Fossan v. Gibbs

The opinion of the court was delivered by Benson, J.: This is an action upon an instrument whereby the makers promised to pay Austin Van Fossan and A. J. Miller $300, six months after date. It was signed by the defendants and several others, described as members and shareholders of the Arkansas City, Kan., branch of the Socialist Commercial Industrial Cooperative Association of America. Following the usual form of a promissory note is a statement that it is given to purchase property, described, consisting of the furnishings and tools of a retail meat market, the title to which is to remain in the payee until the note is paid. It appears that Van Fossan deposited $300 in a bank to be used in buying the necessary tools, etc., with which to carry' on the business. This note was then drawn payable to him and A. J. Miller, signed by twelve of the sixty members, and delivered to Van Fossan. Thereupon Miller, who was at first chairman of the association and afterwards bookkeeper, checked out the money, paid for the property, and then indorsed the note to Van Fossan. Miller really had no interest in it. The business failed, the property was sold, and the proceeds applied on the note. . The defendants sought to prove that it was agreed that the note should be paid out of the profits of the business of the association. Evidence of such an' agreement, however, was held immaterial, and that defense was withdrawn in the instructions. The instrument was an unconditional promise to pay money at a certain time, lacking, however, the quality of negotiability, because of the omission of the words “or order” or “or bearer.” (Neg. Inst. Law, § 8, Gen. Stat. 1909, §5254.) Oral evidence that it was [868] not to be paid until profits sufficient for that purpose were made out of the business would contradict its terms and could not be admitted as a defense. (Railway Co. v. Truskett, 67 Kan. 26, 72 Pac. 562; Thisler v. Mackey, 65 Kan. 464, 70 Pac. 334; Ehrsam v. Brown, 64 Kan. 466, 67 Pac. 867; Trice v. Yoeman, 60 Kan. 742, 57 Pac. 955; Milich v. Armour, 60 Kan. 229, 56 Pac. 1; Benner v. Luth, 28 Kan. 581.) The rule is thus stated in section 2425 of volume 4 of Wigmore on Evidence: “When a legal act is reduced into a single memorial, all other utterances of the parties on that topic are legally immaterial for the purpose of determining what are the terms of their act.” The defendants also claim that they signed the instrument upon an oral agreement with the payees that it was also to be signed by all the members of the association, and unless that were done it should not take effect as a valid obligation. The district court held that such an agreement would be a defense, and submitted to the jury the question of fact whether it had been so agreed. It was an undisputed fact that all the members had not signed, but there was a substantial conflict in the evidence whether such an agreement had been made. Upon this conflicting evidence the jury found for the plaintiff. The only defense therefore failed, and the judgment is affirmed.