Court Opinion

ID: 6738869
Source: CourtListenerOpinion
Date Created: 2022-07-20 23:20:31.67639+00
Date Added: 2024-06-11T16:01:53.668625
License: Public Domain

Christianson, Ch. J.
(dissenting). This is an action on a promissory note. The defendant pleaded want of consideration. The evidence was such as to make it a question for the jury whether there was any consideration. The trial court instructed the jury that it was incumbent upon the defendant to establish, by a preponderance of the evidence, that he had received no consideration for the note. Defendant predicates error upon this instruction. The majority hold that the instruction was proper. I believe that it was erroneous. There is no question but that the holding of the majority has some support in the authorities. But much of such support is more apparent than real. Corpus Juris (8 C. J. 996) says that the decisions sustaining the views of the majority, “while for the most part apparently without qualification on their face, are subject to explanation, at least according to the rules laid down in many jurisdictions, by adding that what is meant is that defendant must produce some evidence to overcome the presumption of consideration arising from the production of the instrument, in order to shift to plaintiff the necessity for proving facts relating to the consideration. In other words the rule, at least in most of the states, is that although a bill or a note imports in itself a consideration, yet when evidence has been introduced to rebut the presumption of consideration the burden shifts to plaintiff to show by a preponderance of the evidence that there was a consideration; and this is so even where the instrument on its face recites a consideration as by the use of the words 'value received.’ ” Ruling Case Law (3 R. C. L. p. 928) says: “There has been much discussion, not a little confusion, and some real conflict among the decisions, respecting the party on whom rests the burden of proof as to consideration vel non. There seems to be no doubt, however, but that the burden of proof is upon the plaintiff to establish the fact that the instrument was given for a valuable consideration. While the produc*198tion of the note, with the admission or proof of the signature, makes a prima facie case, and upon the evidence of the instrument itself, the plaintiff is entitled to a verdict, unless there is some other evidence to affect it; yet when consideration is denied in the answer, there is an issue made upon that point, on which the plaintiff has the affirmative; and the presumption being prima facie only, and not conclusive, the burden of proof necessarily rests upon the plaintiff to show a consideration by a preponderance of the whole evidence given on the trial of the ' issue. There being other evidence on both sides, which has a bearing ' upon the question of consideration, the burden remains upon the plaintiff upon all the evidence produced, including the note itself and the presumption that arises from it, to establish what he, in the declaration in his writ, has necessarily alleged. The weight of the evidence, or, as it is otherwise expressed, the preponderance of the evidence, may vary from side to side as a trial progresses; but the burden, which rests upon the plaintiff, to establish the material averments of his cause of action by the preponderance of all the evidence, never shifts. The party who maintains the affirmative of an issue carries the burden of proof through the whole case, although he may be aided by such a rebuttable presumption of law, or such facts, as would prima facie support his contention. His opponent need do no more than counterbalance the presumption or prima facie case. Nor does it malm any difference that the instrument contains the words Value received.’ ” In my opinion the rule just stated is the correct one.
The majority members, however, invoke § 5882, Comp. Laws 1913, which provides that a party who seeks to invalidate or avoid a written instrument has the burden of showing want of consideration. This, and the preceding section,' do not relate to negotiable instruments, but to other written contracts. Under the common law an adequate consideration was necessary to give validity to contracts not under seal. In ease of suits upon simple contracts it was necessary to allege and prove a consideration. Peasley v. McFadden, 68 Cal. 611, 10 Pac. 179. This rule, however, did not apply to negotiable instruments; in suing upon them it was not necessary either to allege or, in the first instance, to prove consideration. 3 R. C. L. pp. 836, 837; 8 C. J. 867. The purpose of §§ 5881, 5882, Comp. Laws 1913, was to change the common-law rule in this state with respect to simple contracts (Peasley v. Mc *199Fadden, supra), and to extend to all simple contracts in writing the presumption which originally attached only to negotiable instruments. 13 C. J. 760; 6 Am. & Eng. Enc. Law 762.
The Negotiable Instruments Law provides: “Every negotiable instrument is deemed prima facie to have been issued for a valuable consideration; and every person whose signature appears thereon to have become a party thereto for value.”' Oomp. Laws 1913, § 6909. “Absence or failure of consideration is matter of defense as against any person not a holder in due course.” Oomp. Laws 1913, § 6913. “Every holder is deemed prima facie to be a holder in due course; but when it is shown that the title of any person who has negotiated the instrument was defective, the burden is on the holder to prove that he or some other person under whom he claims acquired the title as a holder in due course.” Comp. Laws 1913, § 6944.
These provisions are applicable in this case. They are in harmony with the rule announced in Ruling Case Law quoted above, and in conflict with the rule announced by the majority members in this case. Under the rule adopted by the majority the ultimate burden of proof is east upon the defendant to disprove the consideration, but the statutes referred to only cast upon him the burden of overcoming the presumption or prima facie case. In case the testimony is equally balanced, defendant succeeds; not the plaintiff, as held by the majority.