Murphy v. Dunning

DIXON, C. J. Tbe point that no authority was shown from [299] tbe board of directors to tbe president and secretary of tbe railroad company to transfer tbe note and mortgage, came np by way of objection to tbe introduction of tbe bond of assignment and transfer, wben offered in evidence by tbe plaintiffs. It is urged, that a resolution of tbe board of directors, or some other competent authority from them to tbe president and secretary to mate tbe assignment of tbe note and mortgage, should have been shown, before tbe instrument was admissible in evidence. Assuming that such authority was necessary, and that tbe president and secretary could not sell or transfer without, we are, nevertheless, of opinion, upon tbe pleadings, that tbe objection was not open to tbe defendants, or that they bad waived it by tbe form and mode of denial in then’ answer. Tbe complaint charged a sale, assignment and delivery of tbe note and mortgage to tbe plaintiffs by the railroad company. This was in legal effect averring a valid assignment, or one made in due form of law under tbe authority of tbe company. Tbe answer was in these words: “ And defendants further say, that they are informed and believe, and, therefore, allege tbe fact to be, that said railroad company never, at any time, endorsed over said note to said plaintiffs, or to any other person or persons whomsoever, by writing its name upon the said note for that purpose, and said defendants further allege, that said railroad company expressly refused, and at all times has refused to endorse said note, or to do or perform any other act or thing to malee, or which should mate said note negotiable; all of which was well known to said plaintiffs at tbe time of said pretended transfer to them of said mortgage.” This was clearly no denial of tbe authority of tbe president and secretary of tbe company to make tbe assignment. It was no denial that tbe note and mortgage bad, in fact, been assigned by tbe company as charged in the complaint. It was evidently not intended as a denial of tbe fact of assignment, or of tbe authority of tbe officers by whom it was made, but by necessary implication admitted tbe existence of both. It was only intended as a denial, that tbe [300] company “ endorsed” tbe note “by writing its name upon the said note for that purpose,” which fact, in the judgment of the pleader, was deemed necessary to “ make said note negotiable.” It was merely a denial of the negotiation and transfer of the note in that particular form. The cases of Crosby v. Roub, 16 Wis., 616, and Banger v. Flint, 25 Wis., 544, show that the transfer of the note and mortgage in form, as made, which was by attachment to the negotiable bond of the company, which recited that they were transferred as security for, and should be transferable only in connection with the bond, was an indorsement of the note, within the law merchant. If the defendants had intended to raise any question, as to the authority of the president and secretary to make the transfer, so as to require the plaintiffs to show the authority on trial, they should have made such intention known by their pleadings, either by putting the fact distinctly in issue by answer, or at least by a general denial of the facts alleged in the complaint. The answer; if not in words, certainly by inference, admitted the transfer and delivery as alleged in the complaint, and took no issue as to their regularity or validity, except as above stated. It contained no general or specific denial, but only matters in avoidance. The court below found as facts: “ Eirst. That each and all of the facts and circumstances stated in the complaint herein, are true as therein stated, and are proven by the plaintiffs. Second. That all the facts and circumstances and allegations contained in the amended answer of the defendants, William H. Dunning and Jessie M. Dunning, are untrue in fact, and are wholly unproven.” A careful examination of the testimony has failed to convince us that there was such error in the finding of the court with respect to the alleged false and fraudulent representations by means of which the defendants, Dunning and wife, assert and claim that they were induced to, and did execute and deliver the note and mortgage, as will justify us in reversing the judg [301] ment on that ground. The testimony is such as, upon fair consideration, will not, in our opinion, authorize a reversal of the finding of the .circuit judge in this particular, and an opposite determination and finding of fact by this court upon the same evidence. The court below found as fact that the allegations of the answer in respect of the fraud were untrue and wholly unproven. To justify the reversal of a finding of fact, on appeal to this court, there should, in any case, be a fair preponderance, or at least some preponderance, of evidence against such finding. And in a case circumstanced lite the present, where the defense is fraud and misrepresentation in the procurement of the execution of the note and mortgage, which is like a bill in equity to rescind the same on that ground, and in which it must be shown that the party repudiated immediately on discovery of the fraud, and moved diligently for the rescission ; and where, also, as appears by the record, the defendants delayed, without any good cause assigned, for the period of ten years and upwards, after the execution and delivery of the note and mortgage, and until after they had been transferred to the plaintiffs, who claim and testify that they are holders in good faith for value without notice, and then, upon the institution of this action by the plaintiffs, for the first time bring forward the objection — in a case so circumstanced we say, we think, to authorize a reversal of the finding of the court below, that the preponderance of evidence against such finding should be very clear and decided. The demand or right to rescind a contráct on the ground of fraudulent misrepresentation or concealment, even when unaccompanied by any circumstances of suspicion like those arising from long and unexplained delay to complain or prosecute or otherwise, is one which must in 'all cases be clearly and satisfactorily established in proof. It is analogous to the case where the object is to turn a deed absolute on its face into a mortgage, or to reform a written instrument on the ground of mistake, and requires nearly, if not the same degree and kind of evidence. See Kent v. Lasley, 24 Wis., 654, and [302] cases there cited, and McClellan v. Sandford, 26 Wis., 607. In tbe present case tbe testimony to establish the alleged false and fraudulent representations was solely that of the defendant, William H. Dunning himself. No other testimony was offered or given by the defendants in support of that part of the defense. Opposed to his testimony was that of the witness, Eorbes, the agent of the railroad company, who, Dunning testified, made the representations. Forbes flatly and unqualifiedly contradicted every statement made by Dunning, and negatived every allegation of the answer in respect to the false misrepresentations. He was not impeached or otherwise contradicted than by Dunning. He appears to have been a man of fair intelligence, of considerable property, accustomed to business, and of good character in the community, equally with Mr. Dunning. Nothing was shown against the good name or character of either, and the testimony of each, by itself considered, seems fair and credible on the face of the record. Dunning was interested; Eorbes was not. Now while we need not and do not say that a defense of the kind here presented, may not, or ought not, under any circumstances, to be established by the testimony of the defendant alone, and while also we are not required and do not say that the defendant Dunning testified falsely, for we impute nothing of the kind to him, yet we must say upon the record as shown to us, that we cannot reverse the finding and decision of the circuit judge, that no false or fraudulent representations were in fact made in the procurement of the execution of the note and mortgage, On the contrary, we think we are in duty bound, under the circumstances, to affirm such finding and decision, and,- that being affirmed, it follows that the whole judgment must be, regardless of the question whether the plaintiffs had or had not notice of the alleged defense, at the time they purchased and took an assignment for value of the note and mortgage. By the Court — The judgment of the circuit court is accordingly affirmed.