Court Opinion

ID: 7098223
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:13:10.634889+00
Date Added: 2024-06-11T16:13:19.393133
License: Public Domain

OPINION ON REHEARING.
Adams, J.
The evidence in this ease tends strongly to show that McCall acquired no title to the note. We are inclined to think that such is the fact, and that, in procuring the note from defendants’ treasurer and transferring it to the plaintiffs, *265lie perpetrated a fraud upon the defendants. In the opinion filed the plaintiffs’ rights were made to depend wholly upon the fact that they appeared to have acquired the note before maturity, for a valuable consideration, and without notice. The ■correctness of -the rule of law upon which the decision was based we do not understand to be questioned; but the defendants .deny that the plaintiffs acquired the note for a valuable consideration, and deny that they acquired it without notice of the defects of McCall’s title. They maintain that the burden of proof is on the plaintiffs to show that they gave value and took the note without notice, and they insist that the plaintiffs have failed to show either fact. As to the burden of proof in such a case the defendants are correct, nOr •does the opinion hold otherwise. The note in question was taken as collateral to a past-due note made by McCall, and the alleged consideration is the extension of McCall’s note. 'The defendants deny that there was any consideration, upon two grounds: In the first place, they say that the evidence fails to show any agreement for am extension; and, in the second place, they claim that the extension, if given, would not, in law, constitute a consideration.
The fact of the extension was testified to by one of the ■plaintiffs in these words: “Plaintiffs agreed with McCall to •extend the time of the payment of said note. The terms were to extend the payment of the two thousand dollar McCall note until the three thousand dollar note in suit came due. 'The agreement was verbal, through Howe, and by correspond•ence between me and McCall.” The defendants insist that this is insufficient; that Howe-’s testimony should have been taken and the correspondence should have been produced. Whether the witness knew what Howe did in such a way that he could properly testify to it may admit of some doubt, but it is not for us to say he did not. As to the correspondence it is sufficient to say that secondary evidence is admissible L unless it is objected to. These propositions, indeed, we do not understand to be seriously questioned. But it is insisted *266that the fact that Howe’s testimony was not taken and the correspondence not produced, taken in connection with other suspicious circumstances, is sufficient to destroy the witness’ credibility. On this point we have to say that we have all read the evidence separately, and have all failéd to reach this conclusion.
The same witness states that the note was acquired without notice of defects, and the suspicious circumstances urged as overcoming the evidence, we think, are not sufficient.
2. —:-: time. That an extension was given, we think, is proven. We-come, then, to consider whether it constituted a eonsideration. We are unable to conclude that it did not. It is quite possible that the plaintiffs lost nothing' by the extension. It would be so if McCall were solvent at the expiration of the extension; or if, during the time of extension, nothing could have been collected of him. But the-granting of extension was the waiver of the right to enforce-immediate payment. That is a sufficient consideration to uphold an ordinary contract, and we think it sufficient to uphold a note where it has been obtained and negotiated in fraud of the maker. It is conceded by defendants that McCall is. insolvent. But they insist that the plaintiffs should show something more than the granting of extension; they insist that they should show a positive loss by doing it. But it might not be practicable to show it, even if it were sustained. The chances of collecting something from an insolvent debtor, if vigorously pursued, are better than the chances of showing-what could have been collected where he is not pursued.
The defendants say that if the rule in this case is correct corporations are at the mercy of their officers. Corporations, like natural persons, are at the mercy of every one who has the disposition and opportunity to steal their negotiable paper and put it in circulation. But the importance of protecting-them is not such as to justify the adoption of a rule which would go far to impair the peculiar value of such paper-derived from its negotiability.
*267As to whether the plaintiffs should not have inferred from the fact that McCall’s name was attached to this note as secretary, that he held it as secretary, or in some way as the property of the company, some of us have entertained great doubt. We have accordingly carefully examined the able argument and.the authorities presented in the petition for a rehearing, but we have to say that the conclusion heretofore reached through much hesitation remains unchanged.
The defendants insist that the evidence shows usury. If the defendants made a usurious contract they made it with McCall. But they insist, and in this we think they are correct, that they made no contract with him of any kind.
We think that the petition for a rehearing must be overruled.