Fuller v. Scott

8 Kan. 25

• Court: Supreme Court of Kansas
• Decided: January 15, 1871
• Status: Published

Opinion

The opinion of the court was delivered by

Yaíentine, J.:

This was an action upon an alleged guaranty of a promissory note. The note reads as follows-;

“$4,208.21. Leavenworth, Eeb. 8th, 1866.

Oh the first day of May, after date, I promise to pay to the order of Scott, Kerr & Co. four thousand two hundred and eight and dollars, at their office, value received. J. T. MoWhirt.” The note was indorsed as follows: “P. Fuller & Co.”

The defendants below, Perry Fuller and Alexander McDonald, who are now plaintiffs in error, were members of the firm of “ P. Fuller & Co.” The plaintiffs below, Lncien Scott and Charlotte S. Scott, (defendants in error,) are the owners of said note. The said indorsement was made after the note was delivered to Scott, Kerr & Co-

Many exceptions were taken to the rulings of the court below, and many errors are assigned in this court; but we should judge from the brief of the counsel for plaintiffs in error that all the supposed errors of the court below are now abandoned, except certain errors claimed to have been committed by the court in charging the jury. We decide the questions raised upon these instructions as follows:

1. Indorsement; guaranty, Fi/rst. The indorsement of the name of a third person in blank upon the back of a promissory note is prima facie evidence of a contract of guaranty. (See cases cited in brief of counsel for defendants in error.)

2. Authority of holder. Second. Such an indorsement gives to the holder of the note full authority to fill up the blank at any time, before or during the trial, with the implied contract of guaranty, unless the same is inconsistent with the understanding of the parties. (2 Kas., 497, 525; 6 Conn., 315; 17 Ill., 459, 466; 41 Ill., 411, 413; 13 Johns., 175.)

3. Considerar tion. Tlwrd. It is necessary that there be a consideration to support the guaranty. An agreement to extend the time of payment of the note is a sufficient consideration to sustain» the guaranty.

4. Burden of proof. Fowtli. Such an indorsement is such a contract in writing as will import a consideration; (Comp. Laws, 351, §§ 6, 7; Gen. Stat., 183, §§ 7, 8;) and if the party who made the indorsement claims that there was no consideration for the guaranty, the burden of the proof will rest upon him to show it, and he must show it by a preponderance of the evidence.

5 statute of ' frauds. Fifth. The said indorsement is such a contract in wilting as Ta-hd under the statute of frauds. (7 Mass., 233; 4 Pick., 385, 387; 11 Mass., 436; 13 Johns., 175; 1 Hall, 336; 11 Conn., 213, 229; 2 Hill, 663; 2 Kas., 497; 2 N. Y., 226.)

6 Demand notice, etc. /Sixth. The guarantor is not released from liability for want of presentment, demand and notice, unless he can show negligeilce fhe holder of the note, and actual loss sus-¡¡ained by himself. (2 Pars, on Notes, 137 and note b, and cases there cited.)

7. indorsement by firm; presumption, II. There was no evidence tending to prove that the said indorsement was not made in the firm business of P. Puller & Co.; but on the contrary, all the evidence on the ; __ t ... subject tended, to prove that it was made m such firm business. But even if there had been no evidence upon the subject, when it was admitted by Fuller, and proved against McDonald, that said firm indorsed said note, it would then be presumed that such indorsement was made in the firm business.

III. It is claimed that the court below erred in charging the jury as follows:

“ Tlie burden of proof is upon the defendant Fuller to show that there was no consideration for, or to support, the indorsement on the note.”

indorsement; consideratioh. This instruction under the pleadings we think was correct. The plaintiffs below alleged in their petition that the said P. Fuller & Co. indorsed said note. Fuller in his answer did not deny said allegation, but substantially, if not in positive terms, admitted it. Therefore, under the pleadings, it must be held that P. Fuller & Co. indorsed said note, and presumed they indorsed it as guarantors, and upon a sufficient consideration. If Fuller claimed that the indorsement was made without a sufficient consideration, it devolved upon him to show it.

It is also claimed that the court erred iu instructing the jury as follows:

“ If the indorsement on the note was made without any consideration therefor, then the defendants are not bound thereby, and you should find a verdict in their favor. But if the indorsement was made by McDonald upon and in pursuance of an agreement between McWhirt and Scott, Kerr & Oo., that they (Scott, Kerr & Oo.) would extend the time of payment of an indebtedness, then due and existing from McWhirt to them, (Scott, Kerr & Oo.,) upon the condition that the firm of P. Fuller & Oo. would guarantee the payment of such indebtedness, and Scott, Kerr & Oo. did extend the time of payment in accordance with such agreement, then there was a sufficient consideration to support the indorsement. Or, if McWhirt, being indebted to Scott, Kerr & Co., furnished the firm of J. Í. McWhirt & Co., of which McWhirt and the defendant McDonald were members, four thousand dollars or upwards, upon the consideration or agreement that McDonald would guarantee the payment of McWhirt’s indebtedness to Scott, Kerr & Oo., and McDonald, in consideration of the money so furnished to the firm of J. T. McWhirt & Co., did indorse the note sued on, then this was a sufficient consideration to support his indorsement.”

We perceive no error in this instruction. It embodies the law upon the subject, and the evidence in the case clearly made it relevant and applicable. It says there must be a consideration for the indorsement, but that this consideration may be an agreement to"extend the time of payment of the note; and that if P. Fuller & Oo. were parties to the indorsement, it would bind them; but if instead of “P. Fuller & Oo.”it was McDonald alone who indorsed the note, the indorsement would bind him.

It is also claimed that the court erred in instructing the jury as follows:

“ The law presumes as against the defendant Fuller that the indorsement was made upon a sufficient consideration, and the burden is on him to.show the contrary; and if the testimony shows that McDonald indorsed the note, then the law also presumes as against him that his indorsement was for a sufficient consideration.”

We have already considered the principle embodied in this instruction, so far as it applies to Fuller. We shall now consider it with reference to McDonald. McDonald, who answered separately, denied in his answer that P. Fuller & Co. indorsed . said note, and hence, of course, as between the plaintiffs and McDonald, it devolved upon the plaintiffs to prove that P. Fuller & Co. made the indorsement. They held the affirmative of that issue, and the burden of proving it of course rested upon them through the entire trial. And the court below, in said instruction, says nothing to the contrary to this. The court in substance simply says that proof that McDonald indorsed the note is some evidence that there was a sufficient consideration; or rather that such indorsement is prima facie evidence of a sufficient consideration, and that after this prima facie case is made out by the plaintiffs against McDonald, it then devolves upon him to show, by a preponderance of the other evidence, that there was no consideration for the indorsement. This we think is correct. Upon the pleadings it devolves upon the plaintiffs to prove by a preponderance of the evidence that McDonald indorsed the note, and that there was a consideration for such indorsement, and the burden of proving this was upon the plaintiffs all through the trial. But after the plaintiffs proved the indorsement, and therefore prima facie proved the consideration therefor, it then devolved upon McDonald to remove this prima facie presumption in favor of a consideration by other evidence. But if the weight of the other evidence tended to prove (as in part we think it did) a sufficient consid- . eration, then of course this presumption is strengthened. If the other evidence was equally balanced, in favor of and against this presumption, then it leaves the presumption just as it was before, and the plaintiffs would still be entitled to a verdict. Hence it must take a preponderance of the other evidence in order to remove this presumption, or to entitle McDonald to recover; and therefore the burden of proof in fact (although perhaps counsel would have us call it by some’other name) rested upon McDonald to remove the presumption of consideration arising from his indorsement of said note, from the time said indorsement was proven.

It is also claimed that the court erred in instructing the jury as follows:

“ If the indorsement was made by McDonald at the time of the making of the note by McWhirt, or at any time subsequent thereto, the law presumes an engagement on the part of the defendants of the same nature as me undertaking written by the counsel during the trial on the back of the note above the indorsement; but this presumption would not be conclusive, but could be rebutted by evidence, showing an intention on the part of the defendants not to sustain the relation of guarantors to the note, but some other relation.”

The undertaking mentioned in the foregoing instruction is as follows: “For value received, we guarantee to Scott, Kerr & Oo. the payment of the within note and sum-of money therein specified, according to the tenor thereof.” And upon this same subject the court further instructed the jury as follows:

“ I have already said to you that if McDonald wrote that signature, ‘JP. Fuller c& Go.’ on the back of the note, either at the time McWhirt made the note, or after that time, the presumption of the law is that P. Fuller & Oo. were guarantors on the note; that they undertook to guarantee its payment.”

The objection to these instructions is that they declare that the simple indorsement of the name, “ P. Fuller & Oo.,” upon this note is presumptive evidence that the firm oí “ P. Fuller & Co.” were guarantors. We do not think the objection is well taken. As we have before stated, we think that said indorsement is prima facie evidence that the parties thereto are guarantors.

It is also claimed that the court erred in instructing the jury as follows:

“ As against the makers thereof the contract made by placing the signature£ P. Fuller & Oo.’ on the back of the note read in evidence, and delivering the same to Scott, Kerr & Oo., imports a consideration.”

There is nothing objectionable in this instruction. The principle involved in it we have heretofore considered.

The jury were required to make special pleadings of fact. The seventh question upon which they were to find was as follows: “ If any agreement was made between Scott, Kerr & Oo. and P. Fuller & Co., or any member of the firm of P. Fuller & Co., was that agreement in writing ?” TJpon this question tbe court instructed tbe jury as follows: “ I will instruct you “bow to answer tbat question: You will answer it by saying “ tbe only written agreement between tbe parties is tbat im- “ plied by tbe indorsement.” But by consent of counsel for all tbe parties tbe jury, instead of answering as tbe court instructed tbem, answered tbe question as follows: “Yes; tbe writing CP. F%dler <£¡ Pc.’ on tbe back of tbe note.” It is claimed tbat tbe court erred in giving tbe foregoing instruction, and tbe plaintiffs in error ask to bave tbe judgment reversed for tbat reason. We perceive no error. It may be* well enough, however, to state that another question was submitted to tbe jury to determine who indorsed said note. Tbe question was as follows: “By whom was tbe signature CP. Fuller dfc Pc.’written ?” Tbe jury answered, “By Alexander McDonald.” Tbe only object desired by putting question number seven to tbe jury was to bave a finding as to bow much of tbe contract (if any existed) was in writvng; and on tbis question there was no evidence tending to show anything different from what tbe court instructed tbe jury to find.

We bave considered all tbe questions presented to us, and we cannot say tbat tbe court below committed any error. Dpon some of tbe questions we bave doubts; upon some of tbem tbe authorities are conflicting, and able opinions may be found on both sides of tbe question. We think, however, tbat we bave decided all tbe questions in accordance with tbe weight of tbe authority. Tbe judgment of tbe court below is affirmed.

Kingman, O. J., concurring. Brewer, D, not sitting in tbe case.