Bullard v. Smith

72 P. 761, 28 Mont. 387, 1903 Mont. LEXIS 105
CourtMontana Supreme Court
DecidedJune 10, 1903
DocketNo. 1,588
StatusPublished
Cited by30 cases

This text of 72 P. 761 (Bullard v. Smith) is published on Counsel Stack Legal Research, covering Montana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bullard v. Smith, 72 P. 761, 28 Mont. 387, 1903 Mont. LEXIS 105 (Mo. 1903).

Opinion

MR COMMISSIONER CLAYBERG

prepared the opinion for the court.

Action on promissory note dated November 29, 1898,’ fox $1,000, made, executed and delivered by respondent to one James Donaldson, and transferred to appellant for a valuable consideration before maturity. The note in question was in the following form: “Miles City, Montana, Nov. 29, 1898. $1,000.00. Sixty days, without grace after date I promise to pay to the order of James Donaldson, one thousand dollars, at the First National Bank of Miles City, with interest at ten (10) per cent, per annum from and after M. until paid, for value received with attorney’s fees in addition to other costs in case the holder is obliged to enforce payment at law. H. A. Smith. The State National Bank. No. 13,282. [Five revenue stamps —a one, two two’s, one five, one ten.]” Indorsed on face': “Protested this 28th day of January, 1899, for nonpayment. Jno. E. De Carle, Notary Public.” Indorsed on back: “Pay to W. H. Bullard. James Donaldson. Pay State National Bank or order. W. H. Bullard.”

The complaint contained the ordinary allegations in a suit on a promissory note. The answer, after certain denials of allegations of plaintiff’s complaint, alleged affirmatively that [395]*395Donaldson, by duress, force, and threats, compelled the execution of tbe note; that it was without consideration, and that Donaldson knew that fact; that plaintiff knew that the note was void at the time of its purchase; and that he was not a tona fide holder. The replication denied all these affirmative allegations, and alleged that the note was executed voluntarily in part settlement of an existing indebtedness. Upon a trial of the issues thus raised, a great amount of testimony was introduced, all of which is set forth in the transcript. Plaintiff made a prima facie casé on the trial by the introduction of the note, proof of a purchase'before maturity, and proof of the reasonable value of the attorney’s fees provided for in the note, and then rested. Defendant was sivorn as a witness in his own behalf, and testified to- facts which his counsel insists show that.the note was given under duress, and then rested. Plaintiff then introduced testimony tending to show that he purchased the note prior to maturity for $900 cash, and that the note was given Donaldson voluntarily, and in consideration of damages he had suffered because of the theft of certain of his sheep, with which it was insisted defendant was connected.

1. The first question to be considered by this- court is whether the note sued upon was negotiable. The court below held it to be nonnegotiable, and it followed from such holding that the defendant was entitled to make proof of each and every defense which he might have asserted, had the suit been brought by Donaldson, the original payee of the note. If the note was negotiable, and it appeared that plaintiff obtained it prior to maturity, for a valuable consideration, and without notice of the defenses which the defendant might have interposed against the original payee, he was entitled to recover.

Prior to the passage of the Code of 1895, notes of this character were negotiable.’ (Bank of Commerce v. Fuqua, 11 Mont. 285, 28 Pac. 291, 14 L. R. A. 588, 28 Am. St. Rep. 461.) By Sections 3991 to 3997, Civil Code, they were made nonnegotiable. Section 3992 provides: “A negotiable instrument must be made payable in money only, and without any condition not [396]*396certain of fulfillment.” Section 3997 provides: “A negotiable instrument must not contain any other contract than such as is specified in this article.” Section 3996 provides: “A negotiable instrument may contain a pledge of collateral security, with authority to dispose thereof.” By virtue of these provisions of the statute, the supreme court held in the case of Stadler v. First National Bank of Helena, 22 Mont. 190, 56 Pac. 111, 74 Am. St. Rep. 582, that no instrument was negotiable which contained a contract to pay attorney’s fees, because of Section 3997, and because a contract of that character is not mentioned in the statute. By the statute of 1895, making such notes nonnegotiable, the legislature provided, in effect, that the maker of a note might plead defenses of the character asserted here in a suit brought by an indorsee or assignee of the note. Thus the statute of 1895 created a defense which the maker might for the first time in this state plead in a suit brought upon a note similar to the one in question by an indorsee or holder thereof. There is no doubt but that the legislature had power to pass this Act, and that it was constitutional' in every regard.

The decision of Stadler v. Bank, supra, was rendered on February 20, 1899. The legislature of Montana was then in session, and passed an Act amending Section 3996 so as to read as follows : “A negotiable instrument may contain a pledge of collateral security with authority to dispose thereof, alsoi a provision for reasonable attorney fee or both.” By Section 2 of the same Act, the legislature further provided, “AH Acts and parts of Aetd inconsistent herewith are hereby repealed.” (Laws of 1899, p. 124.) By this action of the legislature, notes which under the statute of 1895, as construed by this court in Btadler v. Bank, supra, were nonnegotiable, were made negotiable. In effect, the legislature took away from the maker of a. note a de-' fense which he was allowed to assert only by virtue of the provision of the Code of 1895.

There is no prohibition in our constitution against retrospective legislation, other than that which is stated in Section 11, Article III, which is as follows: “No ex post facto law, nor [397]*397law impairing the obligation of contracts, or making any irrevocable grant of special privileges, franchises or immunities shall be passed by the legislative assembly.” It follows that the legislature was therefore untrammeled and free, in so far as constitutional provisions were concerned, to pass any retrospective laws which did not violate the obligations of contracts or interfere with any vested rights.

While there is no. constitutional provision against retrospective legislation, the Civil Code of 1895, in which the sections above quoted are found, contains these prolusions:

“Sec. 4650. This Code takes effect at twelve o’clock noon on the first day of July, 1895.
“Sec. 4651. No part of it is retroactive unless expressly so declared.”

We find similar’ provisions in the Political Code and Code of Civil Procedure, passed at the same time.

We are therefore called upon to construe the amendment to Section 3996, passed by the legislature of 1899, in connection with Section 4651, Code of 1895. By the last-mentioned section the power of the legislature to enact retroactive or retrospective laws is recognized, but a limitation is placed upon the exercise of such power, by requiring that, in case of the passage of such Acts, they must be expressly declared to be retroactive in their operation. We do not find in the amendment of 1899 any express declaration mentioned in Section 4651, that the Act should be retroactive in its operation. A general rule of construction of statutes is that the meaning and intent of the legislature must, be arrived at and enforced. ( United States v. Hartwell, 6 Wall. 385, 18 L. Ed. 830.) In order to arrive at this legislative intent, we must investigate the history of the passage of the Act of 1899.

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Bluebook (online)
72 P. 761, 28 Mont. 387, 1903 Mont. LEXIS 105, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bullard-v-smith-mont-1903.