Leonard v. Raleigh Co-operative Mercantile Co.

[403] Statement. Bronson, C. J. This is an action upon a promissory note. Befendarits have appealed from the judgment, and' from an order denying a [404] motion for judgment non obstante, or, in the alternative, for a new-trial. The facts are: In Juty, 1915, plaintiff owned certain merchandise and store fixtures at Raleigh,'North Dakota. Through the efforts of one Strain, the defendant company -was organized and negotiated ■with plaintiff for the purchase of the merchandise and fixtures. A sale was made; the merchandise and fixtures were delivered to the company. Strain was employed as the company’s manager. As a part of the purchase price, defendant company made to plaintiff the note involved, dated September 1st, 1915, for $1,000 due October 16th, 1916, at Raleigh, North Dakota. This note was indorsed, before delivery to plaintiff by defendant Nultemeier, a director, by defendant Fisher, a stockholder, by defendant Benson, secretary of the company, by Strain, the manager and by one Bosworth, a farmer. The manager, Strain, secured the indorsers to the note. Later, on May 29th, 1916, by an instrument in writing between Strain and defendant company, Strain relinquished bis position as manager and was released from all obligations as indorser. Tbis agreement was signed by defendants Nultemeier and Benson, and other directors of defendant company. When the note became due, one Tavis, a notary public, presented tbe note to the maker for payment, protested the note for nonpayment and gave notice of dishonor to, the indorsers, as appears by his certificate thereof. This action was instituted in September, 1918, against defendant company and defendants Nultemeier, Fisher and Benson, three of the indorsers on the note. Defendants Nultemeier, Fisher and Benson answered. In an amended answer they alleged conditional delivery of the note, nonpresentment and no notice of dishonor, discharge by release of the indorser Strain, breach of warranties in the sale of the merchandise, want and failure of consideration. The defendant company went into bankruptcy. Plaintiff filed- his claim iu bankruptcy. Before the second trial of this action, this appeal involving the second trial, plaintiff received a dividend of 20 per cent upon his claim. The notary’s certificate of presentment and notice of dishonor does not show the place where the note was presented. Otherwise the certificate is regular in form. The notary, in rebuttal, testified to the effect that he presented the note to defendant company at Raleigh, North Dakota, to someone fin charge of the store there; that the notices of dishonor, duly enveloped, sealed, and stamped were de [405] posited in a mail box at a bank; that lie does not recall specifically whether he deposited the same in the postoffice but it was the custom of the bank to deposit the mail in the mail box once or twice daily; that the notices of dishonor so mailed were never returned. Defendants contend that the proof is insufficient to show presentment at a specified place, identification of the note presented, and due mailing of the notices of dishonor. Defendants offered evidence to the effect that the note involved was signed by the indorsers with the understanding and knowledge of the plaintiff that there should be secured before delivery, as indorsers, all of the directors of the defendant company and throe, or more additional signers; that, pursuant to plaintiff’s suggestions and directions, Strain was the person who did secure the indorsers and was supposed to secure the other endorsers required. Plaintiff gave testimony to the effect that his only understanding or agreement was that he would accept notes signed by individuals that were acceptable to him; that Strain did not secure indorsers for him and was not his agent. The trial court submitted to the jury the issue of conditional delivery and of the understanding or agreement of the parties. Defendants contend that the evidence discloses, as a matter of law, conditional delivery. Defendant further contends,.that the release of Strain, as indorser, operated to release all of the indorsers since the notes were primarily indorsed upon an agreement and understanding for conditional delivery. During the course of the trial there was received in evidence the original answer over defendant’s objection. This original answer did not incorporate therein the defense of conditional delivery. Upon cross-examination of one of the defendants’ witnesses, plaintiff sought to establish in evidence that defendants had disclosed their defenses to their attorneys when the original answer was presented. Attempts were made to elicit the fact that the issue of conditional delivery, injected in the amended answer about a year and a half later, was an afterthought. Plaintiff maintains that the original answer was offered merely to show lack of good faith and not as an admission. Defendant contends that the admission of this answer was prejudicial error. Defendants complain of instructions which failed to designate all of defendants’ defenses; which charged the liability of accommodation endorsers without including the element of delivery; which charged, in406 the language of the statute (Comp. Laws, 1913, § 6_990) concerning the giving of notices of dishonor hy mail, without mentioning the necessity of postage upon letters. Error is also predicated upon instructions which submitted the issue.' of conditional delivery without including instructions upon delivery and upon the question of Strain being an agent of plaintiff in securing the indorsers. Error is also predicated upon the refusal of the trial court to grant defendant’s motion for a directed verdict made at the close of plaintiff’s testimony at which time oral proof concerning the place of presentment by the notary had not been received. This contention is made upon the ground that defendants are entitled, pursuant to Chap. 335, Laws 1923, to rely upon the state of the evidence at the time when the motion was made although subsequently proof was introduced which obviated the effect of such motion. Decision. The evidence is sufficient to support the verdict of due presentment and notice of dishonor. The certificate of protest was appropriate, though not required, and was prima facie evidence of its contents. Comp. Laws, 1913, §§ 842, 7003; Neg. Inst. Act, § 118. The oral proof concerning the presentment and mailing of the notices of dishonor was properly received. Nelson v. Grondahl, 13 N. D. 363, 100 N. W. 1093; Central Nat. Bank v. Stoddard, 83 Conn. 332, 339, 76 Atl. 472. It was for the jury to determine whether the note, in fact, had been presented, pursuant ‘to the certificate and oral testimony of the notary, and whether due mailing was made of notices of dishonor as required by statute. Comp. Laws, 1913, §§ 6989, 6990, (>991 (Neg. Inst. Act, §§ 101-106) Crawford’s Anno. Neg. Inst. Law, p. 180. Upon the record we are not prepared to hold, as a matter of law, that there was an agreement and understanding between plaintiff and endorsers that a certain number of indorsers should be secured upon the, note and that the note, was conditionally delivered for such purpose. It was necessary for defendants to establish the fact of a conditional delivery as well as the fact of an agreement between the indorsers for a conditional delivery. Upon the record the fact of a con [407] ditional delivery was for the jury. See note in 45 L.R.A. 347; 8 C. J. 207; Comp. Laws, 1913, § 690,1 (Nog. Inst. Act, § 16). The contention made concerning the release of Strain as indorser, as being a release of the other indorsers, is without merit. We are fully agreed that the admission of the original answer, under the circumstances, did not constitute prejudicial error. The contentions made by defendant concerning the instructions of the trial court, when considered in connection with all of the instructions given, are without merit and require no discussion. The attempt of defendants to predicate error through denial of their motion for a directed verdict made at the close of plaintiff’s case upon defects of proof then existing but afterwards supplied after defendants had submitted their defense is wholly without merit. It has consistently been the rule of practice in this state that a defendant who introduces his testimony after an order overruling his motion for a directed verdict made at the dose of plaintiff s ease cures the error then existing, if any. The only exception is that, if he renews such motion at the close of all of the testimony, he may secure thereby a review of the entire ease and of any error existing in the entire record. See Bowman v. Eppinger, 1 N. D. 21, 44 N. W. 1000; First Nat. Bank v. Red River Valley Nat. Bank, 9 N. D. 319, 322, 83 N. W. 221; Colby v. McDermont, 6 N. D. 495, 71 N. W. 772; Ward v. McQueen, 13 N. D. 153, 155, 100 N. W. 253; Halverson v. Lasell, 83 N. D. 613, 157 N. W. 682; Scott v. State, 37 N. D. 90, L.R.A.1917F, 1107, 163 N. W. 813; Buchanan v. Occident Elevator Co. 33 N. D. 346, 157 N. W. 122. Chapter 335, Laws 1923, requiring the court, when objection is made, to overrule such motion and submit the cause to the jury does not change this rule of practice. The order and judgment are affirmed. Birdzell, Nuessle, Christianson, and Johnson, JJ., concur.