Court Opinion

ID: 7047219
Source: CourtListenerOpinion
Date Created: 2022-07-24 06:56:21.55167+00
Date Added: 2024-06-11T16:11:35.073187
License: Public Domain

Howk, J.
This was a suit by the appellee, as endorsee, against the appellant, as the maker, of 'a promissory note payable to order, in a bank in this State. In his complaint, the appellee alleged, among other things, that before the maturity of the note he purchased the same, in good- faith, of the payee thereof, paying therefor a valuable consideration, and that the note and the interest thereon were due and unpaid. The cause was put at issue and tried by a jury, and a special verdict was returned, in substance, as follows:
“ 1st. We, the jury, find that the note sued upon was executed by John J. Scotten, November 25th, 1881, in favor of William G. Watkins, and assigned by endorsement to the plaintiff on the 30th of .Novembér, 1881.
“ 2d. And we further find that at the time of the assignment, the plaintiff had no knowledge of any fraud in the transaction, or of any defence against said note.
*583“ 3d. And we further find that at the time of assignment, Randolph did not know what the note was given for, and did not know there was any want of consideration for said note.
“4th. We further find that said note was assigned before it was due, and for a valuable consideration.
“ 5th. If, upon the facts, the law is with the plaintiff, then we find for the plaintiff, and assess his damages at the sum of three hundred and seventy-six dollars. And if the law is with the defendant, then we find for the defendant.”
Upon the foregoing special verdict, the court rendered judgment for the appellee, the plaintiff below, for the amount found'due on the note in suit. The appellant excepted to the judgment, and, his motion for a new trial having been overruled, he has appealed from such judgment to this court.
The first error complained of, in argument, by the appellant’s counsel, is the overruling of his motion for an order requiring the appellee to answer more fully certain interrogatories, filed with appellant’s answer, as requested in such 'motion. The appellant’s motion for such an order was a motion in relation to collateral matters, and, under the provisions of .section 650, R. S. 1881, it did not constitute a part oí the record, unless made so either by a bill of exceptions or by an order of the court. In this case, the appellant’s motion was not made a part of the record in either of the modes prescribed by the statute. It follows, therefore, that the appellant’s motion and the ruling of the court thereon were not properly saved in the record, and the error complained of presents no question for our decision.
Appellant’s counsel next insist that the trial court erred in sustaining appellee’s demurrer to the,fourth paragraph of appellant’s answer. In this fourth paragraph of answer, the appellant alleged, in substance, that the consideration for which the note in suit was given had wholly failed, in this, that the payee of the note, William G. Watkins, was engaged in the marriage-dowry insurance business, and that the *584only consideration agreed upon by the payee and appellant-for the note was that the Allen County Marriage Benefit Association should issue and deliver to appellant a cei’tificate for one hundred and twenty shai’es of stock, within thirty days from the date of such note, as shown by “ Exhibit A,” filed with and made part of said paragraph of answer; that no such coi’tificate was so issued' by said association, or delivered to appellant, and that appellee had knowledge thereof before he received the note in suit. Wherefore, etc.
“ Exhibit A,” which is filed with and made part of the fourth paragraph of answer, is in the words and figures following, to wit: “ Receipt for application and payment of first assessment on stock. Huntington, Ind., November 20th, A. D. 1881. Received of J. J. Scotten an application and the sum of 360 dollars, being first assessment on 120 shares of benefit stock in the Allen County Marriage-Benefit Association, of Fort Wayne, Ind. It is agreed and understood that should said association neglect or fail to issue a certificate therefor within thirty days from the date of receiving application, the amount herein named shall be returned to said applicant. Applicant will please notify the secretary should the certificate not be received within thirty days from date thereof. (Signed) . Wm. G. Watkins, Agent.”
We are of the opinion that the court erred in sustaining appellee’s demurrer to the fourth paragraph of appellant’s answer. Upon the facts alleged thei’ein, if they are true, and the demurrer admits their truth, it is clear that the consideration of the note in suit, if it ever had any legal consideration, had wholly failed at the time and before the appellee received the same, of which failure he then had knowledge. It is time that the note in suit, under the provisions of section 5506, R. S. 1881, in force since July 5th, 1861, was negotiable as an inland bill of exchange, and that the payee and endorsee thereof might recover, as in case of such bills. It is true, also, that the purchaser and endorsee for a valuable consid*585eration, before maturity and without notice, of such a note as the one in suit, will take such note free from any equities or defences which might exist as between the maker and payee thereof. Murphy v. Lucas, 58 Ind. 360; Zook v. Simonson, 72 Ind. 83; Ruddell v. Fhalor, 72 Ind. 533 (37 Am. R. 177); Coffing v. Hardy, 86 Ind. 369.
It is certain, we think, that the facts stated in the fourth paragraph of answer would have constituted a complete defence to any suit on the note by Watkins, the payee thereof. When it was alleged that the appellee, as endorsee of Watkins, before he received the note in suit, had knowledge of the facts constituting the appellant’s defence to any action brought by Watkins, the payee of the note, the paragraph of answer became a good defence to appellee’s suit on the note. But the appellee’s counsel say that the paragraph was bad, because “ the complaint alleges that the note was endorsed to appellee for a valuable consideration, before maturity, and in good faith.” Counsel italicize the words “good faith;” but the averment that the note was endorsed in good faith is hardly the averment of a fact. It is, as it-seems to us, the averment of a conclusion which the law might, or might not, draw from the facts attendant upon the endorsement of the note. If the appellee had received the note, as its endorsee, in the ordinary course of business, for value, before maturity and without notice of any equities or defences existing between the maker and the payee thereof, the legal conclusion from these facts would be that the appellee was the holder of the note in good faith. Under the civil code facts must be pleaded ánd not conclusions of law. Section 338, R. S. 1881. Besides, it can not be said, we think, that the averment of “ good faith ” is equivalent to the averment that the endorsee took the note without notice of the maker’s defences.
It is claimed by appellee’s counsel that “this paragraph is • bad and might have been struck out, for the further reason that the same defence was raised by the second and third par*586agraphs.” In this position we think counsel are mistaken. The substance of the second paragraph of answer was that the note in suit was obtained from, appellant by certain false and fraudulent representations; and in the third paragraph it was alleged that the note was executed without any consideration therefor. The fourth paragraph of answer, as we have seen, stated as a defence to the suit that the consideration of the note had wholly failed. We can not hold, therefore, that the error of the court in sustaining the demurrer to the fourth paragraph of answer was a harmless error, or that the appellant was not inj ured thereby; because it is clear’ that evidence which would have fully sustained the fourth paragraph might have wholly failed to sustain the allegations of either the second or third paragraph of the answer.
“ Finally,” appellee’s counsel say, “ the fourth paragraph of answer was bad, for the reason that the plea refers to and makes a certain paper an exhibit which was not filed with the paragraph.” A copy of the same paper, as “ Exhibit A,” was filed with and made part of the second paragraph of answer, and appears in the record immediately following the third paragraph of answer. The same copy of the same paper, by the same description, was made part of the fourth paragraph; but only one copy appears in the record. Upon the point now made by appellee’s counsel, in Maxwell v. Brooks, 54 Ind. 98, this court said : “ Where more paragraphs than one are based upon a written instrument, each professing to set out a copy, one copy is sufficient. To require more would subserve no good purpose, but would unnecessarily increase expense and encumber the record.”
The demurrer to the fourth paragraph of answer ought to have been overruled.
Appellant’s counsel also complain of the decision of the court in sustaining appellee’s motion to strike out his cross complaint. The record fails to show that either the motion or the cross complaint was made part thereof by a bill of *587exceptions or by an order of the court. Where a pleading or a part thereof is struck out below, it will thereafter constitute no part of the record of the cause unless it is made a part thereof by a bill of exceptions or by an order of court. This rule is settled by many decisions of this court. School Town of Princeton v. Gebhart, 61 Ind. 187; Berlin v. Oglesbee, 65 Ind. 308; Peck v. Board, etc. 37 Ind. 221. The error, therefore, if it be such, is not properly saved in the record, and is not considered.
Filed Oct. 31, 1883.
Petition for a rehearing overruled June 21, 1884.
The other errors complained of arise under the alleged error of the court in overruling the motion for a new trial, and as they may not occur again, we need not now consider them.
The judgment is reversed, with costs, and the cause remanded, with instructions, to overrule the demurrer to the fourth paragraph of answer, etc.