71 P. 87 | Cal. | 1902
The action is on a promissory note executed by defendants, payable to the order of one George R. Eaton, bearing date November 1, 1895, due one year from date, for $5,000, and purporting to bear interest from date until paid at the rate of three per cent per month. It is alleged in the complaint that on August 6, 1896, Eaton, the payee, indorsed, sold and assigned said note to R. C. Hopkins for value, and that thereafter said Hopkins, “and prior
Appellant concedes that the testimony is in conflict as to the partial failure of the consideration, settlement of the note as alleged in the answer, and the alteration as alleged. It is contended, however, that there is no evidence whatever to support finding 2. This finding is that Baton did not, on August 6, 1895, or at any time prior to the maturity of the note, assign it to Hopkins for value at all, nor did Hopkins assign it to plaintiff before the commencement of the action for value at all, nor did Baton indorse the note to anyone prior to its maturity, and plaintiff did not become the holder until after maturity. This finding in some respects depends upon testimony which appellant claims was improperly admitted in evidence, and this point will first be disposed of.
Plaintiff testified in his own behalf. He was shown the note, and testified that he brought the suit at the request of Mr. Schooler (plaintiff’s attorney); that he had not received any payment on the note, and so far as he knew it had not been paid; that the note had not been in his possession; that it was assigned to him by Mr. Eaton; and added, “I think it was before the maturity of the note.” On cross-examination he testified that the note was assigned to him for collection by Baton in Mr. Schooler’s office in San Francisco. “The note was not delivered to me. I did not see it at that time. Mr. Baton assigned it to me for collection just for the use of my name to sue on. I don’t know how long that was before the beginning of the suit. It' was possibly a few days or a week.” (The complaint was filed July 24, 1897, nearly nine months after the note had matured.) He was asked to “state what was said by Mr. Eaton, Mr.
Witness was the plaintiff in the case. In a verified complaint he had alleged the indorsement and transfer of the note by the payee, Baton, to Hopkins before maturity, for value, and the indorsement to him for value before the commencement of the action. He testified in chief that the note was assigned to him by Baton before its maturity; that he had not received payment, and so far as he knew it had not been paid; that the note had not been in his possession. This testimony tended to establish a prima facie case for plaintiff, and went to the material issues presented by the complaint. We think it was proper for defendants, on cross-examination, to go to the bottom of this witness’ connection with the note, and draw from him all he knew about it, even though the facts within his knowledge might tend to prove the allegations set up in defense. Defendants had the right to show facts by this witness which would dispute his
Fisher Ames testified that he had been attorney for Mrs. Bell, and was her attorney at the time the matters occurred concerning which he testified, but that he was not Eaton’s attorney. His testimony was not objected to at the trial, but because Eaton testified that Ames was his attorney it is now urged that the evidence was incompetent. This contention cannot be maintained, if for no other reason than that the evidence is in conflict as to the fact of the alleged rela- . tion of attorney and client, and the lower court accepted the testimony of Mr. Ames. He testified to some important facts bearing upon finding 2. He testified that he was not Mr. Eaton’s attorney; that he saw the note in question about the middle of November, 1895; “at that time it bore no interest. .... I next saw the note in July, 1897, and at that time it bore three per cent interest per month.....It was not indorsed. ' Q. Not indorsed by either of the names that are upon it now? A. Neither of the names were upon it at that time.” On cross-examination he testified that Eaton showed him the note in witness’ office about the middle of July, 1897, at which time he testified it bore no indorsement. This was long after the maturity of the note, shortly before the suit was brought, and it was then in Eaton’s possession. It is not necessary to pursue the evidence at length. The remaining findings are not now attacked, and there is enough, in the testimony of plaintiff and Ames, without resort to the testimony of defendants (which is quite explicit in support of the findings), to justify finding 2. Section 3123 of the Civil Code provides: “An indorsee in due course is one who, in the ordinary course of business, and for value, before its apparent maturity or presumptive dishonor, and without knowledge of its actual dishonor, acquires a negotiable instrument duly indorsed to him, or indorsed generally, or payable to bearer.” The evidence in the case was sufficient to support the finding that the note was not in
There is evidence to support the finding that the consideration for the note was services to be performed by Baton, the payee, and also that he failed to perform all the services agreed to be performed by him. There is sufficient evidence also to support the finding that the note was altered in the particulars claimed in the answer, without the knowledge or consent of the makers, at some time after it was delivered to Baton, and that this alteration was made before the alleged transfer to Hopkins. There is also evidence sufficient to support the finding that on December 31, 1896, Baton received $1,500 in payment of his said services, which constituted the consideration for the note. On these points the evidence was either in conflict or sustained the findings without conflict, and, as we understand appellant, he concedes that under the rule the facts cannot be inquired into here. It is claimed, however, that the note was transferred to Hopkins before maturity for value and without notice of any infirmity. The claim that there was at most but a partial failure of consideration by reason of Baton’s not performing service for the full term agreed upon is found adversely to appellant on sufficient evidence which tended to show that Baton and Mrs. Bell had an agreement by which he was to surrender the note in consideration of the payment of $1,500 to him by Mrs. Bell. But it is said that this agreement was entered into after the transfer of the note to Hopkins. There is evidence that the note was not indorsed by the payee or the indorsee until just before the complaint was filed, and that it did not pass from Baton to anyone by indorsement before maturity. Conceding that he transferred the note to Hopkins in August, 1896, it was at most but an equitable assignment, and did not shut out the
When the note was executed it bore no interest, and the contemporaneous agreement shows that it was not intended to bear interest, at least until the year’s services were performed, which constituted its consideration (Civ. Code, sec. 1917); and respondent urges that by section 1700 of the same code the intentional alteration of the note was in a material particular, and extinguished “all the executory obligations of the contract” in favor of the payee against the makers who did not consent to the alteration. We are cited to Walsh v. Hunt, 120 Cal. 46, 39 L. R. A. 697, 52 Pac. 115, where it was said that “any unauthorized change in a material respect destroys the integrity of the instrument as the contract which the maker has executed; it ceases to be his contract, and is avoided, even in the hands of an innocent holder for value”; and the principle applies as well to commercial paper—citing cases. If the alteration was material this fiction of the law, now invoked, could not be used to override the salutary rule enunciated in Walsh v. Hunt, supra. But if it be true, as is claimed by appellant, that the alteration was not material, and would not affect the validity of the note in the hands of an innocent holder (citing Fisher v. Dennis, 6 Cal. 577, 65 Am. Dec. 534; Visher v. Webster, 8 Cal. 112; and First Nat. Bank v. Wolff, 79 Cal. 69, 21 Pac. 551, 748), the fact remains that the note was not “duly indorsed!” to Hopkins or plaintiff “before its apparent maturity,” and neither Hopkins nor plaintiff was “an indorsee in due course” (Civ. Code, sec. 3123), and defendants could plead their equitable defense.
The judgment and order should be affirmed.
We concur: Gray, C.; Haynes, C.
PER CURIAM.—For the reasons given in the foregoing opinion the order appealed from is affirmed.