Hurt v. Ford

Burgess, J. This is a suit upon a negotiable promissory note for the sum of $8,500, dated on the ninth day of November, 1887, executed by defendants and payable to the order of plaintiff on or before twelve — 289 — months after its date. The material allegations of the petition upon which the case was tried are as follows: “Plaintiff, for her amended petition, leave of court having first been obtained, states that the said defendant, Geo. D. Ford, and the said defendant, John R. Towers, under and by the name of J. R. Towers, on November 9, 1887, made, executed and delivered to the plaintiff herein their certain promissory note, wherein they promised, for value received, to pay to the order of Julia G. Hurt, the plaintiff herein, on or before twelve months after date, the sum of eight thousand, five hundred dollars, at the National Bank of Kansas City, with interest from date thereof at the rate of ten per cent per annum, which said note is herewith filed and made a part of this petition. “Plaintiff states that on November 14, 1888, the said defendants paid the sum of eight hundred and fifty dollars in full of interest to November 9, 1888, which said sum is credited upon the back of said note. That on November 9, 1889, the said defendants paid the interest in full on said note to said date, and the same is credited .upon said note. That the plaintiff is now the owner and holder of said note.” The answer, omitting the formal parts, is as follows: “Defendants, for their second amended answer to plaintiff’s amended petition, admit they signed the note as set forth in plaintiff’s petition; admit the same was delivered to plaintiff by one R. L. Yeager, as hereinafter set forth; admit defendants made payments as set forth in said petition; and for affirmative defenses to said note, defendants aver: First. That said note was signed by defendants, solely for and on account and in renewal of a certain promissory note, in words and figures following, viz.: ‘Kansas City, Mo., May — 290 — 9th, 1883. No. 21,950. Six months after date we promise to pay E. K. Thornton, cashier, or order, at the Bank of Kansas City, eight thousand and five hundred dollars, for value received, with interest from maturity at the rate of ten per cent per annum. $8,500, M. R. Hightower. T. R. Towers. Geo. D. Ford.’ Defendants further aver that the said promissory note last mentioned was given under and by virtue of the following agreement and arrangement, to wit: The said M. R. Hightower, principal in said last mentioned note, made application to the plaintiff in the spring of 1883 for a loan of $8,500 to enable him to purchase a herd of cattle. Plaintiff not then having the ready sum to make said loan, and being desirous to assist said Hightower, who was her brother-in-law, requested said Hightower to procure the defendants to sign a note, with said Hightower as principal, to the Bank of Kansas City, for $8,500, and then and there requested, authorized and empowered said Hightower to state to the defendants, in order to induce them to become signers on said note, that she would take up said note when it should become due, and save defendants harmless from its payment. Defendants aver that, in pursuance of said request and authority, said Hightower requested defendants to sign said note, stating to them that plaintiff had requested him to say, for her, that if they would sign said note, and thus enable him to get the money from the bank, she would take up said note when due, and they should be held harmless from its payment. Defendants further aver that, by reason of such statements and agreement, and relying on the same, they were induced to and did sign said note with said Hightower, and that plaintiff, in pursuance of said agreement above stated and communicated to the defendants, came into possession of said note, the same being turned over to her as an asset of the estate of her — 291 — deceased husband, and became her property, and by her act in that behalf defendants became and were reused from all liability on said note, and the same became as to them null and void, and plaintiff .is now estopped from maintaining any action upon the note given in renewal thereof.' Wherefore defendants . aver that the note described in plaintiff’s petition was and is wholly without consideration, and plaintiff ought not to have and maintain her action upon the same. “For a second defense, defendants aver that the note described in plaintiff’s petition was not only without consideration, as alleged in this answer, but that it is and was of no validity in law, in that it was placed in the hands of one R. L. Yeager, who was at the time the duly authorized agent of the plaintiff, in escrow, with the direction that it was to be delivered by him to plaintiff, and have effect as a valid obligation, only upon condition that one M. R. Hightower, for whose benefit the instrument was signed, should be procured also to sign the same, and said Yeager received said note charged with such directions and conditions. And defendants further aver that said Hightower was never procured to sign, and never did sign, said note, but without the knowledge of defendants, or either of them, the said Yeager delivered said note to the plaintiff; that at the time the note in suit was placed in the hands of said Yeager, - said Yeager turned over to one Towers the note first above described, and said Towers turned the same over to the defendants; that the knowledge that said Hightower had not signed said note came to the defendants; since the commencement of this suit, and the payments thereon were made without the knowledge that the note had been delivered to said plaintiff by said Yeager, contrary to said instructions given to him as aforesaid, and so defendants do herewith tender into court, for plaintiff, the promissory — 292 — note first above described, and pray judgment. For a thirc^ defense, defendants aver that the note described in.plaintiff’s petition was and is, not only without consideration, as first alleged in this answer, but that it was and is of no validity in law, for it was understood and agreed, between defendants and one M. R. High-tower, that said Hightower, for whose benefit the said notes were given, should also sign the note in suit, and in pursuance of said understanding said note, after it had been signed by the defendants, was handed by them to their agent, one Maj. Towers, with instructions for him to obtain said Hightower’s signature upon the same before delivery thereof, but the said agent, not being able to find said Hightower, took the said note to the said R. L. Yeager, who at that time was the attorney and duly authorized agent of the plaintiff, and delivered the same to him, at the same time disclosing to said Yeager the instructions he had received from defendants as aforesaid, and the said Yeager, thus having notice of the instructions so given to defendants’ agent, received said note charged with said notice, and without further authority from the defendants, or either of them, delivered said note to plaintiff without obtaining the said Hightower to sign the same. And defendants aver that said Hightower was never procured to sign, and never did sign, said note. Defendants further aver that at the time the note in suit was placed in the hands of said'Yeager, said Yeager turned over to said Maj. Towers the note first described, and said Towers turned over the same to the defendants, who herewith tender into court, for plaintiff, the same. They further aver that the knowledge that said Hightower had not signed the note came to defendants since the commencement of this suit, and the payments thereon were made without the knowledge that said note had been delivered to plaintiff — 293 — by said Yeager contrary to the notice and instructions given him as aforesaid.” Plaintiff replied, denying all allegations in the answer except as to facts alleged in the petition. Plaintiff asked and the court refused the following instructions: “8. The jury are instructed that, although the witness Towers delivered the note in suit to witness Yeager in violation of the instruction of defendants, and although he communicated his instructions to witness Yeager at the time of such delivery, yet if the jury find and believe from the evidence that after said delivery, and after having knowledge that Hightower had not signed said note, defendants approved and adopted as their own the act of said Towers in making said delivery to said Yeager, the verdict should be for the plaintiff. i£10. The court instructs the jury that if they find from the evidence that the note in suit was delivered by W. A. Towers, as agent for the defendants, to R. L. Yeager, without imparting to him notice that he had been instructed by the defendants not to deliver the note to him until he had secured the name of High-tower thereon, then such delivery was valid and binding, and you must find for the plaintiff in the sum of $8,500, with interest thereon at the rate of ten per cent per annum from November 9, 1889; and this you must do, although you may believe that defendants may have instructed him not to deliver said note until he had secured the name of Hightoiver on said note.” The cause was tried with the aid of a jury, which returned a verdict for defendants. In due time, to wit, January 25, 1893, the plaintiff filed her motions for a new trial and in arrest of judgment. Before that motion was disposed of, to wit, March 29, 1893, plaintiff filed her motion for judgment non obstante veredicto. — 294 — On April 22,1893, the court sustained the motion for a new trial upon the ground that it committed error in refusing instructions numbered 8 and 10 asked by plaintiff; and at the same time sustained her motion for a judgment on the pleadings, and rendered judgment in her favor for the amount due on the note and interest. In due time defendants filed their motion for a new trial, which being overruled they saved their exceptions, and bring the case to this court by appeal. M. R. Hightower, mentioned in the answer, is the brother-in-law of the plaintiff Julia G. Hurt, he having married her sister some time prior to the transactions-out of which this litigation arose. In 1883 it became necessary for Hightower to borrow $8,500, and he applied to the plaintiff, who is the widow of James Hurt, deceased, and whose estate was then in process of settlement, for a loan of that sum. She did not have the money. She authorized him, however, to say to defendants that if they would become his sureties so that he could borrow the money from some other source, she would take the note up at maturity. Upon this representation defendants became Hightower’s securities on a note to the Bank of Kansas City for the sum of $8,500, upon which he procured the money. The note was dated May 9, 1883, due in six months after-date. When the note became due plaintiff applied to R. L. Yeager and James Lincoln, who were executors of the will of said James Hurt, to take up the note. The executors then paid the note, and indorsed it to-her without recourse. During the early part of November, 1883, it became necessary for Hightower to borrow the further sum of $8,000, which he obtained from the executors of the Hurt estate, giving as sureties George D. Pord, W. A. Towers and Charles Gudgell. These two notes were turned over to the plaintiff by said executors as part of — 295 — her distributive share of that estate. . Interest was paid on both notes by ' Hightower until November 9, 1886, when he ceased to pay it any longer. Plaintiff then demanded the money on the notes or the payment of the interest due and new notes. One note for $8,000, dated November 9, 1887, and payable to plaintiff on or before twelve months after date, was dnawnup and signed by George D. Ford, W. A. Towers and Charles Gudgell and delivered to E. L. Yeager, attorney for plaintiff. At the same time Yeager assigned and delivered to the makers of that note the old note for $8,000, signed by Hightower, Ford, Gudgell and W. A. Towers, dated November 11, 1893. At the same time the note in suit was drawn up, signed by the defendants, and delivered to E. L. Yeager, attorney for plaintiff under the following circumstances: A note was executed by Hightower, Ford and Towers. Immediately after the note was executed, Ford concluded that it would be preferable to have the the note read “on or before,” and Maj. Towers was deputed to take the note (signed by Hightower and the defendants) to Mr. Yeager (plaintiff’s attorney) and inquire if another signed “on or before,” would be accepted. Maj. Towers thereupon took the note signed by Hightower and the defendants to Yeager, and advised. him of Ford’s request that the note should be changed to “on or- before.” Yeager acceded to that request, and returning the note to Major Towers, drew up another reading “on or before,” for the parties to execute. Major Towers then returned with the new note for execution. In the meantime Hightower had disappeared, and when Ford and Towers executed the note they turned it over to Major Towers, saying tp him to go out and find Hightower and get him to sign it, and not to deliver it to Yeager until he had obtained Hightower’s signature. Major Towers, accompanied — 296 — by Charles Gludgell, started out in search of Hightower, and being Unable to find him, Major Towers went to Yeager’s office and stated to him.that his instructions were to get HightowePs name on the note before delivery; that he had been hunting him and could not find him, and asked Yeager to take the note and get Hightower’s name on it before delivering it to Mrs. Hurt. Yeager replied that he did not see what advantage it would be to have Hightower’s name on the note as he was “busted,” but Major Towers replied, that however that might be, his instructions were to obtain Hightower’s name before delivery. Yeager accepted the note, and turned over to Major Towers the first note. Yeager did not get Hightower to sign the note. He turned it over to Mrs. Hurt without his signature. Defendants testified that they did not know that Hightower’s signature had not been obtained pntil after this suit had been brought, although they supposed it had been. Towers kept the old note and paid interest on the note in suit up to November 9,1889. There was, however, evidence tending to show that in December, 1890, Towers knew that the name of Hightower was not on the note. Upon the execution and delivery of the notes all the interest due on the old notes was paid to plaintiff and the old note of which the one in suit is a renewal delivered to defendants. The first question for consideration on this appeal is with respect to the action of the court in rendering judgment for plaintiff on what is called the motion of' non obstante veredicto. Such a motion can only be sustained when it appears from the record, that the allegations in the answer constitute no defense to the action (2 Elliott’s Gren. Prac., sec. 997; Broom’s Com. [4 Ed.], star page 209; 2 Tidd’s Pyac. 920; 1 Wilson’s Reports, 65), and even then such a judgment can only be rendered in a clear case on the application of — 297 — plaintiff made after the verdict, and before entry of judgment on the verdict. 1 Freeman on Judgments [4 Ed.], sec. 7. Tidd, in stating the distinction between a judgment non obstante veredicto and a repleader, thus defines the former: “ Where the plea is good in form, though not in fact, or, in other words, if it contain a defective title or ground of defense by which it is apparent to the court, upon the defendant’s own showing, that in any way of putting it, he can have no merits, and the issue joined theron be found for him, there, as the awarding of a repleader could not mend the ease, the court, for the sake of the plaintiff, will at once give judgment non obstante veredicto. But where the defect is not so much in the title as in the manner of stating it, and the issue joined thereon is immaterial, so that the court know not for whom to give judgment, whether for the plaintiff or defendant, there, for their own sake, they will award a repleader. A judgment, therefore, non obstante veredicto is always upon the merits, and never granted but in a very clear case.” 2 Tidd’s Practice, 922; Lough v. Thornton, 17 Minn. 253; Bellows v. Shannon, 2 Hill, 86; Friendly v. Lee, 20 Ore. 202. In this case the verdict and judgment thereon were rendered on the twenty-first day of January, 1893, while the motion for judgment nowithstanding the verdict was not filed until March 29, 1893. In The State of Mississippi v. The Commercial Bank of Manchester, 6 Smedes and Marshall, 218, the verdict and judgment were rendered on the twenty-first of November, 1845. On the twenty-sixth of the same month the district attorney moved to set aside the judgment and for judgment non obstante veredicto, which was overruled. It was objected that the motion came too late af-' ter judgment was entered. The court said: “That, like a motion in arrest of judgment, it must precede the entry — 298 — of judgment, it being too late to arrest that which is already entered. This objection is quite technical, and yet it is in strict accordance with law. The objection is made, and there seems to be but one rule on the subject, and that is, that such a motion must be made immediately after the verdict, and before a judgment is rendered on the verdict.” Moreover, when the motion was ruled on by the court and judgment non obstante veredicto rendered, the verdict had been set aside, so that it could not then have been maintained unless it be treated as amotion for judgment upon the pleadings, which under our system of practice may be made at any time after the pleadings are made up, and before verdict, and after verdict set aside. The motion contained all averments necessary in a motion for judgment on the pleadings, and treating it as a motion for that purpose, as we think it should be, the question arises as to the sufficiency of defendants’ answer, and in passing upon this question we think the same rule should be applied as in the case of a motion non obstante veredicto. But the sufficiency of the answer must be determined by the record, and not by the evidence. The answer admits that the note was delivered to oneR. L. Yeager, as thereinafter stated, and that payments were made on the note as set forth in the petition. It alleges that Yeager was plaintiff’s agent and attorney, and that the note was delivered to him with directions not to deliver it to plaintiff until Hightower’s signature was obtained thereto, which was never done. It will thus be seen that the answer not only admits the delivery of the note in express terms, but it also admits the payment of interest on the note after its delivery, which is inconsistent with the contention that the note was never delivered. The question then is, could — 299 — the note be conditionally delivered to the plaintiff or to her agent, Yeager, for her? Massmann v. Holscher, 49 Mo. 87, was a suit upon two promissory notes. One of the defendants answered admitting the signing of the notes, and their delivery to plaintiff to whom they were payable, and then alleged among other things that he signed and delivered the notes to plaintiff under an agreement and verbal understanding with him that the notes should be signed by one Hase, and if not so-signed that they should be considered as inoperative and void. Hase never signed the notes. The court held (we quote from syllabus) that: “A promissory note may be delivered to a stranger to be held by him as an escrow, to take effect on the happening of a future contingent event. But where it is held by the payee, the doctrine of escrow can not arise; and no fraud being charged, proof ■of an oral agreement by which the note was to become legally binding, not from its delivery according to its “tenor, but on the happening of a certain contingency, is inadmissible. Such testimony varies the effect of a written contract.” So in Henshaw v. Dutton, 59 Mo. 139, it was expressly held that a note given upon contingencies not expressed upon its face was no valid defense to the note; that it could not be given to the payee as an escrow; that such delivery must be made to a third person, not the payee; that parol evidence is not admissible to vary the meaning of a note. This case was before this court again in 1878, and the same doctrine announced. Henshaw v. Dutton, 67 Mo. 666. The same question was before this court in Jones v. Shaw, 67 Mo. 667, and it was again held that a note •can not be treated as an escrow after having been delivered to the payee, but in order to have that effect the delivery must be to a third person. See, also, the — 300 — recent case of Garvey v. Marks, 134 Mo. 1. The same rule was announced in Harwood v. Brown, 23 Mo. App. 69, and in Thompson, Payne & Co. v. Irwin et al., 42 Mo. App. 403. The cases of Carter v. McClintock, 29 Mo. 464, and State to use v. Potter, 63 Mo. 212, are not, we think, in conflict with what has been said. In the Carter case the note was obtained by fraud, and it was held that, as delivery is necessary to the complete execution of'a promissory note, if the payee obtain possession of it-by fraud,, he can not maintain an action thereon. A ruling, the correctness of which was fully recognized in Henshaw v. Dutton, supra. In speaking of the Carter case in State to use v. Potter, 63 Mo. 212, all that is said is that that case “simply declares that no delivery of a note occurs where the payee surreptitiously obtains possession thereof, and that he can not maintain an action thereon.” There is no allegation in the answer in the' case in hand that the note sued on was obtained by fraud, hence the Carter case and the Potter case have no bearing upon this case. The petition alleges that the defendants made, executed and delivered the note to plaintiff, and its delivery is admitted by defendants in their answer, and whatever the law may be elsewhere, with respect to the delivery of such an instrument in escrow, it is well settled in this State that it can not be done by delivery to the obligee, but may be to a third party. It follows that the second and third counts of defendants’ answer set -up no defense to plaintiff’s cause of action. In the first count of the answer it is alleged that plaintiff requested,- authorized and empowered High-tower to state to defendants, in order to induce them to become signers of the original note for $8,500, that she would take it up when due and save them harmless. That in pursuance of said directions Hightower made — 301 — the statements to them as directed by her, and that, relying upon said statements, they were induced to and did sign said note as the securities of Hightower. These allegations are denied by plaintiff in her replication to the answer. That the promise to save defendants harmless was simply an oral promise, appears from the answer and is {indisputable; and that such a promise is within the statute of frauds (R. S. 1889, sec. 5186), was ruled by this court in Bissig v. Britton, 59 Mo. 206. While that case is severely criticised in 1 Reed on the Statute of Frauds, sec. 144, and note “u” to that section, it was concurred in by a full bench, and its correctness has never been questioned by this court in so far as we are advised. The question then is, as it appears upon the face of the answer that the contract was merely oral and within the statute, Was it necessary, in order for plaintiff to avail herself of the Statute of Frauds, that she should plead it specially, or was it raised by the general denial in the replication? The rule seems to be that when the contract is denied, it is not necessary to insist upon the statute as a bar; that it is as fully raised by a general denial as by special plea. In Wildbahn v. Robidoux, 11 Mo. 660, it was said: “Where the defendant in his answer denies the contract, it is not necessary for him to insist upon the statute as a bar.” Hook v. Turner, 22 Mo. 333. So it has been said it is as well raised by general denial, “as any other answer could raise it.” Wiswell v. Tefft, 5 Kan. 263; Bliss on Pl., see. 353; Allen v. Richard, 83 Mo. 55; Hackett v. Watts, 138 Mo. 502. In Springer v. Kleinsorge, 83 Mo. 156, in passing upon a similar question, it is said: “On such state of the pleadings the plaintiff, as said by Ryland, J., in Hook v. Turner, supra, ‘must produce legal evidence of the existence of the agreement, which can not be established by parol proof.’ This logically results from the general denial — 302 — authorized by the Practice Act. The general denial puts in issue every fact included within the allegations of the petition, which the plaintiff must prove in order to a recovery. Northrup v. Miss. V. Ins. Co., 47 Mo. 435-444. In the action of replevin and of ejectment, under a general denial, the defendant may show that the claim of plaintiff is fraudulent and bad, and thus avoid the plaintiff’s title. Greenway v. James, 34 Mo. 328; Bobb v. Woodward, 42 Mo. 488; 25 Wis. 35, 36; 3 Bibb. 216. The answer in this ease contains, first, a general denial of the allegations of the petition. It is true, it pleads other matters of special defense, but the new matter is in nowise inconsistent, in contemplation of the Practice Act, with the general denial. They can well exist together in point of fact and law. Nelson v. Brodhack, 44 Mo. 596. This construction of the pleading in this case is in nowise in conflict with the cases of Gardner v. Armstrong, 31 Mo. 535; Rabsuhl v. Lack, 35 Mo. 316, and Graff v. Foster, 67 Mo. 512. . . . . . . In the first case cited the court simply holds that the petition was not demurrable for failure to recite that the contract was in writing. That was matter of defense to be raised by the answer. It does not say that the question would not be well raised, under our present Practice Act, by the general issue. So in the case in 35 Mo. the answer admitted the indebtedness without pleading the statute. And in Graff v. Foster, an examination will show that the answer did not deny the contract, but merely put in issue the indebtedness. To deny the indebtedness is no denial of the existence of the contract out of which the petition avers the indebtedness arose. Engler v. Bate, 19 Mo. 543.” The effect of the denial by plaintiff in her replication to defendants’ answer of all allegations therein except as to the facts alleged in the petition, was to deny that she ever promised defendants or agreed with them — 303 — that if they would become the sureties of Hightower she would save them harmless; and as the alleged contract was merely oral as shown by the answer, the plea of the statute was. as well raised by the denial as it would have been by special plea. The contract, if made, was clearly within the Statute of Frauds and no bar to plaintiff’s action. Upon the facts disclosed by the record, instruction numbered 8 asked by plaintiff presented to the jury the question of ratification which was raised by the pleadings and which the evidence tended to prove, and in its refusal error was committed which justified the court in setting aside the verdict. As it is manifest from the record that defendants have no defense which could be made available by re-pleading, the judgment is affirmed. All concur except Barclay, O. J., and Macfarlane, J., who dissent.