McKenzie v. Hilleboe

149 N.W. 342, 28 N.D. 436, 1914 N.D. LEXIS 128

• Court: North Dakota Supreme Court
• Decided: November 11, 1914
• Status: Published

Opinions

Goss, J.

The question involved is one of fact. The important assignments of error are upon the denial of. defendant’s motion for a direct verdict of dismissal at the close of all the testimony and the subsequent denial of defendant’s motion for judgment of dismissal notwithstanding the verdict.

All the testimnoy must be considered, and any ambiguity or doubtful construction thereof resolved in support of the verdict.

It is established, that in 1909 title to certain land was in the First National Bank of Westhope as security of an amount owing that bank by the Bottineau County -Investment Company; that one Hilleboe was throughout 1909 vice president of that bank, and, with the Porters and Cooper, constituted the investment company. In the fall of 1909 Hilleboe disposed oí his bank stock. Until that time as vice president he had been one of its activev'and managing officials. In December, 1909., Cooper became cashier. Plaintiff McKenzie was a farmer in the .vicinity of the; particular land, and had rented it the previous year, 1908, while title thereof had been in the investment company. In the falljrf'T90'8'’McKenzie had done some plowing on this land, and which he ’cropped in the year 1909 under the 1908 arrangement previously made with Hilleboe in behalf of the investment company. In the summer of 1909 some talk was had between Hilleboe and McKenzie to the effect that 100 acres more needed summer fallowing, and pursuant thereto McKenzie summer fallowed the 100 acres under the understanding that, should the land be sold, the bank having the dealing of it, McKenzie would be paid for Ms labor at the rate of $1.50 per acre, and in case it was not sold he should crop it on shares in 1910; on the strength of that deal the bank then loaned him. $200, with the understanding that in case of a sale of the land $150 would be applied upon his note evidencing such loan, Hilleboe negotiating the loan to McKenzie in behalf of the bank. These facts are undisputed. The question is whether there is any proof that Hilleboe acted individually in this plowing and leasing contract, instead of in behalf of the bank. All the testimony on this question will now be recited. The plaintiff testified that he contracted in the summer of 1909 with Hilleboe in regard to plowing this land “for the defendant,” he “to get paid for it when the farm was sold;” and he “was to have the crop off the land if the land was not sold. The.farm was sold; $150 and interest is due.” That Hilleboe did not tell him the title to this land was in the bank, but that Cooper, the cashier, in 1910 relative to the payment for the plowing, told him in the bank that as soon as settlement was made for the land by the purchaser with the bank the bank would pay for the plowing, and that Hilleboe said the bank would pay when the land was settled for; that McKenzie admits he testified in justice court that for this plowing he “expected to get credit on his note to the bank.” That Hilleboe told him “to go to the bank and get credit on your note,” but that on his going there Cooper said “that he did not know anything about it.” In response to his own counsel, McKenzie testified: “Q. At the. time that you made the contract with Hilleboe for the plowing above described, did he (Hilleboe) tell you who was the owner of the land ? A. The bank had the dealing of it. Q. Did Hilleboe say in what capacity the bank had the land? A. He didn’t say.” Porter’s testimony offered by plaintiff was that “McKenzie come to me and asked me if I had the renting of the place at one time, and I told him he better see Hilleboe in regard to it, and I understood afterwards he had rented the place.” Conce-rMng'ihis incident of the talk with Porter, McKenzie testifies in cross-examinati “Q. Who did you first enter into negotiations with for the rental ol the Craig farm? A. Hilleboe. Q. Did you talk with Porter first regarding the renting of this farm? A. No.” Hilleboe in cross-examination under the' statute testified that he entered into a contract with McKenzie on behalf of the bank for the plowing; that he “told him that the bank had title, that the farm was for sale and probably would be sold, and he says, then, ‘If I do the plowing, how will I be protected for the plowing?’ and I told him if he did the plowing, it would be worth that much to whoever got it, but the bank had it that year, and ‘I would see that the plowing was paid for.’ McKenzie needed some money to carry him along, so he got some from the bank for which he gave his note. Sometime after that that land was sold and the money applied on the contract. That was all there was to that contract.” “Later the farm was sold and I told McKenzie about when he came in, and he said that was all right, whenever the plowing was fixed up give me credit on my notes.” “At the time that McKenzie rented this land of the investment company, in 1908, McKenzie came into the bank and wanted to rent this farm, and I told him to go and see Charley Porter, who looked after the land at that time and the handling of it, and McKenzie went and saw Porter; he come back to the bank and said that ‘Cooper or Porter would not rent it to him,’ or something to that effect. ‘Tou better see the bank or see me,’ Hilleboe.” “Later McKenzie come in again and asked about that land, and I told him he better see Porter about it, and he was out for a while, and said he ‘didn’t make a deal, didn’t arrange to work the land,’ and I said that ‘we want the land farmed, and it seems to me you better go ahead and plow it. Tou would be .entitled to half the crop anyway.’ That was in the fall of 1908. He wTanted to do some breaking in the fall, so McKenzie asked if ‘he couldn’t get a contract on it,’ and I says, ‘I can’t very well do that, because Porter had been looking after those things as secretary, and generally signed the contracts.’ I said, ‘I can’t do that now, but later we may get together and fix up a contract,’ but the contract was not fixed up. In renting the land in 1908 I acted in behalf of the Bottineau County Investment Company. I was still a member of that company in 1909. Meanwhile the land was deeded over to the Pirst National Bank. At the second time McKenzie came in I told him that the bank now had a deed to the land. Q. At the time you made the contract with McKenzie in the summer of 1909. did you tell McKenzie for whom you were acting? A. I told him that the bank owned the land and the bank was making the deal with him.” On this record at the close of plaintiff’s case the defendant moved for a directed verdict on the ground that “there is no evidence in this case to show that any agreement was made between the plaintiff and the defendant Hilleboe for the doing of this plowing, or any promise made on the part of the defendant to pay the plaintiff for the same;” and that the testimony of the plaintiff himself “affirmatively shows that at the time that this arrangement was made Hilleboe told the plaintiff that he was acting on behalf of the bank, and that at the time he did the plowing he expected he should receive pay for the plowing by having the same credited upon the indebtedness that he then owed to the bank,” which motion was denied and an exception taken, upon which ruling error is assigned. On defendant’s main case Hilleboe testifies: “He borrowed money from the bank on the strength of this plowing at the same time,” and at the time he borrowed this money “he said he wanted to get the money on the plowing, and said when the land was sold to offset it, and I told him we couldn’t do that, that the bank couldn’t let money out without having something to show for it, but I says, 'you can get the money, and we will take your note a/nd hold the note until the land is sold/ He gave his note to the bank at that time, and the bank then loaned him $200 in money. At the time this land was sold the bank received $150 “for this plowing, in addition to the purchase price of the land.” “Q. And do you know who paid that amount to the hank? A. I do. Q. Who? A. Charley Porter. Q. At the time that this sale was made, was McKenzie still owing on this note for the borrowed money he gave at the time the deal was made? A. He was. Q. Was he owing on that note to the amount of $150 ? A. More than $150.” At the time of this sale Hilleboe had sold his interest in the bank, but was still there. He told his successor as vice president about the different deals, including the one with McKenzie, and the sale of the farm, and left instructions to have the bank’s contract. with McKenzie carried out and the amount he was entitled to for the plowing endorsed on McKenzie’s note. That he had testified in justice court that he had acted “for all parties interested in the land during the time that each party owned the land.” There never was any time that there was any misunderstanding between McKenzie and me in regard to who had the land, never any question about that. In fact the first I knew of it was when'I was sued, that there was some misunderstanding about that part of it. I never individually had any interest in this land, and never received any benefit personally from any transaction made with reference to it. At the time that I went out of the bank, McKenzie was owing this note, and at that time was entitled to a credit on this note to the amount of that plowing.” In rebuttal, plaintiff offers the testimony of MacDougall, a justice of the peace, to the effect that in the trial of this case against the bank, when it was a party defendant, Hilleboe “said he didn’t know who he was acting for, whether it was for the bank or the Bottineau County Investment Company. Q. At that time do you remember whether or not he testified to the fact that he told McKenzie he was acting for the bank ? A. I do not remember. I remember him saying positively he didn’t know which party he was acting for that day. Q. Did you hear Hilleboe then testify that he did not inform the plaintiff McKenzie that he was acting for the bank ? A. I couldn’t say. I do not remember that.” On cross-examination, MacDougall testified: “Q. And didn’t Hilleboe say he couldn’t tell (whether he was acting for the bank or the investment company) until the date was fixed ? A. I couldn’t say. Q. Will you testify fie did not say thát ? A. I will not.” MacDougall’s testimony is of little importance. Taken as true, as it must be, it does not impeach nor contradict Hilleboe, who says he had acted at first for the investment company and later for the bank as to this land. Cooper was also called by plaintiff in rebuttal, and admitted that in the fall of 1909 he received instructions as cashier in regard to the notes and in regard to the payment for certain plowing done by McKenzie. Whereupon both parties rested, and the motion for directed verdict, made at the close of plaintiff’s case, was renewed and denied, and the case submitted to the jury, it returning a verdict for plaintiff. Defendant later moved for judgment of dismissal, notwithstanding the verdict, which was denied, and when judgment was subsequently entered, this appeal was taken.

The charge of the court has not been excepted to, and must constitute the law of this case, and as such governs as to the issues submitted to the jury and involved in ascertaining whether there was any issue of fact for the jury to pass upon. The court’s instructions bind the plaintiff and this court on such inquiry. The jury were instructed as follows: “The issue that is before you for you to determine is, Did McKenzie at the time he entered into the agreement lenow that Hilleboe was not acting in his individual capacity? In that case it would be immaterial for whom Ililleboe was acting, whether it was for the First National Bank or the investment company, so long as McKenzie knew that he was not acting personally. If McKenzie knew —the burden of proof is upon him to show that he did not know — if McKenzie knew that Hilleboe was acting for someone else, then he cannot recover in this action, for the reason he would have then sued the wrong parly. That is all there is in this case. If McKenzie didn’t know, and has shown to you that he didn’t know, Hilleboe was acting for anyone, he had a right to assume he was acting for himself, and if that is so he is entitled to recover, but if he has failed to show you that he did no.t know that Ililleboe was acting personally, then he would not be entitled to recover, and you haven’t anything to do with whether the bank gave him credit on the note or whether the note is not paid, because that is not in the case and you would be required to return a verdict for the defendant.”

It will be noticed that the foregoing is a plain instruction that, if McKenzie knew that Ililleboe was acting for a principal, no matter whom, McKenzie cannot recover, with the burden of proof upon McKenzie to show Hilleboe was acting individually or that he supposed he was so acting. This excludes any right of plaintiff to recover as on a guaranty that Hilleboe would pay for the plowing if the principal did not. The testimony then must be weighed with reference to whether there is any substantial proof (1) that Hilleboe acted individually, or that, if he acted as agent, (2) McKenzie did not know of it..

It is uncontroverted that McKenzie in the fall of 1908 had contracted with the investment company through Hilleboe for certain plowing then to be done, which portion of this farm McKenzie in 1909 had in crop, and at the very time he had the deal to do the summer fallowing-on the balance of it, and upon the strength of which contract he borrowed from the bank $200, negotiating the loan through Hilleboe as a bank official. McKenzie admits that he was told by Cooper in the bank, as well as by Hilleboe outside the bank, that when the land was sold a settlement was made for it, and the bank, not Hilleboe, would pay for the plowing. In response to his own counsel, McKenzie testifies that at the time he made the contract with Hilleboe for the plowing, Hilleboe told him “the bank had the dealing of it,” but he was not informed in what capacity. The testimony of Porter, his own witness, is “that McKenzie come to me and asked me if I had the renting of the place ■at one time, and I told him he better see Hilleboe in regard to it, and I understood afterwards he had rented the place.” The time is fixed as the year in question by the immediately succeeding question and •answer: “Q. Do you know whether the farm was sold that year or not? A. It was.” Concededly the sale was in the fall and before December 1, 1909.

Concede that McKenzie’s testimony is true that he did not talk with Porter first about renting this farm, but entered into negotiations for its rental with Hilleboe: This does not dispute the testimony of either Porter or Hilleboe that Porter, during the negotiations in the fall of 1908, leading to the renting of this farm, was referred to Hilleboe when •approached in that regard by McKenzie. Again, concede that at the time. McKenzie “entered into negotiations” for either rental of or plowing upon this land (concerning which his testimony is indefinite), he “didn’t know that the title to the land was in the bank,” that does not ■establish nor is it proof that at or before the contract for the plowing was consummated, and before any plowing was done, McKenzie did not know and understand that title was in the bank. All of the plaintiff’s testimony may be true and so may all of Hilleboe’s. Plaintiff could answer as he did on his cross-examination, and still speak the truth •and testify to nothing concerning the contract as actually entered into. Any lawyer or trial judge has often heard such semi-evasion, or equivocal testimony, whereby the whole answer given is made to depend upon the time stated in the question or other conditions. To the particular inquiry put, “During the summer of 1909 did you have any dealings with the defendant Hilleboe regarding the plowing of said land ? ” to which he replied, “Yes,” the answer may be equally true, as the dealings were had with Hilleboe aside from the question of whether had with him individually or as an agent. The same is true as to the answer “yes” to the question, “Did you agree to plow certain land for the ■defendant during the summer of 1909 ? ” There is nothing substantial in plaintiff’s whole testimony to raise any issue as to the capacity in which or for whom Hillehoe contracted, as plaintiff has not testified upon those particulars. But plaintiff’s testimony discloses that he expected the bank to pay for this work, as appears from the following: “Is it not a fact that you expected the amount due you for the plowing from the bank to be.credited on your debt to the bank? A. Yes. Q. And on the trial of this action in the justice court you there testified that you expected to get credit on your notes, did you ? A. Yes.” From plaintiff’s testimony likewise it must be conceded that he had borrowed money from the bank and given his note for it, upon which the bank was to indorse a payment when the land was sold, and, as he testifies-flatly, he expected the amount due from the plowing to be then credited on that note. And it must not be overlooked that this plaintiff has testified that “at the time he made the contract for the plowing of the land, Hilleboe told him the bank had the dealing of the land,” so that besides-corroborating Hilleboe and admitting knowledge of the bank’s interest, McKenzie knew when he contracted to plow it in 1909, as he had known when he leased the land through Hilleboe the fall before, then acting as he knew for the investment company, that the bank had the dealing, of it; that is, the control of it. He does not deny Hilleboe’s testimony that the loan by the bank was made to him on the strength of and at the same time that the contract for the plowing was entered into, and knowledge in him that the bank then had the dealing of it, that the bank was thus loaning its money as indirectly an advance payment for that, plowing. McKenzie at the time of the getting of the money asked that he be relieved from giving a note, and instead that the money be-given him by the bank as an advance payment for the plowing to be done by him, but that instead his note was taken for the reason that the bank had to have something to evidence the money given him virtually as an. advance of unearned money, but with the explicit understanding that the note would be held until fall, and if the farm was sold the plowing was to be credited thereon, and, if not, McKenzie should crop the ground so plowed on halves the succeeding year. All this is not denied by McKenzie, but his silence concedes it to be the fact. McKenzie then must have known that Hilleboe was loaning this money as an advance payment, not for Hilleboe, but for the bank, McKenzie’s paymaster. He, admits that he knew the bank had the dealing of the land. He knew that Hilleboe was its vice president, and its active official; that Hilleboe had the year before leased it to him as an agent for the investment company, the management of which had been succeeded by the bank after it had secured the dealing of the land, as he was told it had. Besides, the following testimony of Hilleboe is not denied, and Porter and Coopcr both testified after Hilleboe. Q. “Now, at the time this land was sold, do you know whether or not the bank received pay for this plowing in addition to the purchase price of the land ? ” A. “They did; they received $150.” Q. “And do you know who paid that amount to the bank?” A. “I do.” Q. “Who.” A. “Charley Porter.” None of this testimony is denied by the plaintiff or anyone. Porter does testify that “all the money that came out of the farm was applied upon the indebtedness in the First National Bank of the Bottineau County Investment Company.”

The court eliminated from the jury’s consideration and from ours all question of the failure of the bank to apply this $150, admittedly received by it from the investment company or Porter, by its instructions to the jury that “you haven’t anything to do with whether the bank gave him credit on the note, or whether the note is not paid, because that is not the case.” This was on the theory that whatever was done by the bank was immaterial, as the application of the proceeds was no proof of whether Hilleboe contracted in his individual capacity nr as agent, and as a matter occurring many months after the contract was entered into and had been fully performed.

The verdict must be supported, if at all, by Hilleboe’s statement made on cross-examination and in explanation of McKenzie’s inquiry as to whether McKenzie would get his pay if he did the work in case the bank sold the land, it being “for sale and probably would be sold, “whereupon Hilleboe stated to McKenzie that he “would see the plowing was paid for,” a statement showing on its face under the facts concerning which it was made, and in response to the inquiry causing it, that respondent knew he was dealing with the bank and wanted Hilleboe to see that the bank paid him, and to that extent evidence against the plaintiff. This statement cannot be taken as an isolated statement; it must be considered with the other facts testified to by Hilleboe, of which it was given as a part. Under the instructions of the court, properly given, it cannot be considered as a guaranty of payment, as that matter is beyond the issues under the pleadings. Besides, if Hilleboe was here sued as guarantor, the proof in this case discloses an absolute defense would be available to him, inasmuch as he did see to it that $150 additional to the price of the land was paid to that bank, as a payment for and by McKenzie, which amount under the undisputed proof should have been credited on this note, and under the law it is-credited thereon, whether indorsed or not. The statement of McKenzie that he “had a dealing with Hilleboe in regard to the plowing,” and that he “agreed to plow certain land for the defendant,” this land in question, taken in connection with the statement of Hilleboe that he, Hilleboe, “would see that the plowing was paid for,” standing separately unexplained might amount to enough testimony to sustain this verdict, if they could be considered alone and without regard to all the-other admitted facts, including the testimony of McKenzie’s own witness, Porter, and Hilleboe’s uncontradicted testimony concerning plaintiff’s knowledge of whom he was dealing with, together with the fact, that McKenzie admits he was told the bank had the dealing of the land ;. that he was then growing a crop on part of it under lease made through. Hilleboe with the investment company, not Plilleboe; he being at the-time a lessee of such third party. The court instructed that the question for the jury was, “Did McKenzie at the time he entered into the-agreement know that Hilleboe was not acting in his individual capacity ? ” “If McKenzie knew that Hilleboe was acting for someone else, then he cannot recover in this action, for the reason he would have then sued the wrong party.” The evidence seems overwhelming, and, considered in connection with all the admitted facts, free from conflict as. to this crucial question of fact. McKenzie not only knew the bank had the dealing of the place, that is, the control of it, as he admits, also that Hilleboe was the active officer for the bank; as such through him the-bank advanced payment for his note, Hilleboe acting as its active, known,, and disclosed agent, and as payment in advance for this very plowing. This fact McKenzie has not seen fit to deny. It is further admitted that the bank has been reimbursed after the sale made. . The only conclusion left is that this lawsuit is the result of the refusal of those bank officials-succeeding Hilleboe to respect the bank’s contract with McKenzie fully performed and paid for, thereby attempting to shift the burden of payment of the bank deal upon this defendant. There is no substantial testimony raising any issue of fact. At the most it can be regarded as. but' a scintilla of testimony, and as such is insufficient to support the-verdict. The court should have granted the motion for a directed verdict made at the close of the case; but the motion for judgment notwithstanding the verdict is denied, as possibly plaintiff may produce-some evidence on a new trial authorizing his recovery. It is therefore ordered that the motion for judgment notwithstanding the verdict be denied, but that a new trial be awarded. Defendant to recover costs taxable on appeal.

Bruce, J. I concur in the result.