Court Opinion

ID: 8189353
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:12:13.11003+00
Date Added: 2024-06-11T16:40:32.924645
License: Public Domain

Timxikt, J.
(dissenting). With that part of the decision holding that the plaintiffs toot the note in question subject to all defenses available by the mater against Ellis and which would go to defeat the instrument I am in accord. But I consider it a serious menace to commercial paper and in breach of the rule of law, hitherto well upheld in this state, which forbids the reception of parol evidence to vary or contradict a written contract, to admit for the purpose of defeating the note the defense here pleaded and .attempted to be proved by the testimony of the defendant Boyd. There is no doubt about the rule of law which should be applied. It is found in the prior decisions of this court and in sec. 1675 — 16, Stats. (Supp. 1906) :
“Every contract on a negotiable instrument is incomplete and revocable until delivery of the instrument for the purpose of giving effect thereto. As between immediate parties, and as regards a remote party other than a holder in due course, the delivery, in order to be effectual, must be made by or under the authority of the party making, drawing, accepting, or indorsing, as the case may be; and in such case the delivery may be shown to have been conditional, or for a special purpose only, -and not for the purpose of transferring the property in the instrument. . . . And, where the instrument is no longer in the possession of the party whose signature appears thereon, a valid and intentional delivery by him is presumed until the contrary is proved.” Sec. 1675 — 16, supra; Hodge v. Smith, 130 Wis. 326, 110 N. W. 192, and cases cited; Thomas v. Watkins, 16 Wis. 549; McLean v. Nugent, 33 Wis. 353.
It must be borne in mind that this action is by an indorsee of a promissory note negotiable in form and against the in-*251dorser, Ellis, and the maker, Boyd. The answer of the defendant Boyd avers:
“Thereupon said Ellis offered to take a note for said sum of $2,500 and renew it twice for a period each time of six months, and that, if said defendant Boyd was not ready or inclined to pay for said stock, he, the said defendant Ellis, would take the stock and return and cancel the defendant Boyd's note, and under these circumstances, and pursuant to-this agreement, said defendant Boyd did sign and put into the possession of said defendant Ellis a writing in the form, of a promissory note for $2,500, running six months from October 17, 1902, and at the expiration of said six months-the same was surrendered and a new note for another period of six months delivered to said defendant Ellis, and at the-end of said second period a new one for the same amount and running six months was put in the possession of said Ellis, and that the last one so put in the possession of said Ellis is the instrument for the payment of which this action is brought.”
The oral testimony of the defendant Boyd quoted in the-majority opinion was given in answer to the following question: “Q. Will you state'the facts and circumstances connected with the execution of that note?” To this he answered, showing that, in urging Boyd to take some of his-mining stock, Ellis said: “I can carry it with the hank. I will carry it eighteen months if you will pay the interest.”' Boyd answered: “Suppose at the end of the eighteen months-I can’t pay it ? ” Ellis: “Then I will take it off your hands, hut I am sure that you will have realized enough on it to-pay it and make a good profit.” Boyd: “I don’t see any reason why you should do that for me.” Ellis: “I know you have heen up against it pretty hard, and I would like to see you make some money.” Boyd: “That is very friendly of you, and I will accept the offer.”
In the foregoing quoted testimony it is not quite clear-when the word “it” represents the mining stock and when the note. But, taking the further testimony of the same witness, it is apparent that in the expression, “I can carry it *252•with the bank. I will carry it eighteen months if you will 'pay the interest,” “it” refers to the note. Changing to the narrative form, the witness testified: “And in that case I took the stock conditionally, and signed the note which he was to renew twice, and at the expiration of the eighteen months if I didn’t want the stock he would take it off my hands.” He further testified:
“The agreement was that they kept the shares of stock as collateral to the note. They were not in my physical possession. At the expiration of the first note I paid the interest and renewed the note, and at the expiration of the second note I paid the interest and gave a new note. I only know that . . . Ellis would take care of it [the note] at the hank. He told me he would take care of it at his bank. ■Q. Did you understand from J. S. Ellis, when the first note was given, that he was to put it in the bank? A. Yes, sir. Q. Did you understand, when the second note was given, that it was to be carried by the bank? A. I understood that the whole loan was to be carried by the bank.”
Again on another subject:
"Q. Did you give the third note — that one here involved —before or after you received the letter that your counsel has? A. After I received that letter. . . . My recollection is that I held the note until I heard from him.”
This letter is in evidence, and is as follows:
“Eeieed T'im: Your letter came this a. m. and under my agreement with you I must carry this paper for six months yet — if you do not want the stock at that time I will accept it in payment of the note. I think though that you will want the stock. Yours, J. S. Ellis.”
After thus setting forth the pleading and evidence it seems .■superfluous to say that not only was the presumption of a valid and intentional delivery created by sec. 1675 — 16, supra, not overcome, but there was affirmative proof of the' delivery of the note as a note and to be in force and effect as a note. Could defendant Boyd avoid the force of his own undisputed testimony that he withheld delivery of the last *253renewal note, the note in suit, until he received the letter above quoted, and then upon receipt of this letter delivered the note? If he could not, then the case is ruled by Perry v. Bigelow, 128 Mass. 129; Racine Co. Bank v. Keep, 13. Wis. 209; and Hubbard v. Marshall, 50 Wis. 322, 6 N. W. 497.
The majority of the court seem to have overlooked the force and significance of this undisputed evidence regarding the delivery of the note in suit. But, examining the ease without this letter, there was a delivery of the note. The agreement to pay interest and the payment of interest,, the agreement to renew and the renewals pursuant to that agreement, are consistent only with absolute-delivery. The agreement that the payee should carry .the note at the bank even where the payee owned the carrying bank means that the note was considered by the parties to have been delivered. . All of these are inconsistent with nondelivery or with conditional delivery. Again, in the light of the additional testimony above quoted interpreted in harmony with the pleading, the whole testimony of Boyd is plainly to the effect that it was orally agreed that he should give his note for $2,500 for certain shares of mining stock to be held by the seller as collateral security to that note, that the note was to run six months and to be twice renewed, Boyd to pay interest thereon and to have the right to avail himself of any rise in the price of the stock in the meantime, but if he did not during or at the end of the eighteen months avail himself of this right to take the shares, Ellis was to lake- or keep the stock and cancel or discharge the note. There is here no evidence of nondelivery or of conditional delivery, but rather evidence showing delivery coupled with an oral agreement that the note should be discharged or paid in a certain manner differing from that specified in the instrument itself. Burke v. Dulaney, 153 U. S. 228, 14 Sup. Ct. 816; 8. C. in court below, Dulaney v. Burke, 2 Idaho, 719, 23 Pac. 915. *254I need not Rere discuss at length the facts in the case last cited. The difference between that case and the instant case is obvious, and is emphasized in the opinion by Mr. Justice Hablan. I have no doubt the oral contract between Boyd and Ellis collateral to this note was founded upon a valuable consideration and enforceable by Boyd against Ellis. It was a sale of the shares to Boyd with an agreement to repurchase at the end of the eighteen months at the same price, at the option of Boyd. Vohland v. Gelhaar, 136 Wis. 75, 116 N. W. 869. But that is not the question here. This right of action of Boyd against Ellis did not accrue until the last renewal note became due and Boyd exercised his option, which was long after the note was indorsed to the bank of which the plaintiffs are receivers. Sec. 2606, Stats. (1898), and cases in note, and subd. 6, sec. 4258, Id.
Keewiw, J. I concur in the foregoing dissenting opinion of Mr. Justice Timlin.