Court Opinion

ID: 6736861
Source: CourtListenerOpinion
Date Created: 2022-07-20 23:19:08.611535+00
Date Added: 2024-06-11T16:01:48.863383
License: Public Domain

Spalding, Ch. J.
( dissenting). While disposed to think it might be tbe part of wisdom for tbe legislative assembly to prohibit an official of a state bank from dealing in commercial paper taken by tbe bank, or at least from asserting a good faith purchase from the bank by himself, I am by no means clear that tbe law as it now stands considers a bank official, and particularly one who does not participate in tbe active, personal management of tbe bank, in any other light than as a stranger to tbe entity known as a bank, in such dealings; and tbe authorities cited to tbe contrary in tbe majority opinion on this question are not convincing, especially when tbe whole of each is read. But, as I deem it unnecessary to pass upon tbe merits of this case, I refrain from any expression of opinion thereon.
I am of tbe opinion that tbe decision is wrong, and I cannot concur *432therein. Plaintiff, at the time this action was brought, was president of a small bank at Knox, organized under the state law. He resided in Minneapolis, Minnesota, something like 400 miles from Knox. He had nothing to do with the personal management of the bank, but visited it two or three times per year, as suited his convenience. The man Minckler was cashier and the executive officer. The loan was made by Minckler and subsequently the note was purchased from the bank by McCarty, and, as the record stands, in the utmost good faith ■and without knowledge or suspicion, or even grounds for suspicion, of any defense in fact. On the maturity of the note, payment being refused, this action was brought to recover possession of the chattel security ; and an answer was interposed setting up, as a sole defense, total want of consideration for the note, and alleging a bad-faith purchase by McCarty.
In April, 1912, after appeal from the judgment herein, defendant submitted a motion to have the record remanded to the district court to enable him to submit a motion therein for a new trial on the ground of newly discovered evidence. That motion was argued in this court and denied, and the reason for its denial was the fact that the allegations of the affidavits on which the motion was predicated negatived the defense contained in the answer, and that, although there might be a partial failure of consideration, such affidavits showed that a defense of partial failure of consideration would be of no avail, as plaintiff would still be entitled to possession of the security for foreclosure purposes. Subsequently the case was argued on 'the merits, and this court, after very careful consideration, agreed on the disposition of it, and dismissed the appeal. A most remarkable document was subsequently filed in this court, asking a rehearing. The court decided, in view of all the circumstances, it was best to give the parties an opportunity to be heard on the dismissal of the appeal, and on the rehearing this was done. Nothing developed that was unknown to the court at the time the original opinion was written in any way tending to diminish the force of the decision dismissing the appeal. On the contrary, it seems to me that the reasons for doing so are emphasized at this time.
I shall not set out the affidavits presented, as .they are sufficiently stated in the latter part of the opinion of my learned associate. It must be borne in mind that the defense pleaded was total want of considera*433tion. Now, tbe affidavit made by tbe defendant bimself, presented to support tbe motion, states that arrangements were made with tbe bank whereby it was to advance to bim money needed for certain purposes; that it was agreed that be was to allow tbe bank a bonus of 10 per cent on tbe amount agreed on to be advanced and to pay interest in addition; that .the total sum of money wbicb was agreed on to be advanced was $1,800, and no more. Defendant adroitly ends bis own affidavit at tbis point, from wbicb bis version of tbe transaction is continued by Minck-ler. Now, tbe version given by tbe defendant bimself conflicts with and destroys tbe defense on wbicb be was standing at tbe trial in tbe district court. Tbe agreement to advance money to him was a sufficient consideration for tbe note. If be relied on a subsequent failure of consideration, or partial failure, be should have so pleaded; but tbis would have been useless to bim, because McCarty could maintain bis action if anything remained due on tbe note, or so long as it was proved that there was any consideration. I do not know bow a stronger expression could be used indicating that $1,500 was paid to tbe defendant, than was used in tbe affidavit made by Minekler, presented at the time tbe motion was made, vouched for by tbe defendant in so presenting it, wherein be says tbe bank advanced bim $1,500 in cash, and gave bim a credit on its books for $300 more. It may be that tbe affidavits do not warrant a statement wbicb was made in our former opinion, to tbe effect that defendant desired to change bis defense from want of consideration to usury. Yet, notwithstanding tbe strenuous contention of counsel that we were not justified in tbis statement, in view of tbe affidavit made by counsel bimself, we think we bad some reason for concluding that this was tbe real purpose for which tbe affidavits were made. Counsel made an affidavit in wbicb be stated that, “on tbe 4th day of April, 1912, for tbe first time tbis affiant, and also tbe defendant, discovered that there was a good, meritorious, and valid defense to tbe whole or to a, part of tbe claim of tbe plaintiff.” And in tbe same affidavit be refers to tbe knowledge of tbe plaintiff in tbis manner: “And that be knew when be took tbe same that said note was usurious. . . . That tbis defendant is ..ow able to and can and will prove, if given an opportunity . . . that be (plaintiff) knew tbe same was usurious when be took tbe same from said bank, and that be knew tbe nature of tbe note and tbe usurious character of it, . . . and these *434facts this affiant now states can be proven by the said Minckler.” But, however this may be, tbe defendant is, or ought to be, bound by his own affidavit. He has predicated his motion upon it, and upon the affidavit of Minckler and that of his counsel; and it seems to me to be trifling with justice to hold that he may blow hot for one purpose and cold for another, as the necessities of his case may require; that he may assert Minckler is telling the truth in part of the affidavit and falsifying in another portion; or that he may aver at one point in the litigation that there was never any consideration, and at his convenience change his assertion to the admission that he had received $1,800 as the consideration, and yet hold the other party bound by all the conflicting allegations of the defendant, who is bound by neither. Defendant moved himself out of court unless this court is maintained for the purpose of gratifying the curiosity of idlers who wish to submit moot questions. This is not affected by the fact that the court did not dismiss the appeal immediately after the motion referred to was made. The full force of the affidavits undoubtedly did not impress itself upon the minds of the court at that time. I quote from the 'first opinion, to which all members of this court then agreed:
“From the solemn declarations, under oath, of the defendant and his witnesses, it is clear that the defense on which he stood in the district court, on which the case was tried and judgment entered, and on which the argument of the appeal proceeded in this court, was purely fictitious, sham, and false. To reverse the judgment'now would be to permit the defendant to set up a defense, stand on it two years, through- the district court into this court, knowing all the time that it was false, get a decision in his favor on some error in the admission or exclusion of evidence relating to the false issue, mulct the plaintiff for costs, and then adopt a new theory and a new defense, and solicit the assistance of the courts to relieve him from the fraud perpetrated upon his counsel and the courts.”
“It is not a case where the defendant relied on other parties for knowledge of his defense. He knew at the time his answer was prepared that he had in fact received consideration for the note, just as well as he did when, on the 6th day of March, 1912, he came into this court- seeking to abandon his defense and substitute a new and different one, and was denied such relief. His attorneys were ignorant of the *435facts, but tbis did not relieve him from responsibility or from the duty to disclose and make the defense which he claims to have had, rather than one which he knew he did not possess. . . .”
“If courts can be played and juggled with in this manner they deserve to become subjects of ridicule and contempt. If the money of the taxpayers can be collected to maintain courts engaged in settling issues which are confessedly fictitious, every taxpayer may well protest and. every party to bona fide litigation has just ground for complaint at delay in the conduct of his litigation occasioned by the time and energy of the court being devoted to questions confessedly without merit,”
We further stated:
“In no view of this case does the verdict and judgment work injury or hardship to the defendant. The value of the property involved was stipulated by the parties to be $875,- — more than a thousand dollars less than the face of the note, and less than half the amount that the defendant confesses he received as the consideration for the note.”
A usurious note is not invalid, and plaintiff was entitled to the possession of the security if any part of the debt was due and unpaid. Appellate courts, on attention being called to the fact that questions presented are no longer concrete, decline to act on them. See: Re Kaeppler, 7 N. D. 307, 75 N. W. 253; Foote v. Smith, 8 Wyo. 510, 58 Pac. 898; Sutcliffe v. McSweeney, 102 Ga. 807, 30 S. E. 268; Meyer v. Prichard, 131 U. S. CCIX, Appex. and 23 L. ed. 961; Berry v. Des Moines, 115 Iowa, 44, 87 N. W. 747; Hice v. Orr, 16 Wash. 163, 47 Pac. 424; State ex rel. Daniels v. Prosser, 16 Wash. 608, 48 Pac. 262; Territory ex rel. Hubbell v. Dame, 13 N. M. 467, 85 Pac. 473; Bindley v. Atchison, T. & S. F. R. Co. 47 Kan. 432, 28 Pac. 201; Oscanyan v. Winchester Repeating Arms Co. 103 U. S. 261, 26 L. ed. 539; The Harry, 9 Ben. 524, Fed. Cas. No. 6, 147; State ex rel. Hahn v. Westport, 135 Mo. 120, 36 S. W. 663; Watkins v. Huff, 94 Tex. 631, 64 S. W. 682; Southwestern Teleg. & Teleph. Co. v. Galveston County, — Tex. Civ. App. —, 59 S. W. 589. Examination of these cases will disclose that they originally presented questions for determination. In the case at bar one was presented, but one which, in fact, did not exist, and this is conceded by the defense in presenting the affidavits of Kepreta and Minekler. Courts are constantly acting upon statements of counsel made on argument, waiving assignments of error contained in briefs,’ *436and concessions made by counsel that issues are narrower than are stated in their briefs, and on many, similar questions; and we see no reason why the solemn declarations of the appellant, made in the manner indicated,' should not serve the same purpose. In Oscanyan v. Winchester Repeating Arms Co. 103 U. S. 261, 26 L. ed. 539, the Supreme Court of the United States says: “The power of the court to act in the disposition of a trial upon facts conceded by counsel is as plain as its power to act upon the evidence produced.” And: “In the trial of a cause the admissions of counsel, as to matters to be proved, are constantly received and acted upon. They may dispense with proof of facts for which witnesses would otherwise be called. They may limit the demand made or the set-off claimed. Indeed, any fact, bearing upon the issues involved, admitted by counsel, may be the ground of the court’s procedure equally as if established by the clearest proof. And if, iff the progress of a trial, either by such admission or proof, a fact is developed which must necessarily put an end to the action, the court may, upon its own motion or that of counsel, act upon it and close the case.”
In Re Kaeppler, 7 N. D. 307, 75 N. W. 253, the appellant instituted, under the state law, involuntary insolvency proceedings against the respondent, who contested them. The court found in favor of the respondent, dismissing appellant’s petition. An appeal was taken to the supreme court. In the meantime respondent himself filed a voluntary petition in insolvency proceedings, and thereupon was adjudged insolvent, and the court declined to pass upon the question presented on the appeal from the judgment dismissing appellant’s petition, and held that in such cases and all similar cases the appellate court will dismiss the appeal on the ground that judicial tribunals are not organized for the purpose of rendering decisions which can be of no possible advantage to the parties to the litigation. And numerous authorities are cited, to which we call attention, supporting the court’s conclusion, most of them cases where the condition arose after the appeal had been perfected.
Counsel’s great excuse is that his client is ignorant, and could not comprehend and did not understand court proceedings or the effect of any given set of facts in law or otherwise. This may be conceded, but it in no manner excuses appellant for concealing the facts regarding the transaction from his counsel. He knew the facts about it, whether he knew what part of them might constitute a defense or not. I do not *437deem it a question whether the affidavits or attitude of appellant have misled plaintiff, nor whether he has acted upon them. The question is, “Shall this court devote its energies — of which this case has taken its share at least — to the solution of questions not in litigation ?” The explanation of counsel furnishes no solid ground on which to stand. I have no doubt that counsel was surprised at the dismissal by the court on its own motion. He had no occasion to be, however. The zeal of counsel often leads them beyond the mark, but that does not warrant a court of last resort in shutting its eyes to the pleadings or admissions on one side of a case. The affidavits presented showed conclusively that he could not maintain, on a new trial, the defense interposed and relied upon at the former trial, and the facts disclosed revealed a total lack of any other defense in an action of claim and delivery, and, instead of counsel trying to shield his client after the facts .were disclosed to him, he should no longer permit this court to be imposed upon, but should himself move a dismissal of the appeal.
It is said that this affidavit does not state positively and unequivocally that Kepreta was paid $1,800, or any part thereof, or that he received any cash or its equivalent from said bank in the sum advanced as the consideration for the note in suit. This is a mere distinction without a difference, when the affidavit says that the bank advanced Kepreta $1,500, and no more. “Advance, — to furnish, as money or other value, before it becomes due, or in aid of an enterprise; to supply beforehand, as a merchant advances money on a contract.” Webster’s International Dictionary. The meaning as used in these affidavits is clear. It means money paid by the bank to Kepreta at the time or before he gave this note.
His affidavits are something different from the ordinary affidavit, which may be used in evidence as indicating that a party has taken conflicting positions on a question, but they "were here solemnly vouched for by the appellant himself. No court should permit a party to profit by and speculate on his ability to draw affidavits of a fine-spun sort for purposes of delay, and when he intermingles facts showing his position om the merits false, let him be heard to say that it should take notice of; only those allegations favorable to him. A great deal might be said on this subject, but it seems to me that its naked statement ought to be sufficient. It is very easy to find authorities apparently supporting any *438proposition. The defense was total want of consideration. The affidavit of defendant and his witness both show a valuable consideration; and even had the defense been failure of consideration, they concede the receipt of the amount the note represented within $200, and hence show no defense to either form of action. The defendant presents these affidavits as entitled to the fullest credit. The decision, in effect, holds them not binding, because defendant would be permitted to impeach them on trial and to have a jury pass upon their truthfulness.
While this may or may not be correct, I do not deem its correctness of much importance. Neither do I consider the question of estoppel necessarily controlling. For the purposes of this discussion it may be conceded that the defendant was not, by the adoption and presentation of the affidavit of Minckler, estopped to prove a partial failure of consideration. This would not help him, for the reasons hereinbefore stated. Neither should it matter if he may be allowed to impeach these affidavits on a retrial. For the same purpose this may be conceded. From this standpoint, is it the part of wisdom, does it tend to promote justice between litigants, is it a wise use of the powers and functions of a court, to devote its time to considering such matters, and permit the defendant to make repeated changes in his attitude toward the litigation, taking contradictory and conflicting positions with reference to the rights of the plaintiff, when, if his statements are accepted at their face, they conclusively show that he has no defense to the action brought by the plaintiff?
But is it simply a question of evidence? Let us inquire what Mr. Chamberlayne, an authority cited to support the decision, says. “For forensic purposes, admissions may be classed as judicial or extrajudicial. The judicial admission is one made on the record or in connection with the judicial proceedings in which it is offered in evidence. An extrajudicial admission is one in pais, not made in court for the purposes of the case on trial in which it is offered.” 2 Chamberlayne, Ev. § 1233. And, again: “According to the proportion in which the elements of procedure and logic respectively enter into their effect, judicial admissions may be treated in two general classes, — formal judicial admissions and those which are informal. In case of the formal judicial admission, the influence of the element of procedure is supreme. That of logic is practically absent. This fact removes formal judicial *439admissions, properly speaking, entirely from the domain of evidence. . . . Exhibiting such an admission to the tribunal is not to produce proof. It is not even to prove a prima facie case. It is final, conclusive, irrebuttable by evidence. It is a fact to which procedure assigns a definite value. It is in no sense evidence of a fact, amenable to the rules of logic.” 2 Chamberlayne, Ev. Sec. 1238.
I shall not refer in detail to the authorities cited in the opinion on this question. It is sufficient to call attention to the fact that some of those to which apparently the most weight is attached, in no manner sustain the points to which they are cited. The quotations which 1 have made from Ohamberlayne are contained in the long chapter cited in bulk in the majority opinion, and show the distinction between judicial admissions and extrajudicial admissions; and a further inspection of that chapter and the statements in the majority opinion, I think, disclose a misapplication of the law relating to extrajudicial admissions to this case. The definition of judicial admissions is applicable herein and to the affidavits under consideration. They were made in this case, filed in this case, and used in this case, and are therefore judicial admissions, the effect of which is defined in the quotation I have used. The further quotation contained in the majority opinion, from § 898 of Wigmore on Evidence, relates to admissions made in one case and sought to be used in subsequent litigation, — that is, in another case, Finally, I may say that I am impelled to my conclusion by the obvious effect, if not purpose, of acceding to defendant’s demands. This effect is to grant a new trial, which cannot legally afford the defendant relief in this action; and as to all questions, except the law as to the president of a bank being a due course purchaser, it simply amounts to giving the defendant an opportunity to produce evidence which he might,. with the slightest effort, have produced at the former trial, and which he will now be enabled to obtain by this indirect method of applying for a new trial, and on grounds on which a new trial is never granted, even when application is made to the trial court.
In my opinion the appeal should be dismissed.