Court Opinion

ID: 6738360
Source: CourtListenerOpinion
Date Created: 2022-07-20 23:20:14.917827+00
Date Added: 2024-06-11T16:01:52.776328
License: Public Domain

Bruce, Ch. J.
I concur in the opinion of Mr. Justice Christian-son.
Per Curiam.
In the petition for rehearing filed herein, principal reliance seems to be placed upon the contention that the plaintiff is entitled to occupy the position of a holder in due course; and it is insisted that there is no evidence in the record to support a finding either that the M. Rumely Company and the Rumely Products Company are, in effect, the same corporation, or that the M. Rumely Company took the negotiable instrument burdened with defenses that might have existed as to the Rumely Products Company. While the opinions filed by the majority members of the court disclose that these questions have been fully considered, it is deemed proper to briefly state the record evidenced in support of the finding that the M. Eumely Company is not entitled to the favorable position contended for.
The agent who represented the M. Rumely Company, in attempting to collect the note in suit and who, in fact, collected a portion thereof, was shown to have made a definite promise on behalf of the M. Rumely Company that the plows would be made good. It was further shown that experts were sent to work on the plows in an effort to put them in working order, and also that on the 30th day of March, 1915, the defendants, in reliance upon the promise of the agent of the M. Rumely Company to put the plows in working order, executed a new chattel mortgage, running to Finley P. Mount, receiver for the M. Rumely Company, which covered their crop as well as the machinery which had been embraced in the original mortgage (the one in suit). If the *34M. Rumely Company was at that time claiming to be the holder in due course of the paper, with the right to enforce the security that it had without regard to the warranty, it should have asserted its right then so that the defendants could have chosen as to whether or not they would stand upon the rights which they contend were theirs. The attitude of the M. Rumely Company in taking additional security under the circumstances is in the nature of an admission of their obligation to make the warranty good. If it was a holder in due course, it was a holder in due course before the efforts made to collect and before it undertook to make good on the warranty. A holder in due course of negotiable paper is not ordinarily concerned' about collateral arrangements between the payee and the maker, and the fact that the M. Eumley Company concerned itself to the extent that it did in this case is, to our minds, strong evidence that it considered itself under obligation to the defendants. When this admission is considered in connection with the selling arrangement between the M. Eumely Company and the Eumely Products Company, according to which the M. Eumely Company was to receive payment in notes taken by the Eumely Products Company, and also in connection with the fact that the Eumely Products Company was a selling agent for the “Eumely Line,” the “Advance -Line,” and the “Gaar-Scott Line,” as shown on the note in suit, it is only reasonable to infer that the M. Eumely Company was apprised of the character of the selling contract that the Eumely Products Company customarily used.
The foregoing answers also the contention that the plaintiffs failed to comply with conditions precedent to the enforcement of the warranty, such as the giving of notice, etc. These conditions were for the benefit of the warrantor or its assignees, and could, of course, be waived. There was ample evidence that they were waived in this case.
The petition for rehearing is denied.
Bruce, Ch. J., and Christianson, J., adhere to their dissent.