Court Opinion

ID: 6688021
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:34:34.140217+00
Date Added: 2024-06-11T16:01:01.142668
License: Public Domain

WHITING, J.
(dissenting). One John G. Lund was, in the spring of 1906 and from that time down to the date of his death in the fall of 1908, engaged in the real estate business with an office at Minneapolis, Minn. From the spring of 1906 down to some time in February, 1908, he was the president of the plaintiff corporation, and during the year 1906 a member of its discount committee. In the spring of 1906 the defendant had -several interviews with Mr. Lund in relation to investing in farm lands. Hje submitted to -her what was called his profit-sharing plan, and their negotiations finally led to an offer by him to buy for her two quarter sections of land on such .profit-sharing plan. He drafted and submitted for her consideration one of the two copies of a contract which ate known in the record as Exhibits “2” and “2^2.” The defendant and Lund -on March 31, 1906, entered -into such contract. Under the terms of -such contract defendant was to'advance $1,600 in cash, but, not having yet received the returns from the sale of some property she had sold, Lund took her demand note for $1,600.
Defendant -contends that this $1,600 was the only money to be advanced by defendant, and that, under their contract, she was to' give no other note, and that none -other was in any manner suggested. The $1,600 note, together with the $700 note in suit, were negotiated by Lund with the plaintiff bank on March 31, 1906. The $700 note was a blank form which read in part: , “Promise to pay to the order of-at First National Bank of West Minneapolis.” By leaving the blank space unfilled and crossing out word “at,” the nóte was made .payable to plaintiff. It is the theory of the plaintiff that the $700 note was executed by defendant under the terms of the land contract entered into *307on March 31st; that it was executed for the purpose of procuring more money with which to consummate the purchase contemplated by -such contract; and that Lund was defendant’s agent in procuring from plaintiff the money thereon. Exhibits 2 and 2were printed forms filled out to cover the particular contract entered into. After a line wherein was stated the total purchase price of the land to be purchased ($5,500), and the fact that defendant was to pay $1,600 thereof in cash, there followed a line containing no printed matter whatever. Exhibit 2, which was the copy-retained by Lund, had written upon such blank line the following: “Note $700. Due 1 year, and assume mortgages of $3,000 and by credit $200.” Exhibit 2%, being the one the possession of which had been held by defendant, had written upon such blank line: “Note $700, $200 credit from books, and assume mortgages $3,000.” It is the theory of plaintiff that the $700 note sued upon is one and the same as the $700 note referred to in said contract, and that the credit of $200 was given by Lund to defendant in consideration of her having furnished to him a purchaser for 200 acres of other land. On the other hand, defendant contends that, as originally excuted, such contract had nothing written upon the blank line, and that, while she received a credit from Lund for having furnished a purchaser, such credit was neither earned by nor given to her until some time subsequent to March 31st, and must therefore have been unknown at that date. Defendant contends that these blank lines in Exhibits 2 and 2j^ were not filled when the exhibits were signed, and that the blank in 2% was filled without her knowledge upon June 27, 1906, upon the occasion of a visit by her to the office of Lund, at which time she claims to have left Exhibit 2% in Lund’s outer office while she was entering into another contract with Lund in his inner office. She testified that a clerk of Lund’s (being one and the'.same person who drafted the contracts originally) was in the outer office where she left’Exhibit 2%, and knew.of its being there; and it is her theory that,’ while she was in the inner office, said clerk wrote into her copy what’ now appears upon the blank line for’ the purpose of creating an ápparent explanation for the existence of the $700 note which had theretofore either been forged or signature *308procured thereto by trick artifice, or sleight of hand. Defendant testified that, from the time that she left Exhibit 2% in' the outer office- when going- into Lund’s private office, she never had occasion to examine it until about June 1908, and therefore, until such time, had'no'knowledge of the alteration of such Exhibit nor any notice of the apparent existence of a note for $700 against her. The books of the Lund land office were introduced in evidence. These books tended to corroborate the plaintiff as they gave credit for the $700 note under date of March 31st.
Conceding that all the evidence offered and received, with the exception.of that hereinafter referred tp, was properly received, it was such as was readily susceptible of either of two constructions; finder one of which the -transactions, out of which the notes appear to have sprung, would be such as would tend to show the notes to be the -contracts of defendant and valid in' the hands of plaintiff, under the other of which the transactions, out of which the plaintiff claims the notes to have sprung, would appear tainted with fraud, the notes never to> have had legal existence, no consideration for the giving of the notes to have existed, and the plaintiff not a good-faith purchaser without notice of defenses. The construction which the jury would -place upon the proof submitted would,' from the very nature of the issues raised and the contention of the respective parties, naturally depend largely upon the juror’s views as tb the honesty and integrity of Lund, -thus rendering very prejudicial any incompetent testimony, received under the sanction of the rulings of tire trial court, in-any manner reflecting upon the business methods of said Lund, or tending to prove ány 'admissions made by him.
Defendant was allowed to testify concerning a statement which she claimed Lund -made -to' her in June, 1908, which statement would clearly tend to corroborate defendant in her claim that she never executed the $700 note. Juñe, 1908, was after Lund sold out his interest in the plaintiff. The admission of this last evidence tends to show that -it must have been the theory of the trial court that'any-evidence of what Lund -said or did in relation to the notes 'or the land transactions with which they were supposed to be connected, no' matter if such statements were later in *309date to, and entirely unconnected with, the execution of the notes, was competent to prove the invalidity of such notes. It must be remembered that we have not presented to us a question of the competency of a party’s statements if received from his lips while a witness upon the stand in this case, nor a question as to the admissibility of statements in' derogation of his title to property by one then in possession of such property, nor a question of the admissibility of 'statements made by one shown to be a co-conspirator with the party against whom the evidence was offered, but solely whether one can testify as to statements made by another, which statements cannot be deemed admissions of the party against whom received. If Lund had made a statement to some party not interested in this action, which statement was made long after the dates of the notes in suit, and in such statement he had specifically set forth the forgery of the notes and detailed the methods used to accomplish the forgeries, under what possible rule of law would it have been competent to call the party hearing such statements and receive his testimony in relation to same"? Respondent has cited some authorities which she claims announce rules admitting such evidence, but an examination of the same show that they are entirely foreign to- the question presented.
My colleague, in the majority -opinion herein, calls attention to the one case where evidence of such statements is admissible, namely, where a note has been transferred for the sole and fraudulent purpose of defeating some meritorious defense. In such case, any 'statement made by the fraudulent transferor, after such transfer, is admissible -against the holder of the note, upon the theory that the transferror is yet the real owner of the note and has no application whatsoever except in a case where there has been a purported assignment of the note. See cases cited in majority opinion. That this rule has no application to the facts in this case seems to me perfectly -clear, and for two reasons: (i) This cause was tried by the trial court, as evidenced by its instructions to the jury, upon the theory that this note should in every respect be treated as a note running to plaintiff as payee and in relation to which no question of transfer by Lund was involved. It is clear that the rule laid down in the majority opinion has *310absolutely no application except where the statements offered in evidence were made by one who was at one time the owner 'of the note and has passed title to such note for a fraudulent purpose. In view of the instructions of the court, we would have no right to apply such rule to this case for the purpose of sustaining the judgment. (2) Conceding, however, that Lund was the real payee of this note, and that he had put the title to the same into the name of plaintiff in order to defeat some feared defense, meritorious or otherwise, while the bank so held the note, Lund being the real owner, any statements made by him would be admissible in a suit by the bank on the note. But if Lund should afterwards part with all interest in the note, and it should be held by the transferee not for the purpose of cutting out some feared defense, but as the real owner thereof, from, that moment any statements by.Lund impugning the validity of such note become inadmissible in evidence except as they fall from the lips of Lund when a witness in court. In this case, whatever interest Lund ever had in such note, if he had any, passed from him when he sold his interest in the bank, which sale was several months before it is claimed he made the alleged statement.
In McKean v. Adams, cited in the majority opinion, the time rule is recognized that admissions of transferror are admissible when transfer is merely colorable; that case citing Paige v. Cagwin, 7 Hill (N. Y.) 381, wherein it was said: “When such is the fact, there is no change of ownership. The party by whom the transfer is made is still the party in interest; and his declarations are clearly admissible.” In Gardner v. Barden, also cited in majority opinion, it is held, as appears by the headnotes: “The declarations of an assignor are admissible against his. assignee only where the interests of the parties remain unchanged by the apparent transaction and an identity of interests exists between the assignor and assignee.” To same effect is Milliner v. Lucas, 3 Hun (N. Y.) 456. The holding in Holmes v. Roper and in Encly. of Evi., both cited in majority opinion, are exactly in line with the cases referred to above. The cases from Massachusetts and Michigan, as well as the two South Dakota cases cited by my colleagues, are cases in which the rule announced by my colleagues had no ap*311plication whatever; in .the South Dakota cases this rule was in no manner referred 'to, and in the other cases, while recognized, it was held not applicable to facts proven.
Not only was evidence such as that mentioned above received, but evidence of matters absolutely unconnected with either of the notes and of a nature showing that it must have been offered solely to impugn the honesty of Lund was received. Defendant was allowed to testify in relation to one of the pieces of land described in Exhibit 2J2. “He (Lund) sold it in May, 1907, and he never reported the sale, and, when I began to look him up in 1908, I discovered it had been sold but no report made of it.” She was allowed to .testify”- that Lund never made any purchase of land for her in compliance with a later contract entered into between them, though such fact was absolutely immaterial to any issues raised. Miss Beam was allowed to testify to receiving, in January, 1908, a letter from a clerk in Lund’s office, advising her that there were rumors afloat that Lund was about to fail, and advising her, if she had any money with him, to get it at once. There are other errors in the admission and also in the rejection of evidence which I do not feel called upon to refer to. It surely cannot be claimed that the wrongful admission of the evidence above referred to was not prejudicial.
When we consider .that the case made by 'the evidence of defendant, especially in so far as the obtaining of the signatures to the notes by fraud, trickery, etc., was, at the best, very speculative and conjectural, it was certainly grave error to allow, the same to . be bolstered up (saying nothing as to the bolstering up of the claim of forgery, lack of consideration, and that plaintiff was a purchaser with notice of defenses), by evidence such as this, which evidence the court, by receiving, virtually told the jury was competent and material and to be considered in reaching a verdict.