39 N.W.2d 745 | Minn. | 1949
The appeal presents for decision the following questions:
(1) Whether the statutory presumption that a promissory note was issued for a valuable consideration persists after it has been shown by undisputed and uncontradicted evidence that the note was a "present" from the maker to the payee;
(2) Whether, where the evidence adduced by plaintiff conclusively shows that the defendant, maker of a promissory note, gave it to the plaintiff-payee as a gift, the court may decide the case upon such evidence without regard to the statutory presumption of consideration for the note;
(3) Whether something which otherwise might be a valuable consideration for a promissory note, but which the parties have not agreed should be such, is a consideration for the note; and
(4) Whether the maker's declarations at the time he gave the note to the payee and the latter accepted it that the note was a "present" may be rejected upon the ground that the maker was impeached as to moral character and veracity.
Defendant was the maker and plaintiff the payee of the note, which was for $5,000, dated August 18, 1937, recited "value received," and payable five years after date with interest at six percent. The answer alleged among other defenses those of want of consideration, nondelivery, and fraud by plaintiff in the procurement thereof from defendant. At the trial, defendant testified under cross-examination under the statute that he signed the note and that he had shown it to plaintiff, but had not delivered it to her. Plaintiff's counsel interrogated defendant as to whether he "gave" the note to her and whether he did "give" it to her. In answer to a question whether he had not testified upon another trial that he "gave" the note to her, defendant answered that he did not remember. His testimony at the former trial was not introduced in *410 evidence, and consequently the record does not show whot it was. Plaintiff and her sister testified that defendantgave the note to plaintiff as a "present." Their testimony was to the effect that on August 18, 1937, they and defendant were together on a street in St. Cloud; that he went to an office; and that, when he returned, he gave the note to plaintiff as a "present." Plaintiff testified that defendant said that it was a "gift" — that his words were that "it is a present for you [plaintiff]."
Plaintiff's testimony covered in detail the relations existing between her and defendant for several years. She was a widow. Defendant proposed marriage to her, but she declined because he then had a wife in Germany. After he obtained a divorce and before the note in question was given, the parties became engaged to marry, but did not do so. Plaintiff lived in Minneapolis and defendant in St. Cloud. He rented a room from her in her house for about five or six years at an agreed monthly rental of $15, which he did not pay. He kept some clothes and other personal property therein and occupied it during his Easter and Christmas vacations, some week ends, and on other occasions. In addition, defendant several times borrowed money from plaintiff which he did not repay. While he neither paid the room rent nor the loans, he gave her numerous gifts, consisting of a diamond engagement ring, a fur coat, a bicycle for her daughter, groceries, meats, and a stove. An optician whom they consulted assumed, with their acquiescence, that they were husband and wife. In 1933, defendant gave plaintiff a promissory note for $7,500 without consideration, for the purpose, as they intended, of protecting her in case he died before they got married. Later, plaintiff was unsuccessful in an action to recover on this note.
A few weeks after defendant gave plaintiff the $5,000 note dated August 18, 1937, she sewed the note on the inside of one of defendant's vest pockets for the purpose of enabling him, in case she died, to repossess the note by merely taking his vest. A short time after she sewed the note in defendant's vest pocket she removed the note therefrom and put it in her safe-deposit box in a St. Cloud bank. *411 During the existence of their relationship defendant requested plaintiff to have sexual relations with him, which she refused. He refused to marry her, although several times she requested him to keep his promise to do so. Finally, the relationship between the parties ceased, and plaintiff brought this action on the note.
Plaintiff in her testimony specifically disclaimed that the money loaned by her to defendant was a consideration for the note, but there was no inquiry, and hence no testimony, as to whether the preexisting promise of marriage, defendant's liability to plaintiff for room rent, or the inconvenience he had caused her were a consideration for it.
At the conclusion of the testimony on behalf of plaintiff both parties rested, and defendant then made a motion for a directed verdict upon the ground that it appeared as a matter of law that the note was given without consideration. The motion was granted upon the ground that the note was a "present" to plaintiff from defendant and, as such, was without consideration and unenforceable.
On the appeal, plaintiff contends that the trial court erred for the reasons: (1) That, as the case then stood, the statutory presumption of consideration for the note would have prevailed and thus have compelled decision in her favor, if the jury had rejected the only evidence to overcome the presumption — defendant's declarations that the note was a "present" — which plaintiff urges that the jury had a right to do, for the reasons that defendant, the declarant, had been impeached both as to moral character and veracity by the evidence that he wanted to have illicit sexual intercourse with plaintiff and that he was either untruthful or evasive as to his testimony upon the trial of the prior action; and (2) that, aside from any presumption, an actual consideration for the note was shown by the testimony to the effect that there was (a) a preëxisting promise of marriage, (b) an indebtedness to plaintiff for room rent and money loaned to him by her, and (c) inconvenience which he had caused her. Defendant contends that the evidence conclusively shows a gift, and that, because that is true, the note was as a matter of law without consideration, not only in *412 the respect plaintiff expressly disclaimed one, but in all respects.
The submission here has proceeded upon the assumptions, which correspondingly limit the scope of our decision, that as between the parties to a promissory note want of consideration is a defense (M.S.A. 335.134 [N. I. L. § 282]; Cemstone Products Co. v. Gersbach,
1. The language of § 335.13 (N. I. L. § 24) is:
"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."
The quoted section should be construed in connection with other provisions of the negotiable instruments law, including § 335.134 (N. I. L. § 28), which provides that as against a person not a holder in due course want of consideration is a defense. As between the payee and maker, want of consideration is a complete defense under the statute. Cemstone Products Co. v. Gersbach, supra. It is plain, therefore, that the legislative intent was that the "prima facie" presumption should be a rebuttable one, which should prevail only in the absence of evidence showing the facts with respect to the matter.
The nature of the statutory presumption of consideration for a promissory note and the role it plays in litigation is the same as other rebuttable presumptions of fact. Our rules relative to these *413
matters have been stated in a series of cases beginning with Ryan v. Metropolitan L. Ins. Co.
While a recital in the note that it was given for "value received" in itself imports a consideration, such language yields to the facts shown by the evidence. Dougherty v. Salt,
The uncontradicted and undisputed testimony that defendant gave the note to plaintiff as a "present" shows that the note lacked consideration. The law is well settled that a gift is a transfer of property without consideration. Botchford v. Commr. Int. Rev. (9 Cir.)
2. Where the evidence on behalf of plaintiff conclusively shows want of consideration as a matter of law, the statutory presumption of consideration raises no fact issue with respect to the matter for decision by the trier of fact. In such a situation, the question for decision is one of law for the court, to be determined without regard to any presumption operative in the decision of questions of fact, including the statutory one of consideration for a promissory note. In re Estate of Brown,
3. The consideration for a promise, whether it be some benefit accruing to one party or some detriment suffered by the other (see, Estrada v. Hanson,
"* * * Many things may constitute the consideration for a contract. It is the fact that they are the intended consideration that imports them into a contract."
As applied here, while under § 335.131 (N. I. L. § 25), (see, DeWolf v. Johnson,
"* * * The fortuitous presence in a transaction of some possibility of detriment, latent but unthought of, is not enough * * *. Promisor and promisee must have dealt with it as the inducement to the promise * * *." *416
4. Plaintiff would by a rule of evidence which permits a declarant, whether his declarations are admissions or part of the res gestae, to be impeached the same as a witness testifying in court (see, Ammundson v. Falk,
Acceptance of a gift should estop the donee from asserting that the transfer was some other sort of transaction. We so hold. It is elementary law that one who, either intentionally or through culpable negligence by silence when he ought to speak or by his acts and representations, induces another to believe that certain facts exist is estopped to deny the existence of such facts where to do so would prejudice the other party. Dimond v. Manheim,
As applied here, it appears conclusively from the evidence adduced by plaintiff that defendant made a gift of the note to her and that she accepted it as such. It can make no difference so far as these facts are concerned whether he was of good moral character or of doubtful veracity. A person of bad moral character and questionable veracity has a right to dispose of his property upon such terms as he may determine. There is no dispute as to what defendant said; what the terms of the transfer of the note to plaintiff were. Her acceptance of the gift was according to the terms thereof — that is, as of a gift as such. Thereby, she renounced any right which she otherwise may have had to repudiate the gift and to assert rights inconsistent therewith. Her claim that the transaction was not a gift of the note, but rather the execution and delivery of a note for a valuable consideration, is inconsistent with the terms of the gift, which she accepted, and the rights which she thereby renounced, for the reason that acceptance of the gift was one of an unenforceable promise to pay, and the claim that the *418 note was given for a valuable consideration is one that the promise was an enforceable one to pay. Having accepted the note as a gift, she is estopped to assert that it was given for a consideration.
Our conclusion is that it appeared as a matter of law that defendant gave the note to plaintiff as a gift; that when that fact was so established the statutory presumption of consideration for the note ceased to be operative; that, while there were things that might have been a consideration for the note, they were not such because the parties did not so regard them; that, regardless of defendant's moral character or veracity, plaintiff was estopped to assert rights inconsistent with those implicit in her acceptance of the note as a gift; and that defendant was entitled to judgment.
Affirmed.