Court Opinion

ID: 3490882
Source: CourtListenerOpinion
Date Created: 2016-07-05 21:59:21.980154+00
Date Added: 2024-06-11T14:05:05.690147
License: Public Domain

Plaintiff commenced two suits against defendant as indorser of two promissory notes. These notes, originally payable to defendant, by his indorsement passed to the Auto Purchase Company, and thereafter they passed to plaintiff by indorsement of the Auto Purchase Company. On appeal to this Court the two cases were consolidated, the *Page 636 
parties and issues being identical. After defendant had answered, plaintiff made a motion in each case for judgment on the pleadings (see Court Rule No. 17, § 7 [1945]) on the ground that "under the answer of defendant, * * * the facts set up by said defendant, even if true, do not constitute a defense to said action." The trial court granted plaintiff's motions and entered judgment in each case against defendant. Thereafter defendant moved in each case to set aside the judgment, urging in support of each motion: "1. That the judgment entered on the pleadings in the above entitled cause was contrary to the laws of this State: 2. That the judgment entered in the above entitled cause was unsupported by any evidence." Defendant's motions were denied, and he has appealed.
Each of plaintiff's declarations consists of two counts, one count being based specifically on the promissory note involved and the other on practically all of the common counts. Since defendant's answer in each case denied all of the allegations in the second count, the respective judgments were necessarily based on the first count, and the answer thereto. In the first of the two cases plaintiff had judgment for $1,854.28, and in the second judgment for $1,588.78. Since the record and briefs on this appeal by stipulation of counsel pertain only to the first of the two cases, our decision will likewise pertain to the first case, but under the circumstances will be controlling of decision in the second case.
Plaintiff's motion for judgment was not supported by an affidavit or by testimony taken in open court. Obviously the record could not be so amplified by one seeking judgment on the pleadings. So the controlling issue presented on this appeal is whether on the face of the pleadings plaintiff was entitled to judgment. At once the question arises as to whether *Page 637 
all the allegations in plaintiff's declaration essential to recovery have been admitted or has there been a failure to demand proof thereof, and also as to whether a valid affirmative defense is alleged.
In paragraph 4 of plaintiff's declaration it is alleged that "before the maturity of said note * * * (defendant) indorsed said note and delivered the same to (plaintiff's assignor or indorser) * * * for value. That thereafter and before the commencement of this suit * * * (the prior holder) indorsed said note and delivered the same to plaintiff for value." Defendant's answer specifically denies the allegations in paragraph 4 of plaintiff's declaration. By so doing defendant has denied that his indorsement and delivery of the note was before its maturity, and also denied that either plaintiff or the immediately prior holder of the note was a holder for value.*
Further, defendant's answer sets up an affirmative defense which in substance is that at the time defendant indorsed or assigned the respective notes to the Auto Purchase Company it was done with the understanding and agreement that defendant thereby did not assume "any personal liability as indorser or guarantor." If established by competent testimony the above would constitute a valid defense. Blackwood v. Sakwinski, 221 Mich. 464
(29 A.L.R. 1314). We quote in part that portion of defendant's answer wherein appears the defense of the above nature.
"(Defendant Johnston) was requested by the said Auto Purchase Company, through its agents and servants, to perfect its lien by placing the amount of its lien on the title (of the trucks for which the notes were given by defendants Mawby and Holcomb) to be issued to the aforesaid defendants (purchasers *Page 638 
of the trucks) by the secretary of State of the State of Michigan, and this defendant was further requested, in order to perfect its lien, to sign certain papers prepared by the said Auto Purchase Company; that, thereupon, this defendant advised the said Auto Purchase Company, through its agents and servants, that his dealings with the said defendants, Mawby and Holcomb (purchasers of the trucks), were on a cash basis and that he would under no circumstances become guarantor, surety or indorser with recourse of any papers executed and delivered by the said defendants to the Auto Purchase Company, * * * and that the said dealer's assignment and warranty reads as follows:
"`For value received the undersigned mortgagee hereby sells, assigns and transfers to Auto Purchase Co. — Detroit the within chattel mortgage and all right, title and interest of the mortgagee therein and to the property therein described, together with the note secured thereby.' * * *
"That in order to induce this defendant to affix his signature to the aforesaid dealer's assignment, the said Auto Purchase Company represented to this defendant that the aforesaid assignment and the affixing of his signature to the note attached thereto, exhibit A, was a qualified indorsement or assignment of all of his right, title, and interest in the property and did not carry any personal liability as indorser or guarantor; that this defendant, in reliance upon said representation, affixed his signature (to the notes in suit)."
Determination of the respective cases obviously requires consideration by the court or jury of any competent evidence relative to the issues raised by the above noted portion of the pleadings. If the Auto Purchase Company were plaintiff herein and the affirmative defense were established, it could not recover on these notes. Further, plaintiff's declaration *Page 639 
does not specifically allege that it became a holder of the respective notes prior to their maturity, and in any event the pertinent portion of plaintiff's declaration (paragraph 4) is specifically denied by defendant's answer. Thus whether plaintiff became a holder in due course before maturity** becomes an issue of fact under the pleadings. If plaintiff was not such holder of the respective notes, it stands in the shoes of its indorser as to any defense which would have been available against plaintiff's indorser.
The circuit judge was in error in granting plaintiff's motions in the respective cases for judgments on the pleadings, and he was also in error in denying defendant's subsequent motions to set aside the respective judgments. The rule governing entry of judgment on pleadings has been stated in substance as follows:
"Court may enter judgment on pleadings where they disclose unconditional admission of liability for amount for which judgment in entered." Detroit Trust Co. v. Smith (syllabus),256 Mich. 376.
The judgments entered in the circuit court in the respective cases are set aside, and the cases remanded for further proceedings not inconsistent herewith. Appellant will have costs of this Court.
BUSHNELL, C.J., and SHARPE, BOYLES, REID, DETHMERS, BUTZEL, and CARR, JJ., concurred.
* See 2 Comp. Laws 1929, § 9275 (Stat. Ann. § 19.68). — REPORTER.
** See 2 Comp. Laws 1929, § 9301 (Stat. Ann. § 19.94). — REPORTER. *Page 640