Court Opinion

ID: 6569525
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:22:49.722454+00
Date Added: 2024-06-11T15:56:51.562735
License: Public Domain

Mr. Justice Campbell
dissenting:
Action by the payee against the maker of a promissory note. Defendant admits execution, delivery and nonpayment. The affirmative defense is lack of consideration. The evidence is uncontradicted that the defendant received *127nothing of value directly from the plaintiff or his'assignor. If there was a consideration, it arose out of the following facts: One Williamson subscribed for capital stock of an irrigation corporation of which the defendant was president. Plaintiff Retallic, assignee of Williamson, says that as a part of the contract of subscription, and as one of the inducements for the purchase, the defendant gave, and endorsed on the stock certificate, his personal guaranty against loss to the subscriber by promising, to take up the stock at the end of three years, if the subscriber so elected, apparently by returning the amount of the purchase money. This action is by Retallic, as assignee of the certificate in question. At the time of the subscription contract Retallic was not known to the defendant, but Williamson claims that Retallic was, from the first, interested with him and was a part owner of the purchased stock. Retallic died before the trial and his administrator was substituted as plaintiff. The death of the assignee probably accounts, in part, for the absence of definite evidence as to all the facts concerning the transaction.
For the purposes of this case we assume, but do not decide, that the alleged guaranty was not personal to Williamson, and that such rights as Williamson had are vested in Retallic. The guaranty contract was endorsed upon the certificate of stock at the time of its issuance. No witness pretends to give its language. Williamson is the only witness who purports to testify as to its contents. He does not pretend to give the words, but merely his summary or conclusion, that it was a “plain guaranty” to the subscriber against any. loss as above stated. The defendant testified that the corporation was an existing corporation, that Williamson knew that his subscription was made to the corporation, that defendant never owned the stock or represented himself as the owner, that the money for the stock was paid to, and used by, the company in its business, that the defendant received no commission or any other consideration for his services in making the sale, but was acting solely in his official capacity as presi*128dent, and in behalf, of the company. He further testified that he does not recollect the wording of the promise endorsed on the certificate but that it was intended to be, and was, the promise of the company itself and did not purport to be, and was not, his individual contract. In other words, the only two witnesses who have spoken on the subject — Williamson for the plaintiff, and the defendant for himself — are in direct conflict. Williamson says that, although he became a subscriber for this stock and it was issued to him by the company, the guaranty against loss was by the defendant in his individual capacity. The defendant says that whatever promise was made was a part of the subscription contract and was made by, and became binding upon, the company and not upon him. It is true that in a letter to Williamson the defendant does speak of his personal guaranty. This letter the court refused to admit in evidence, but in their briefs the parties seem to have treated it as part of the proof, and we shall so consider it. Such being the state of the record, we must accept the finding of/the court that the defendant did not make this alleged guaranty, but that it was the contract of the corporation, the owner of the stock, which issued the certificate to the plaintiff and received payment therefor.
While this is a suit upon a promissory note, by the payee against the maker, which is a renewal of a previous note, there can be no recovery upon the same, if the testimony in the record shows the defendant received no consideration for it, or the original. That the defendant gave to Retallic his promissory note, on which he had made payments, for the amount that Williamson paid for the stock, might tend to show recognition of liability under a guaranty contract. The defendant started to explain at the trial why he gave the note and made payments thereon from time to time, but, .upon objection, was not permitted to do so. Whatever may have been defendant’s reason, he is not precluded from insisting upon his defense of a lack of *129consideration. As already stated, the ground upon which the plaintiff claims that a consideration for the note passed to defendant, is that the latter made his personal guaranty to the subscriber of stock against loss for the purchase, to which rights plaintiff succeeded, and that such liability furnished the consideration for his giving of the note to Retallic. If, as the court found, the defendant did not make the guaranty, he is not personally, or individually, liable to any of these parties, either on the alleged guaranty, or on the note. The court, having found against the plaintiff on his claim that the defendant executed the guaranty contract, the execution and delivery of the note by the defendant to the plaintiff Retallic was not supported by any adequate or sufficient legal consideration. As additional, or part of the same, consideration, plaintiff says that the return of the stock certificate by Retallic to defendant is a consideration for the note. Defendant denies that this certificate was sent to, or received by, him in his individual capacity. He has no recollection of ever having received it, or as having seen it, but, if it was sent to him, it was sent to him as the representative of the company, and was received by the company.
The burden of showing no consideration is on the defendant. When he testified that he had received nothing of value, of any sort from plaintiff or his assignor Williamson for the note, but it was given wholly voluntarily, the burden shifted. The plaintiff then, to support his replication, sought to show that he had, within the three years’ limit, elected to receive the purchase money. We find no evidence at all that the election was made within the time required. That, of itself, is enough to defeat the action.
Other alleged errors of the court in rulings on the evidence are not material in view of the finding of the court, which we have sustained. Even had the witness Williamson answered all the questions, which the court disallowed, favorably to the plaintiff, such evidence would not have *130justified a judgment for plaintiff. Various other questions, which might have been important, had the defendant executed this guaranty, are not properly before us for determination. We observe, if the alleged contract is a “plain guaranty,” it might be assumed, in the absence of its exact wording, that the principal contract to repurchase was made by the corporation. Hence the complaint may not state a cause of action against defendant on that theory. But we do not consider this material.
An additional reason for affirming the judgment is that there is no evidence in the record that the alleged guaranty was signed by the defendant in his individual capacity. The only claim made is that there was endorsed on the stock certificate something which the plaintiff construes as a guaranty. If it was not signed by defendant, and there is no evidence that it was, the guaranty could not be enforced against him. As the findings of the court were upon conflicting evidence and the evidence was legally sufficient to sustain them, we think the judgment should be affirmed. If it was error to exclude the defendant’s letter it was, in view of the court’s findings, harmless error. The only tendency of the letter was to contradict the defendant’s testimony given at the trial that he did not sign the guaranty. It was the province of the court to pass upon the credibility of the witnesses.
For the foregoing reasons we dissent from the opinion of the majority, and think the rehearing should be granted.
Mr. Justice Allen concurs in this dissent.