253, 267, 64 N. W. 838; Williams v. Hechle, 95 Wis. 510, 512, 70 N. W. 556.

The court gave this to the jury on the burden of proof:

“Where the burden of proof rests upon a party, you cannot find an answer favorable to such party, unless the-truth of the propositions involved in such question has been affirmatively established, nor unless you are satisfied by the evidence that the fact exists, and by a preponderance of the proof. If, in weighing the evidence, you find the testimony equally balanced, and of course if the evidence of the party on whom the burden of proof rests does not outweigh that of the other party, you must answer the question against the party on whom the burden of proof rests.”

It is claimed that such language violates the rule that a party on whom the burden of proof rests to establish the existence of a fact must do more, to entitle him to a finding in respect thereto, than to produce a preponderance of evidence tending to establish it; that he must produce.such preponderance of evidence and it must he of such probative force as to satisfy or convince the jury of his contention, as said in Anderson v. Chicago B. Co. 127 Wis. 273, 106 N. W. 1077; satisfy the jury to a reasonable certainty of the existence of the fact, as said in Pelitier v. C., St. P., M. & O. R. Co. 88 Wis. 521, 60 N. W. 250; Guinard v. Knapp, Stout & Co. Co. 95 Wis. 482, 70 N. W. 671, and other cases.

While the language used by the learned court is not altogether accurate, it does not seem that it may probably have been understood by the jury as suggested. The court said as part of the instruction, as will be seen, You must be “satisfied by the evidence that the fact exists, and by a preponderance of the proof.” The other language used in connection therewith did not materially impair the meaning thereof, which fairly expressed the correct rule. Mere want of precision in an instruction is not harmful error, except in connection with the refusal of a requested more definite instruction. Murphy v. Martin, 58 Wis. 276, 16 N. W. 603.

Counsel for. respondent was .permitted to ask Hatkway on cross-examination this question: “Do you know anything about such a check.” That followed an examination, which was not objected to', respecting some trouble between the vice-president of the respondent and the witness before the latter severed his relations with the company and thereafter, in which the improper use of a check purporting to have been signed by respondent was suggested. The witness answered thus: “I know something about it.” He was then permitted without objection to testify at length in respect to the check transaction in which he negatived all wrong in the matter. Conceding for the purpose of the discussion that the subject was entirely irrelevant we are unable to see how appellants were prejudiced by the ruling made. If there were any prejudice it was from the general examination in respect to the check which was not objected to.

Portions of the charge are pointed to as not having anything to do with the questions the jury were called upon to decide. We shall not refer to them in detail. It is not claimed that they were prejudicial, and if it were otherwise we are unable to discover any probable harm. The mere giving of instructions not applicable to the case does not constitute harmful error. Ward v. Henry, 19 Wis. 76, relied upon by appellants’ counsel, is in harmony with this. The court there remarked:

“The mere irrelevancy of instructions given by the court to the jury is said in itself, independent of all other considerations, not to' be a sufficient ground to authorize a new trial; but where injustice has been done by the verdict,, and it is probable the. jury were misled by the instructions, then we think a new trial should be granted.”

Further complaint is made because, as it is said, the court told the jury, “The defendant has paid said Willoughby & Hathway for all lumber.” We are unable to find that language in the charge, except in this paragraph:

“The evidence of the defendant tends to show that it is not indebted to the firm of Willoughby & Hathway, and that for any and all transactions which passed between the defendant and Willoughby & Hathway the defendant has paid said Willoughby & Hathway in full thereof, while the evidence of the plaintiffs, and especially the testimony of the said Hathway, tends to show that there is an indebtedness still existing from the defendant to the firm of Willoughby & Hathway.”

It is improper to separate a sentence in a charge from its connection and except thereto when such sentence standing alone conveys a very different meaning from that indicated by the instruction as a whole.

The jury were instructed, in effect, as to several issues covered by the questions, that the evidence of the plaintiffs tended to prove one thing, specifying it, and the evidence of defendant to prove the contrary. We see no serious error in that, if error at all. The only justification for submitting an issue to the jury was that just the situation suggested existed, i. e. that there was a controversy between the parties upon the evidence in respect thereto. The court did not say to the jury, as one would suppose by looking at the assignments of error, merely that “the evidence of the defendant tends to show that defendant has paid for all lumber and lath which it purchased from said firm of Willoughby & Hathway.” There was no such singling out of the evidence on one side and giving thereto special prominence. The quoted language was used in connection with this in the same sentence: “While the evidence of the plaintiffs, and especially the testimony of the said Hathway, tends to show that there is an indebtedness still existing from the defendant to the firm of Willoughby & Hathway.” That is an example of several instances where a sentence or part of a sentence seems to Rave teen separated from its eomiectioris and excepted to when the whole is plainly free from error.

There is no other question which seems worthy of special mention. The case without harmful error indicates that Hathway used the notes in question to apply on the individual indebtedness of himself and partner,' under such circumstances as to put appellants upon inquiry as to his authority so to do; that he had no such authority, and that the notes were, as regards the corporation, wholly without consideration. The decision should be viewed as strictly restrained to the facts of the case. It is not to be taken as an approval of all that is said in the Park Hotel Case (86 Fed. 742, 30 C. C. A. 409) cited. The holding is this: Where a person takes from another, for that other’s personal liability or on account thereof, the obligation upon commercial paper of a corporation in which such other is an officer of a character not ordinarily intrusted with the duty of making such obligations, the instrument being his handiwork, and such person knows his connection with the corporation, such person is put upon inquiry as to the real character of the paper and the authority of such other to use the name of the corporation in the transaction.

By the Court. — The judgment is affirmed.

Case Details

Case Name: Pelton v. Spider Lake Sawmill & Lumber Co.

Court Name: Wisconsin Supreme Court

Date Published: May 21, 1907

Citation: 132 Wis. 219

Court Abbreviation: Wis.