Muschelwicz v. Tidrick

WHITING, P. J. Defendant subscribed for some stock in the United Mercantile Agenlcy ('hereinafter denlolminated “agency”)' and1, at the time cif subscribing, and' in consideration for same, be gave to .said agency eight promissory notes oif $2,500 each', dated' April, x, 1912. These notes falling due, they were renewed by the giving of eight notes of $2,500 each, dated August 1, 19123 and1 these renewal note's falling due,, they in turn were renewed by the giving of eight notes of $2,500 each, dated November x, 1912. It Was upon one of the renewal note® of 'date August 1, 1912, that the action of Barnard v. Tidrick, the appeal in whiialxl isi reported in 35 S. D. 403, 152 N. W. 690, wias brought. We make reference to our opinion therein for a s/tatamient of 'fact’s many of which are common to both cases. Two :olf the original notes were inidbrsedi to the West Hammond Trust & Savings Bank (hereinafter denominated! “bank”) which bad received said notes in 'exchange for other notes which they had purchased from.' the agency exactly a® the plaintiffs in the Barnard action had received one of the August 1st notes in exchange for the note -elf another party, which note they had purchased fnoinai said agenlcy. The defenses pleaded' in this action were, as in the Barnard action, no consideration for, and fraud In the inception of, Mae original notes given by defendant. In the- Biamaird action the jury found1 with the defendant, while in this action, on evidence quite similar toi that in the Barnard action, the jury found floir the plaintiff. From' a judgment on suich verdict and an order denying a new trial, this appeal was taken. Upon this appeal no question iis raised but that the evi [439] den-ce was sufficient to 'support tíre verdict, provided it shows that the respondent was authorized toi bring toe action. Other toan-an assignment -raising such question, thie assignments ail go either to the 'correctness- of toe-court’s rulings in the receipt and; rejection of evidence, or to toe correctness olf instructions given toe jury. [1] It (appears undisputeid that the respondent w'as, ait all times hereinbefore mentioned', toe cashier ’ of the blank; that the notes in question were indorsed by toie hank and' delivered to him for toe sede-purpose of bringing. this action; toat he'has no personal financial' interest in saidl notes; and! that the proceeds* thereof ilf Collected will go entirely to the bank. Appellant contends that, under these facts; it appears that toe respondent is not toe real parity in interest anld as such 'authorized, under our statute, to maintain this' action. It has, however, been, for 20 year®, toe .settled law 'cif this state that a party who merely holds a note ifor collection, is yet autoorized to bring action thereon where toe legal title to said note stands in him'. Citizens’ Bank v. Corkings, 9 S. D. 614, 70 N. W. 1059, 62 Am. St. Rep. 891. [2] Respondent testified in relation to toe transactions by which toe bank became to'e owner of toe nloites in' exchange for which toe original Tidrick notes were taken from the agency. He also testified to toe transaction® in relation to the taking of toe original Tidrick note's and to'e several renewial notes. Ira connection with his testimony there were offered 'and received in evidence certain entries in toe books of the bank, iwhiicih entries respondent testified! were ¿0 his handwriting. These entries related to toe transactions concerning which respondent bad testified. These entries were objected to -upon toe grounds: (a) That they were .self-serving in their mature; (b) that toe witness appeared to have full -recollection -of toe transactions, -anld therefore did not need such entries for tole purpose of refreshing his memory; and (c) that such entries were hearsay soi far as the defendant was concerned. That such entries were not hearsay is too 'dear to need any further discussion, than to suggest toat they derived! their value as evidence froto to'e orediit to! be attached to toe witness who was upon -the stand and did nlot rest, even in part, on toe veracity of ©Otoe other person. Jones on Evidence, § 297. Certainly these entries cannot be beld' to be self440 serving if they are otherwise admissible. We are o'f tine opinion that tliese entries were more than mere memoranda; that they were entries !in the hooks df the bank made in the regular and usual eciurse of business and admissible as such. Jones on Evidence, § 320. No objdabicin was interposed upon the gron'ud that no proper foundation bad- ¡been laid for their receipt in evidence. [3] But if we consider these entries as but memoranda, then it is clear that, if -respondent (when a witness had testified that he had no- independent recollection of the several transactions, and had ’further testified that, even after examining these entries, he still' had ño 'independent recollection 'cif- the transaction, but did know that such entries were a correct record thereof, and were made at a time when he had a true recollection thereof, we would have before us a case where the entries would be the record of ia past recollection, and, -aisi such, admissible in evidence under ' the rule announced in Maupin v. Mcbridge State Bank, 38 S. D. 331, 161 N. W. 332; State v. Brady, 100 Iowa, 191, 69 N. W. 290, 36 L. R. A. 693, 62 Am. St. Rep. 560. Bran the fact that these entries were original and not hearsay evidence, which certainly ¡strengthens rather than decreases their probative force, and from ¡the fact that .the ‘witness testified, apparently -of his own recollection, as to the transactions, thus leaving these entries as corroborating evidence instead of the sole evidence of the facts, as they would have been if .the witness- had bad no present recollection of the facts, we can see nlo sound reason requiring uis, /while oomlcediinig their admissibility, if merely records of past recollections, to hlollld them inadmissible under the facts shown. Tio so hold would result i-n excluding them when the danger of their bearing false witness has been- reduced to the minimum;. It iseemis ¡clear to uis, and -we think it must to every thinking person, that such entries might well fttmi-sh far more satisfactory evidence in relation to the details- of a transaction Icing past than woiullld the memory of any witness, howsoever accurate and clear such memory might seem to be. Moreover, we do not believe it would promote the due administration oif justice to establish a rule which- would encourage a- -witness, who -did have an independent recollection of a-transaction, to commit -perjury in order to ipave the way for the admission of a memorandum’ as the record of a past recollection no>w forgotten, being induced! to such [441] perjury ¡because hie recognized' that such a memorandum would carry mare weight with the jury than Ms claim of accurate recollection unsupported by the corroborating proof furnished by such memorandum. The following from Insurance Co. v. Weide, 14 Wall. (81 U. S.) 380, 20 L. Ed. 894, is peculiarly applicable to the facts of this case: “How far papers, not evidence per se, bulfc proved to have been triue statements of fact, at the time they were made, are admissible in connection with the testimony of a witness whio maide them, has been a 'frequent subject olf inquiry, and it has' many times been decided that they are to be received1. And why should they mot be? Quantities and values, are retained in the memory with great difficulty. If at the time when an1 entry of aggregate quantities or values was made, the witness knew it was correct, it is hard1 to see why it is mot alb least as reliable as .is -the memory of the witness.” We would also call particular attention to the case of State v. Rule, 11 Okl. Or. 237, 144 Pac. 810. Eor reasons stated in the opinion therein, we believe these entries admissible either as entries made in regular course 'of business, or as memoranda corroborating the evidence of respondent. [4] The court admitted, over objection, evidence of transactions between appellant and a certain- 'third party. Appellant .contends that 'the receipt of the same was prejudicial, and- that such evidence was incompetent to establish respondent’® claim. One of the contentions of appellant, and1 the s'ole contention upon which be based1 the defense olf no- ¡consideration for the note, wa9 that he never had received1 any certificates of stock, and •that therefore his motes were without considerabiion. Other evidence bald been received tending to show that appellant was ■recognized as and -interested himself as an active stockholder of the ag-emcy even after the giving of the renewal notes dated August 1st. The evidence now under consideration, consisted in .part of a- financial statement that had1' been rendered by- appeh tent to this third party, which statement would show appellant to be a man -of slotne considerable wealth. Appellant contends that the receipt of such statement would- tend to prejudice the jury. While it is true that the financial statement -showed that appellant was a man possessed of considerable wealth, and that, [442] if this was ail that appeared' therein, it would1 undoubtedly have been incompetent for any purpose, yet: such statement listed: the items of appellant's property, among -whidh were these shares of stock in the agency — which shares he now claims he was never the owner of because the certificates1 therefor had never been 'delivered to him. This statement was rendered! after the first' renewal notes were given, anid certainly was entitled to soma weight by thie jury as proof that the appelant, whether he had received. his certificates of stock dr not, considered himself the owner of' the stock for which he had' given the notes in suit, and it wlas therefore competent upon the question of consideration for the notes. [5] . It appeared1 on. the direct examination of respondent that, at tire time the two note® of April let -were negotiated' for and received1 by the bank, one Messenger, wh'o< was then the president of the bank, iwas also a 'director o.f the agency; and that it wlas be who as a representative of tíre agency procured the bank to take such notes 'in exchange for the notes it then held. Upon cross-examiimtiou respondent was asked what position Messenger occupied with tine agency. This question was objected to a® .improper cross-examination, and such .Objection was sustained. The evidence of this '.witness was produced throuigh the medium' of a deposition.', which ’deposition discloses that, in answer to 'the above question, the witness said!, “I think he was vice president.” Appellant contends that he 'should have been allowed to have introduced this answer, and) that he was prejudiced by its exclusion. There is no merit to 'appellant’s Contention. Appellant was free ten offer this question and answer as a pant of his own case if he believed' that such) 'answer was ■material to any issue before the court anid jury. [6] Appellant contends that, Messenger being the vice president of the agency, then, under the rule announced iby this court in Citizens’ Bank v. Rowe, 36 S. D. 155, 153 N. W. 939, the bank -was changed with notice of everything which Messenger knew that would' tend to support the defendant's, plea of no Consideration or of fraud. Without in any way reviewing the decision in the Rowe Case,' we would call attention to the difference in the f'adts. of the two cases. In the above decision in the Rowe Case it was assumed that Maytag was president of [443] the Mausoleum Company, and' also thaib he had .actual' knowledge of the facts rendering the note invadid. It w'as this actual knowledge with which the plaintiff, o)f whliahi he (Maytag) was also president, was hieilid charged. Of course under such .facts, if Maytag acted for the plaintiff in the purchase of such notes, such plaintiff would! 'stand' charged) with' notice of the facts' known to Maytag. But the facts of this, caste are entirely 'different. There is no evidence showing that Messenger had personal- knowledge of any fact tending tcS support the defenses pleaded! by appellant. We know of no- 'authorities that would charge a bank with presumed knowledge of facts whiidh at besib could -only be presumed to be lcnlcwn to one of its officers merely because such officer is also am officer oif another corporation. Moreover, in this case, it dearly appears that the bank, in all its transactions' ¡in relation to these notes, acted ‘through and under the authority of its discount committee, in which committee Messenger 'did not act. [7] The court instructed in effect that, dlf appelant ait the time of executing 'the renewal notes s'uied upon had knowledge either of the want of consideration in the original notes or of the alleged fraud practiced upon him in. inducing him' to give such original metes, he cannot riciw urge such.- -want of consideration or fraud as a defense to the notes sued' upon. Appellant contends the law to be that the payee Cannot recover against the makers of a note, which note is given in consideration of and in. renewal 'cif a note of the maker, when 'the note of which iib is a renewal has not been returned, .and where tire original note was .without consideration or procured through) fraud. Appellant cites numerous: authorities in support of such proposition. The trouble with appellant is that he has ignored* lope important element in the above instruction — the knowledge possessed by appellant at the time of giving the notes sued upon. Where such knowledge is lacking, appellant's law applies; where such' knowledge exists, the 'law is as .announced ¡in such instruction. Daniel, Neg. Instrs., § 205, p. 302; Joyce, Defenses to Com. Paper, § 649; Stewart v. Simon, 111 Ark. 358, 163 S. W. 1135, Ann. Cas. 1916A, 825, and eases cited in notes at page 827 of Ann. Cas. 1916A. Tire judgment and order appealed from are affirmed.