Court Opinion

ID: 6691223
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:38:04.935786+00
Date Added: 2024-06-11T16:01:06.998736
License: Public Domain

DILLON, J.
(dissenting). This is an action brought to recover on certain promissory notes, and has been before this court on a former appeal. Commercial Credit Co. v. Nissen, 43 S. D. 564, 181 N. W. 99. In this opinion this court reversed the judgment of the lower court and granted a new trial on the grounds of newly discovered evidence. The facts of the case are thoroughly reviewed in the former opinion. The newly discovered evidence had to do with an action in Iowa on the whole transaction against defendant by a bank, representing payee tractor company. In this action defendant’s liability was determined on the theory that the contract was indivisible, and the notes in suit were excluded as, outstanding. The verdict of the lower court on the first trial in this state was directed for defendant on the theory that the 50-transactions were separable. In the second trial appellant completely abandoned his alleged newly discovered evidence, and the two questions now before this court are whether or not the notes were negotiable in South Dakota, and, if so, whether or not there was a want of consideration.
*309The evidence shows that plaintiff purchased these notes with full knowledge that defendant had a valid counterclaim against the Interstate Tractor Company for more than $15,000, and that plaintiff, therefore, was not a bona fide purchaser of said notes. The evidence also shows that plaintiff has received the check of the Interstate Tractor Company to take up the notes in suit, and that it has in its possession other securities in excess of the amount actually paid by plaintiff to Interstate Tractor Company on the note in suit.
Appellant has set'out some 14 assignments of error, all having to do with the negotiability of the notes and the consideration. The “negotiability” of the notes is involved in assignments 1-14, inclusive, and the question of whether or not there was a want of consideration is involved in assignments N!os. 5, 7, 9, 11, 12, 13 and 14. In its brief appellant has argued the two questions separately and without reference to certain assignments or specifications of error. I will therefore follow the same plan, and' will first take up the question of whether or not the notes were negotiable in South Dakota.
There was a stipulation in the notes to the effect that “this note is an Iowa contract, to ibe construed according to the laws oil Iowa.” These contracts, therefore, must be governed by the laws of Iowa. First National Bank of Sibley, Iowa, v. Doeden, 21 S. D. 40, 113 N. W. 81:
“The law of the place where a contract is made and is to be performed governs as to its construction, validity, and enforcement.”
It is settled law in this state that the law of a sister state must be proven, and, in the absence of such proof, it will be presumed to be the same as the law of this state. Morris v. Hubbard, 10 S. D. 259, 72 N. W. 894; Meuer v. C. M. & St. P. Ry. Co., 5 S. D. 574, 59 N .W. 945, 25 L. R. A. 81, 49 Am. St. Rep. 898; Sandmeyer v. Dakota F. & M. Ins. Co., 2 S. D. 350, 50 N. W. 353; Iowa Loan & Trust Co. v. Schnose, 19 S. D. 248, 103 N. W. 22, 9 Ann. Cas. 255; Foss v. Petterson, 20 S. D. 93, 104 N. W. 915; Commercial Bank v. Jackson, 7 S. D. 135, 63 N. W. 548.
Section 3869, c. 15, Code of Iowa, was introduced in evidence by plaintiff, which read as follows:
*310“Attorney’s Fees — When Taxed as Costs — Amount. When judgment is recovered upon a written contract containing an agreement'to' pay an attorney’s fee, the court shall allow and tax as a part of the costs, on the first two hundred dollars or fraction thereof recovered ten per cent.; on the excess of two hundred to five hundred dollars, five per cent.; on the excess of five hundred to one thousand dollars, three per cent.; and on all sums in excess of one thousand dollars, one per cent. If action is commenced and the claim paid off before return day, the mount shall be one-half of the sum above provided, and if it is paid after the return day but before judgment, three-fourths of said sum; but no fee shall be allowed in any case if an action has not been commenced, or expense incurred, nor shall any greater sum be allowed, any agreement in the contract to the contrary notwithstanding.”
The stipulation in the notes pertaining to attorney’s fees reads as follows:
“The makers, indorsers, guarantors, and sureties agree to pay any attorney’s fee as provided by the laws of Iowa in case note is not paid at maturity, and consent that any justice of the peace shall have jurisdiction of action brought hereon to the amount of three hundred dollars, and also severally waive protest and diligence in bringing suit hereon.”
According to the laws of Iowa, therefore, this stipulation is valid and binding upon the maker of these notes. However, it is immaterial whether or not this stipulation would be enforced in the courts of this state in determining whether or not the notes were negotiable. In Baird v. Vines, 18 S. D. 52, 99 N. W. 89, this court held, as shown by the syllabus, that “a stipulation in a note' as to attorney’s fees does not render it nonnegotiable.” It was proven that the stipulation in the notes as to attorney’s fees was valid in Iowa, and therefore the provision of the law in this state that an agreement in a promissory note for an attorney fee is unenforceable and void cannot obtain in this case.
Section 1705, p- 386, vol. 1, R. C. 1919, is the Negotiable Instrument Act, and contains the following provision:
“2. Must contain an unconditional promise or order to pay a sum certain in money.”
Section 1706, R. C. 1919, reads as follows:
*311“Sum Payable Must be Certain. The sum payable is a sum certain within the meaning of this part, although it is to be paid first, with interest, or, second, by stated installments, or, third, by stated installments, with a provision that upon default in payment of any installment, or of interest the whole shall become due, or, fourth, with exchange, whether at a fixed rate or at the current rate.
“Provided, that nothing' herein contained shall be construed to authorize any court to include in- any judgment on an instrument made in this state any sum for attorney’s fees, or other costs not taxable -by law.”
Section 1709 reads as follows:
“When not Negotiable. An instrument which contains an orUei or promise to do an act in addition to the payment of money is not negotiable.”
The law in force in South Dakota previous to the enactment of the Negotiable Instrument Act had not been materially changecU so far as is applicable to this case, and the decisions of this court previous to the enactment of the present law are binding upon this court. Nat. Bank of Commerce v. Feeney, 12 S. D. 156, 8o N. W. 186, 46 L. R. A. 732, 76 Am. St. Rep. 594; Hegeler v. Comstock, 1 S. D. 138, 45 N. W. 331, 8 L. R. A. 393; Merrill v. Hurley, 6 S. D. 592, 62 N. W. 958, 55 Am. St. Rep. 859; Stebbins v. Lardner, 2 S. D. 135, 48 N. W. 847; Davis v. Brady, 17 S. D. 511, 97 N. W. 719; Sharpe v. Shoenberger, 44 S. D. 402, 184 N. W. 209. The stipulation in the notes, “principal or interest if not paid when due shall bear interest at 7 per cent, per annum, payable annually,” presents the agreement that the note shall draw interest at 7 per cent., but that, if paid when due, it shall draw no interest. Thus the element of uncertainty enters in; the amount required to discharge this note being' uncertain at the time the note was given, and, such being the -case, I think it should be held that the notes in question were nonnegotiable- in South Dakota, and the judgment of the lower court should be affirmed.