McCormick v. Beeman

170 N.W. 135, 41 S.D. 282, 1918 S.D. LEXIS 186

• Court: South Dakota Supreme Court
• Decided: December 31, 1918
• Docket: File No. 4373
• Status: Published

Opinion

GATES, J.

Action upon two promissory notes given by defendant to plaintiff, one of which contained the following provision :

“This note is given with the understanding that it will not bé due and payable until A. D. Babcock, pays his $1,200.00 note March 1, 1915, and that when saiid note is paid in full, this note will fall due and be paid of said proceeds.”

The other note contained similarly worded provisions with the substitution of the H. B. Kelly note of $1,000 due December 1, 1914, in lieu of the A. D. Babcock note of $1,200 due oh March 1, 1915.

The jury returned) a verdict for plaintiff. From the judgment and an order denying a new trial defendant appeals. The notes were given by defendant to plaintiff for his commission as broker in making tire sale of certain lands for defendant to the said Babcock and Kelly. Small cash payments were made and contracts of sale providing for deferred payments evidenced by promissory notes. Upon refusal of the purchasers to 1-ive up to the contracts, the defendant settled with the purchasers, canceled the contracts, and surrendered the unpaid notes. Neither of the promissory notes referred to in the promissory notes in suit was ever paid. The trial court charged'the jury, in substance, that, if defendant acted in good faith and without .disregard! of plaintiff’s rights in making the settlements with the purchasers, plaintiff could not recover; but that, if defendant did) not act in good faith toward plaintiff, the latter could recover. This statement of law is not objected to by appellant as an abstract proposition, but he contends that there was no sufficient evidence to warrant the submission of the- issue to the jury, and that the issue was not within the pleadings. We think appellant is mistaken as to both propositions.

[1] The cause of action- in the complaint relating to the Babcock note contained the following allegation:

“That after the giving of the said note above described' and without the consent or knowledge of this plaintiff, the defendant did settle, cancel, and compromise the claim- represented -by the A. IX Babcock note above described, for a certain sum of money and other valuable consideration not known to thi-s plaintiff, and did thereby attempt to cheat and defraud this plaintiff out of his ■money due on the said- note above described.”

The cause of action in the complaint relating to the Kelly note contained a similar allegation. As against a demurrer ore tenus, this was a sufficient allegation to justify the court in submitting to the jury the question of defendant’s good faith in making the settlement's.

[2] As going to the good faith of appellant in making the settlements, the evidence tended to show the following: That the contract of sale between -defendant and Babcock was dated September 3, 1914, and that at that time plaintiff’s commission had been fully earned. That the Babcock contract recitedi the payment of $5 -cash and the giving of notes for deferred payments due on or before the following dates: $200 on January 1, 19T5; $995, March 1, 1915;'$400, December 1, 1915; $400, December 1, 1916; $400, December 1, 1917; $400, .December 1, 1918; $400, December 1, 1919; and $1,600, December 1, 1920. That the first note in suit was dated February 3, 1915, at a time that Ba'bcock was in default in paying the first note. That upon the settlement defendant received $30 in cash, and that at that time the land was worth' from $3 to $5 more per acre than at the time of entering into the contract. That the contract between defendant and Kelly was dated August 19, 1914, and that at that time plaintiff’s commission- had been f-ully earned. That the Kelly contract recited the payment of $200 in cash and -tibe giving of notes for deferred payments due on or before the following dates: $200, October 1, 19,14; $1,000, December 1, 1914; and $3,800 in 10 equal annual payments beginning December 1, 1915. That the sum of $200.10 was paid on December 3, 1914, on the $200 note due October 1, 1914, and that the following indorsement-appeared on the $1,000 note due December 1, 1914: “By cattle $350 to apply on- note October 10, 1914.” That'the second note in suit was dated February 3, 1915, at a time that Kelly -was in default in paying the remainder of the $1,000 note due December 1, 1914. That upon the -settlement 'defendant received an assignment of the crop lease of 1915 -in addition to ■the above payments, and that at that time the land w-as worth from $3 to $5 more an acre than at the time of entering into the contract.

We are not disposed to disagree with the trial court in its refusal to direct a verdict for defendant, nor with the conclusion of the jury that in making the settlements the defendant did1 not act in good faith towards the plaintiff.

The judgment and order appealed from are affirmed.