Court Opinion

ID: 8192763
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:15:52.805982+00
Date Added: 2024-06-11T16:40:39.726652
License: Public Domain

Winslow, C. J.
It is undisputed that the defendant sent its check for $5,000 payable to the order of Mrs. Sarah M. Passmore, the president of the Anchor Grain Company, on June 27, 1914. It is also undisputed that the check was sent to Mrs. Passmore as the immediate result of a conversation had by Mr. A. F. Brenner, vice-president of the company, with Mr. Riebs, treasurer of the defendant, at Milwaukee on the same day, and that m> note or acknowledgment of indebtedness was ever received by the defendant from the Grain Company, but that Mr. Brenner gave his individual note therefor. It further appears that the money *593was credited to Brenner’s account, which was then overdrawn on the books of the Grain Company, and charged against Brenner on the books of the defendant company. Mr. Brenner also testified that he borrowed the money on his individual account.
The first claim of the plaintiff is that on this evidence and some other evidence of minor importance a verdict for the plaintiff should have been directed, because it is proven without substantial dispute that the loan was a loan to Brenner and not to the Grain Company.
In this connection the plaintiff makes the additional claim that, even if there were evidence in the case which would sustain a finding that the loan was made to the Grain Company, still there was no evidence to meet the well-understood presumption that when the note of a third person is received for an indebtedness contracted at the time, it is received as payment of, or, as it is sometimes said, in exchange for, the goods sold or money advanced. Challoner v. Boyington, 83 Wis. 399, 53 N. W. 694.
We are unable to agree with either contention. It clearly appears from all of the evidence in the case that Sarah M. Passmore was not merely the president but the active managing officer of the Anchor Grain Company as well as of the Mann-Anchor Company, who, with the consent of the directors, exercised full authority in all business transactions of either company. Mr. Riebs, the defendant’s treasurer, testified directly that in the month of June, before the advance was made, Mrs. Passmore came to Milwaukee, talked over the grain business for the coming year, and wanted to know if the Anchor Grain Company could obtain a loan of $5,000 or $10,000 from the defendant in case they needed it to handle the expected large crop; that he told her they would be pleased to accommodate her with $5,000, and if necessary would extend credit for a larger amount; that she was pleased and promised to let the defendant handle all their grain coming to Milwaukee, and said that Mr. *594Brenner would come and visit Mr. Riebs to' learn the prospects for'the future, and that the advance if made would be taken care of by allowing the credits on the cars consigned to stand until they should cover the amount of the loan. Mr. Riebs further testified that after that interview Mr. Brenner came to Milwaukee, talked about the grain situation, the large amount' of money that it would take to swing it, and wanted to know the credit which the Anchor Grain Company could get from the defendant, and was told by the witness that they could have $5,000 or $10,000; that he (Brenner) said they could use the money right now, and as the outcome of the interview the check of $5,000 was sent to Mrs. Passmore; that Mr. Brenner also said that he wanted the money for the Anchor Grain Company.
In addition to this testimony of Mr. Riebs there are in the record letters from the Mann-Anchor Company through its president and managing officer, Mrs. Passmore, written in October, November, and December, 1914, in substance acknowledging the note as the note of the Mann-Anchor Company and arranging to pay it by letting the balances due them from the defendant company on cars consigned, over and above the drafts drawn thereon, stand and accumulate until they amounted to enough to pay the note.
There is much other evidence in the record tending in an indirect way to substantiate the defendant’s claim that both parties understood that the $5,000 advance was in fact an advance to the Anchor Grain Company and not to' Brenner personally, notwithstanding the fact that Brenner’s individual note was the only written obligation given for it. The business relations of the two1 corporations were very close and friendly, the defendant corporation evidently had the' most implicit confidence, in the financial soundness and integrity of the Anchor Company and its successor, the Mann-Anchor Company, and a careful reading of the evidence impresses us with the idea that they advanced the money in question on the credit of the Anchor Company and *595expecting that company to pay it. Mr. Brenner himself testified that he looked to- the Anchor Company to take care of the loan.
Without attempting to review the entire evidence in the case in this opinion, we may say that we are convinced that there was sufficient evidence to permit the jury to find not only (1) that the loan was in fact made to the Anchor Grain Company, but (2) that the presumption that Brenner’s note was received in payment or exchange for the loan was overcome.
Perhaps it would have been better had these two questions been submitted to the jury separately, but under the instructions given to the jury the one question submitted covered both propositions. They were instructed that if they were satisfied to- a reasonable certainty by the preponderance of the evidence that the $5,000 was loaned to the Anchor Grain Company on its request and on its faith and credit and that the defendant looked to- said company and not to Brenner for payment, and that the Grain Company and not Brenner became liable to the defendant fo:r the payment of the loan, they should answer the question submitted to them in' the affirmative, and if not so satisfied they must answer it in the negative. Previous instructions had informed them in effect that the fact that Brenner’s individual note was received by the defendant tended to show that the defendant looked to him for payment, but was not conclusive and was open to explanation. Taking all the instructions together, they seem to us to have informed the jury in substance that the fact of the taking of Brenner’s note created a presumption that it was received in payment, which presumption, however, was open to- explanation or rebuttal by other facts tending to show that both parties expected and intended that the loan was in fact made to the Grain Company and was to be repaid by that company.
The application of credits was made by the defendant January 5, 1915, and the petition in bankruptcy was filed *596within four months thereafter, to wit, M¿rch 25, 1915, and the plaintiff contends that the jury should have been asked whether the application constituted either a fraudulent transfer or an unlawful preference within the provisions of secs. 67 (e) and 60 (a) (b) of the federal bankruptcy act. Proper requests were made that these questions be submitted to the jury, which were refused and exception taken.
We have been unable to' reach the conclusion that there was any evidence in the case which would have justified the submission of either question to the jury. If it be granted that there is any substantial evidence tending to show insolvency of the Mann-Anchor Company in January, 1915, there is absolutely no evidence that the defendant had any knowledge oí the fact or had any reason to believe that the application of credits would effect a preference; nor is there any evidence tending to show that the Mann-Anchor Company consented to the application with intent to hinder, delay, or defraud creditors.
So far as the evidence shows, the transaction was an ordinary business transaction between two1 going concerns, both acting in good faith and both believing themselves to be solvent. ■- j 1
In our judgment a just result has been reached in this case without prejudicial error.
By the Court. — Judgment affirmed.