Case ID: iowa_59/html/0173-01.html
Source: Caselaw Access Project
Author: {"author": "Adams, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Van Vechten v. Smith.
    1. Instruction: issue not supported by evidence. When an issue is tendered by answer, but not supported by any evidence, the defendant cannot be prejudiced by the failure of the court to submit that issue in his instructions to the jury.
    2. Evidence: promissory note: fraud: statement of vendor. A statement not amounting to a warranty, made by the vendor as to the value of the property sold, is to be treated as a mere opinion; and even if,such statement is false and intended to deceive, that fact will not defeat recovery upon a note given for the property.
    3; -: -: -: collateral agreement. Where defendant gave his note to plaintiff for two shares of stock, and at the same time gave plaintiff six dollars for which he took plaintiff’s due bill for certain property, held that plaintiff’s failure to deliver the property named in the due bill was not such a fraud as to avoid a recovery on the note.
    
      4. Contract: rescission: evidence excluded. A party cannot rescind a contract without surrendering, or offering to surrender, all that he has received under such contract; and it was held not error in this case for the court to exclude evidence offered by the defendant that he had surrendered the stock, when there was "no pretence that he had surrendered, or offered to surrender, the due bill.
    5. Evidence: promissory note : parol not admissible. Parol testimony that a promissory note was to be paid only out of commissions to be earned by the payer as agent of the payee, held not admissible to contravene the terms of the note in a suit thereon.
    
      6. Agency: to collect note: authority limited. An agent authorized to collect a note cannot bind his principal by an expression of his opinion as to the reading of a doubtful word in the note.
    7. Evidence: admission of : error without prejudice. When plaintiff had shown by undisputed evidence and without objection that an interlineation was made before he purchased the note, defendant was not prejudiced by the admission of other evidence that the interlineation was in the note soon after plaintiff purchased it, though such evidence was immaterial.
    
      Appeal from Jones Circuit Court.
    
    Thursday, July 13.
    Action upon a promissory note executed by the defendant o the Iowa Iron and Steel Fence Co. of Cedar Rapids, and sold and indorsed by the company to the plaintiff. The copy set out by the plaintiff in his amended petition is in these words:
    “Montioello Township, Jones County, Iowa. )
    “July 25, 1877. }
    “One year after date I promise to pay to the treasurer of the Iowa Iron and Steel Fence Co. of Cedar Rapids, or bank, $200 at the City National Bank of Cedar Rapids, Iowa, value received, with interest at ten per cent from date. Reasonable attorney’s fee if suit be instituted on this note.
    “signed, “IIenry D. Smith.”
    The defendant for answer avers that the copy set out is not a true copy; that while it is true as shown, that the note at the time it was executed contained no words of negotiability, it does now contain such words; that instead of the'word “bank” as contained in the copy after the word “or,” there is in the note the word bearer after the word “or;” that the word bearer was interlined after the note was signed and delivered; and that by the interlineation of the word the note was materially altered. The defendant further avers that the note was fraudulently obtained, and is without consideration. There was a trial to a jury and verdict and judgment were rendered for the plaintiff. The defendant appeals.
    
      
      Sheean dbMcCarn, for appellant.
    
      McCrary & Barber and Remley db Ercanbrack,, for appellee.
   Adams, J.

I. The court instructed the jury in substance that if they should find that the word bearer was interlined after the delivery of the note, that would be a material alteration and vitiate'the note; but if tpey gPoupq find 'that the word bearer was interlined at, or before delivery, the note would be negotiable, and the plaintiff would be entitled to recover, even though they found that the note was procured by fraud and without consideration. The defendant contends that the court erred in the last part of the instruction, because both the plaintiff and defendant aver in substance that the note is not negotiable, and the court should not have instructed the jury upon the theory that they were at liberty to find that it is.

It will be seen that the plaintiff’s theory that the note is not negotiable rests merely upon the fact that he reads the disputed word as bank and not as bearer. The defendant’s theory that the note is not negotiable rests upon the theory that the disputed word was not in the note at the time it was delivered.

The disputed word, we judge from the evidence, is very nearly illegible. If the word is bcmk it is immaterial when it was written, because the legal effect of the instrument is the same with it as without it. Granite Railway Co. v. Bacon, 15 Pick., 239. But if the word is bank as plaintiff assumed and averred, he took the note subject to all defenses.

The defendant insists that whether the word is bank or bearer the plaintiff took the note subject to all defenses, and for the reason that the plaintiff avers that the word is bank. We do not feel called upon to go into any inquiry as to the correctness of this position. We do not think that the defendant was prejudiced by the instruction, even if it was erroneous. The defendant does not complain that the issue tendered by him by his averment that the word .in dispute is bea/rer and was interlined after delivery, was not properly submitted. He had the full benefit of that defense. His complaint is that his defense of fraud and want of consideration was not properly submitted. His theory is that the jury may have found that the word in dispute is bearer and was interlined at, or before delivery, and having so found felt precluded from going into the consideration of the defense of fraud and want of consideration. But the defendant was not prejudiced unless there was some evidence of fraud or of a want of consideration, and we have to say that we fail to discover any.

The defendant avers, and the undisputed evidence shows, that the note was given for two shares of stock in the Iowa Iron and Steel Fence Co. of Cedar Rapids. The averment of fraud consists simply in this: that ,. , „ ,. , A , , , the agent of the company who negotiated for the company the transaction, by which the defendant took two shares of stock in the company, and gave his note therefor, represented to the defendant that the stock was valuable, whereas, it was in fact, worthless.

But the doctrine is elementary that under ordinary circumstances a statement by a seller of property that it is valuable is to be treated as a mere opinion, and not as a false representation, however insincere the seller may have been in his statement. In Brown v. Castles, 11 Cush., 350, Metcalf, J., after stating the rale that where a seller makes a known misrepresentation of a material fact, not within the observation of the buyer, an action will lie, says: “This rule is not applied to statements made by sellers concerning the value of the thing sold, it always being understood the world over that such statements are to be distrusted.” So again in Manning v. Albe, 11 Allen, 522, Gray, J., said: “This court has repeatedly recognized and acted upon the rule of the common law by which the mere statements of a vendor, either of real or personal property, not being in the form of a warranty, as to its value, are assumed to be so commonly made by those holding property for sale, in order to enhance its price, that any purchaser who confides in them is considered too careless of his own interests to be entitled to relief, even if the statements are false and 'intended to deceive.” We see nothing in the case before us to justify us in holding that the rule above enunciated is not applicable.

As a further conclusive answer to the defendant’s position, we may say that we see no evidence showing, or tending to show, that the stock was not in fact valuable, as the company’s agent is alleged to have stated. On the other hand, the defendant testifies that he knows nothing about the stock.

There is evidence that the defendant j>aid the company six dollars, and that in consideration thereof the company was to him. six dollars worth of fencing material, which it failed to do. Eor the six dollars the company gave the defendant its due bill, payable in fencing material. The defendant, if we understand him, relies upon the failure of the company to send him the fencing material as constituting a fraud sufficient to avoid the note sued on.

But the most that can be said is that the failure to send the fencing material has given the defendant a right of action upon the due bill which he holds for the fencing material. A mere failure to perform an agreement never constitutes fraud.

II. The defendant averred in his answer that he returned the stock to the company. Upon the trial he offered to prove ihe hrath °f tiffs allegation, and the court refused to allow him to do so. He claims that the paymént of the six dollars, the taking off the company’s due bill for that affiount of fencing material, the taking of two shares of stock in the company, and giving his note therefor, constituted altogether one transaction; that when the company failed to send the fencing material he had a right to rescind his agreement to take the stock, and did rescind it, and should have been allowed to prove that he returned the stock.-

If the several matters above set out constituted one transaction, as the defendant claims, he could not rescind without surrendering, or offering to surrender, the due bill, and there is no pretense that he did either.

'III. At the time the stock was taken by the defendant, and the note sued on was given therefor, the defendant was appomled the agent of the company to sell fencmg material within his township. The six dol^ars worth of fencing material which his due bill called for, was to be sent him as a sample and to be used as such. The defendant claims that he expected that his commissions on sales would be sufficient to meet the note, and that he was not to pay it except from such commissions, which connnisions he has failed to make because he had no sample fence. The defendant, when examined as a witness upon the stand, testified in substance that the agreement was that he was to pay the note from commissions and not otherwise. Afterward, upon the motion of the plaintiff the defendant’s testimony in respect to such agreement was stricken out. The defendant assigns the ruling as error.

It may be that the agreement in respect to the payment of the note was what the defendant alleges it was, and that the defendant will suffer a hardship in not being allowed - to show it. But it will be seen at once that what he proposed to do was to show an agreement by parol which contravened, so far as it was of any value to the defendant, the terms of the note.

IY. We are unable to see that the defendant has any valid defense unless the disputed "word in the note is bemer, and was interlined after delivery. Eor the purPose showing that the word is bearer he offered to testify that one Bennett said that it was bearer, and that Bennett was acting as the agent of the plaintiff in trying to collect tbe note. Tbe court ruled that sncb evidence was inadmissible and tbe defendant assigns tbe ruling as error. Bennett’s authority to collect tbe note was not authority to read the note and bind the plaintiff by his reading.

Y. The plaintiff was allowed to show, against tbe objection of tbe defendant, by one C. D. Yan Yecbten that be saw the note socm after the plaintiff purchased it, and soon after it was made, and that the note has not jeered since that time. It appears that this evidence was immaterial, but we think that tbe defendant was not prejudiced. It was shown by other evidence and without objection that the interlineation was made before the plaintiff purchased tbe note, and the evidence upon that point is undisputed.

■ The views which we have expressed cover, we think, substantially all the errors assigned, and we have to say that we think the judgment of the District Court must be

Arfirmed.