Court Opinion

ID: 6951016
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:31:47.619415+00
Date Added: 2024-06-11T16:08:04.766281
License: Public Domain

Mr. Justice Beeese delivered the opinion of the Court. All the questions raised on this record have been decided in the case of Goodrich v. Reynolds, Wilder & Co., ante, 490, except one, and that arises upon the sixth assignment of error, which is, that the court rejected certain evidence offered by the defendant. It appears from the record, the defendant offered to prove when the bond and coupon notes were given by him to the company, it was agreed between him and the company, acting by A. J. Matson, a director of the company, that the note was to be kept by the company in the possession of Matson as the director and agent of the company, and that the defendant was not to be held liable on it, until the whole amount of the capital stock required to build the road, should be subscribed for and taken, and if the road was not built and completed within two years from the date of the bonds and coupons, then the bonds and coupons were to be given up to the defendant, and that the capital stock had not been subscribed for, and the road has not been built. Delivery of a note is essential to its validity; the conditions, therefore, under which a note was delivered, if there were any, may, sometimes, become an important subject of inquiry. Like deeds, they can be delivered as escrows, to take effect only upon the happening of a certain event to be proved by parol. 1 Parsons on Notes and Bills, 51. But such proof •must not go to the extent of varying the terms of a note absolute on its face, showing that though on its face, it was given for one purpose, yet in truth and in fact, it was given for a different purpose, but only such parol evidence as will go to impeach the consideration of the note, or show fraud in the transaction. We believe the rule is well settled, that the maker of an absolute note cannot show against the payee, and, a fortiori, not against any indorsee, an oral contemporaneous agreement which makes the note payable on a contingency. 2 Parsons on Notes and Bills, 508, and eases cited in the notes. The plaintiff in this case, held the bond and coupon note as assignee of the railroad company, and assigned before due. His right of action, therefore, cannot be defeated by any such agreement as the defendant proposed to prove. Besides, the offer was not accompanied with the further offer to prove that the plaintiff lmew these facts, when he took the assignment. In principle, it is identical with the case of Lane v. Sharp, 3 Scam. 572, where the defendant offered to prove, that if the land for which the note sued on was given should not be redeemed in two years, the note should be returned. The court held such proof inadmissible. To the same effect are the cases cited by counsel for appellee, of Harlow v. Boswell, 15 Ill. 57, and Perry v. Graves, 12 Ill. 288, and numerous other cases of the same import are referred to, in 2 Pars, on Notes and Bills, 508. It may be said, too, that such an agreement would be a fraud upon other stockholders. Honesty and fair dealing required that all subscriptions of stock should be real and not colorable. A secret agreement to release one set of subscribers, or one particular subscriber, would be unfair, and ought not to be enforced by a court of justice. The fact that the assignee received this bond in payment of a pre-existing debt due him by the company, can make no difference in his rights to a recovery upon it. He is the assignee for a valuable consideration, and entitled to all the rights of such. Story on Promissory Notes, sec. 195; 2 Parsons on Notes and Bills, 218. As to the point made on the assignment, that was not in issue. It was not denied in the mode prescribed by law. Archer v. Bogue, 3 Scam. 527; McIntyre v. Preston, 5 Gilm. 64; Hudson v. Dickinson, 12 Ill. 408. Perceiving no error in the record, the judgment is affirmed. Judgment affirmed.