LIPSMEIER II. ,VEHSLAGE.
LIPSMEIER V. VEHSLAGE.1
(Oircuit OOU'k't, E.
p. Missouri. October 6,1886.)
note, without conllideratioti, cannot be enforced by a party to whom It is indorsed after maturity by the payee. 2 S. S.um-E.nDENCE-BURDEN, OF PROOF. A negotiable note imports consideration, and, in a suit on such an instrument, the burden of proving lack of consideration is upon the defendant. 2 8. S.UIE-ALLowANCE OF TIMEl. The allowance of in which to pay a debt is a valuable consideI:ation.' .. FURNISI;[ED ANOTHER. GoodlJ furnished a third party at the maker's request are a good consider' ation for a note given in, payment therefor.' IS. Where a note is given by way of compr(lmise of a disputed claim, the consideration will not be inquired into. 2 6. COu'Rn.....TURIsDIcTION-U. S. CmCUIT CoURT-COLLATERAL SECURITy-REV ST.,'U. 8, § 629. . . ..... ...... Whl;lre a note for over $500, made by a resident of Missou.:i, and payable to another resident of that state, wasmdorsed by the payee to a resident of lllinois,to secure a debt for less than $500, and the indorsee agreed to: account f.or and paYQ:ver to.the indorser the entire amount colle,cted on the note over and above the amount due him, held, ina suit on the note by the indorsee, that the circait court'had jurisdiction.
Suit on a note for over $500 by a resident of Illinois, to whom, it was transferred by the payee; 'a resident of Missouri,"after matufity,as collateralaecurity for a debt of $400. . At the time. the transferwlLs made the indorsee gave theindorsera written agreement to accottfit'fol' and pay over to him the entire amount realized from the suit o"er and above the amount of his debt.' When this suit was instituted; and up to the time of trial, the debt and interest thereon amounted to less than $500. It was therefore contended by the defendant that the court had no jurisdiction, because ,the plaintiff's interest in the suit was less than $500·. The other materialfacts are sufficiently stated in the cllarge to the jury. Kehr IX' 7'ittman, for pla.intiff. Pattison ·'t10rane, for defendant. TREAT, iT., (char,qingjury orally.) This sllit is based on a promissory note negotiable in form. The plaintiff sues as indorsee of said note. The ordinary rule of law governing p8iper of this kind is that it imports on its face a consideration; in other words, that the party who gave the note entered into an obligation to pay the same, for pecuniary reasons, whereby the payee would be entitled to recover on the. face of the paper. This note was transferred, as' admitted,
I 2 See
Edited by BenJ. F. Rex, Esq., of the at. Louis l).ote at end of case.' , '
after maturity. If it had been transferred for value, to an innocent party, before maturity, the defenses that are submitted to you would not 'be considered. But it so happens, admittedly, that this note was transferred long after maturity; consequently you are to determine the respective rights of thE) parties as if Mr. Beckerman, the payee in the himself was suing here. In other words, the equities of the original transaction are open for inquiry. This note was given, it seems, February 1, 1878, negotiable by its terms,,.,-a note payable in one year,-and transferred long thereafter to this plaintiff. Some very nice questions have been presented to the court, under the statute of the United States as., to the jurisdic: tion of tl;1is tribunal, concerning wl;1jch, in the present aspect of the case, it is unnecessary to trouble you. The court decides that the party is. rightfully in court, and consequently the matter is. submitted to you, and the questions of fact areFirst, was. there any considerlJ,tion for this note? If not, you must duty of showing that there was. no find for the defendant. But consideration rests on the defendant. Ndtes of this character import consideration. In other words, the plaintiff is not bound to prove that tl:l.enote;'was given for consideration, because, wheli a party signs paper of this. kind, he admits,;impliedly, that there was a good reason for so doing,-a valid reason. Consequently the burden is. cast upon the defendant to show that there was no consideration. Notes sometimes may be given for the accommodation of the payee, or for any other than valid reasons. If so} it being the nature of a gift,-tbe mere voluntary act from one to another,-there is. no obligation in law, if he chooses. not to pay the,note, for him s.o to do, by judicial process.." Henoe this. cas.eassUmes. an as.pect between the plaintiff and defendant as. if the suit had been brought by the payee, Mr. Beckerman, against the defendant, and the question of consideration is. open for· full inquiry. You have heard the testimony, which is somewhat peculiar in its. as.pects". and you alone must pass upon the sufficienoy thereof, so far as the one or the other side isooncerned. Starting, then, with the proposition that the note itself imports consideration, and that it is the duty of the defendant to show that there was no consideration, you should proceed to investigate the testimony. You have heard the state,ments Qf the immediate parties in interest. ,When I say "immediate," I mean the original parties. Mr. Vehslage, the defendant, has. given you his version of the matter. Mr. Beckerman has. given hil'l version. Whi(jp is the true version? Did Mr. Vehslage Mr. Beckerman, sign thil;l now merely to not owio.g Mr. or did Mr. Vehslage, consider.jng yqll heard ,the relationship of the family in thes.e trans.aotions., having induced credit to be given, make his noto so that the whole of the cOlltrovers.y might he closed by one transaction? Suppose some one or other of his s.ons., or his. wife, had, at hi'
instance, been furnished with property, to-wit, the flour in question, by Mr. Beckerman, and, to adjust that controversy, Mr. Vehslage gave a note whereby the immediate payment of the debt was to be deferred for a year: under this condition of affairs the note is valid in the hands of the holder, and the party having, under such circumstances, assumed the obligation, must respond. On the one side, Mr. Vehslage informs you that he had nothing to do with these original sales. etc .· with Mr. Beckerman; consequently he gave a note without any consideration. Mr. Beckerman informs you that this dealing originallybegan at the instance of the defendant, and that he asked Mr. Vehslage to account to him for all these amounts. If that be so. Mr. Beckerman had a right to look to this defendant. Vehslage, for the payment of that demand; and if it be true, as Mr. Beckerman says, that, after the lapse of years,-after some intermediate adjustments of accounts at the instance of Mr. Vehslage, the defendant.the accounting .was finally adjusted between them, anil this note given for the balance, then this defendant was responsible for that note. ,. It is .your duty. gentlemen, exclusively, to determine what weight you will gi,e to the one or the other side in this conflicting testimony. You have heard both sides. They differ in very important matters as to the subject under investigation. Testimony has been offered whereby you may test the accuracy of the recollection of these respective parties in order to ascertain whether, first, this party defendant did cause this account to be entered into, the giving orders therefor, and making himself personally liable for the balance, or whether the dealings were between other parties. If the dealings were entirely with other parties, and this defendant voluntarily executeda. note with respect thereto, he having no interest in the controversy, then the note is not obligatory upon him, and the verdict will be, if such be the fact, for the defendant. If. on the other hand. he asked, as Mr. Beckerman testifies, that this flour should be furnished on his account, and it was so furnished, no matter what he might wish with regard to the matter, Mr. Beckerman is entitled to pay from him, and if he gave his note, under that condition of affairs, for the balance of the account, he must pay the note. Then, again, there is another proposition involved in this case to which the counsel, I believe, did not advert. The condition of these transactions has been explained to some extent to you. Here was a family occupying certain premises, devoted to different uses,-some using a portion thereof for a particular purpose; others for entirely di;fferentpurposes. It seems to have been a family arrangement, all very. proper among themselves. In order. to carry forward their respective enterprises, they had a right to do what they chose among themselves, .all being sui juris. .Each one of the parties could make whatever contract he individually chose to third parties, and be alone responsible therefor. It may be-and that is for the jury to v.29F.no.4-12
determine-that, under this peculiar among the various members of this family, doubts arose as to who. should meet these varied obligations that had gone on in the management of these socalled family affairs of a business character. If there was a doubt or dispute among the parties,' (there being an existing obligation 011 the part of some of them as to these matters undetermined,) and Mr. Vehslage chose to assume the obligation in order to compromise and settle the whole matter, then there was a consideration for so doing, because thereby he caused delay in the collection' of the notes or the collection of the demand as to some one or the other of these respective parties. To summa'rize, gentlemen, the defendant admits he executed the note in controversy. The law determines, in the absence of any proof, that that note was executed for a valuable alid legal consideration. Therefore, in the absence of any proof, your verdict neces-' silrily would be for the amount of the note, with the interest which it carries. Now, to overcome that presumption of lavr, which always arises when a man executes a negotiabltl note under the circumstances was given withof this case, the defendant must show that the out consideration. If it was given without consideration, your verdict must be for the. defendant; the burden ,of proof being on the defendant to show that there was no consideration. As to the question of consideration, it is for you to determine, first; did this defendant -owe this plaintiff? If he did,then the verdict must be for the plaintiff. If he did not owe the plaintiff, or if he did not assume the debt to settle the controversies existing with respect to the various Inembers -of his family, Mr. Beckerman' giving him a year for payment in consequence of such assumption, defendant is not liable. If that is true, then there is no consideration upon such a supposed transaction. It often happens that, where controversies arise, parties agree to adjust them by compromise. When they so do agree, courts do not go back to inquire into whether it was a good or ,bad controversy. The parties are supposed to know what they were doing,'and, to avoid ,atrifeor litigation, agree upon certain terms whereby the matter Inay be adjusted or settled between themselves. When that 'is done, there is a valuable consideration. Consequently, if the defendant has 'shown that this is not his debt; that if, as averred, he merely signed this paper for the accommodation ,of Mr. Beckerman, not forconsid· eration existing,-you will have to find for the defendant. If, on the -other hand, you find that it was his debt, and the :flour furnished by Beckerman was furnished at his instance, then there was adequate eonsideration. If you find that there was difficulty or doubt as to who the respective parties were who would have been primarily liable, and he came forward, and, on consideration that the debt should be delayed for a year, assumed the same, then there is a consideration.
LIP!'METF.R '17. VEHOiLAGB.
Now, if I have m'lcLe myRt'lf it is for yOll to decide, first, was there an entire 11 bsence of consideration? If so, find for the defendant. If the testimony does not convince you, under the rules laid down, that tlJCre was au absence of consideration, you will have to find for the plaintiff.
NOTE. PBOMI880BY NOTES. The recital, in a promissory note, II for value received," is prima facje evidence of consideration, Noyes v. Smith. 5 AU. Rep. 529; Parsons (Mich.) 21 N. W. Rep. 303; Frunk v. Irgens, (Mmn.) 6 N. W. Rep. 380; Search v.-MIller, (Neb.) 1 N. W. Rep. 975; which may, however, be rebntted between the parties, Lancaster Co. Nat. Hank v. Huver, (Pa.) 6 AU. Rep. 141; Security Bank v. Bell, (Minn.) 21 N. W. Rep. 470; Maltz v. Fletcher, (Mich.) 18 N. W. Rep. 228; Kennedy v. Goodman, (Neb.) 16 N. W. Rep. 834; Brooks v. Hiatt. (Neb.) 14 N. W. Rep. 480; v. Buckham, (Minn.) 12 N. W. Rep. 348; Kausas Manufg Co. v. Gandy, (Neb.) 9 N. W. Rep. 569; Dicken v. Morgan, (Iowa,) 7 N. W. Rep. 145; Search v. Miller, (Mich.) 1 N. W. Rep. 975;but not as against a bona fide indorsee for value before maturity, Wilson v. Second Nat. Bank, (Pa.) 7 Atl. Rep. - : Lerch Hardware Co. v. First Nat. Bank, (Pa.) 5 AU. Rep. 778, and note; Arpin v. Owens, (Mass.) 3 N. E. Rep. 25; Westem Cottage Organ Co. v. Boyle, (Neb.) 6 N. W. Rep. 473; and the burden of proof is on him who 'denies conSideration, Bisbee v. Torinus, (Minn.) 2 N. W. Rep. 168 ; Conley v. Winsor, (Mich.) 2 N. W. Rep. 31. An extension ,of tin1e in which to pay a debt is a valuable consideration, and will sup' port a promise. ' In re Burchell, 4 Fed. Rep. 406; Bowen v. Tipton, (Md.) 1 At!. Rep. 861; Mllclare,n v. Percival, (N. Y.) 6 N. E. Rep. 582; Fraser v. Backus, (Mich.) 29 N. W. Rep. 92; Parsons v. Frost, (Mich.) 21 N. W. Rep. 303; Johnston Harvester Works v. McLean, (Wis:) 15 N. W. Rep. 177; Atherton v. Marcy, (Iowa,) 13 N. W. Rep. 759. So will a debt owing, by a thirdJ,erson', Bowen v. Tipton. (Md.) 1 At!. Rep. 861; Holm v.Sandberg, (Minn.) 21 N. W. Rep, 416; Atherton v. Marcy, (Iowa,) 13 N. W. Rep. 759; Chicago & N. E. R. Co. v. Edson, (Mich.) 3 N. W. Rep. 176 ; and the compromise of a disputed or doubtful claim, Northern Liberty Market Co. v. Kelly, 5 Sup. Ct. Rep. 422; Zimmer v. Becker, (Wis.) 29 N. W. Rep. 228. andnote; Hanley v. Noyes, (Minn.) 28 N. W. Rep. 189; Griswold v. Wright, (Wis.) 21 N. W. Rep. 44; Swem v. Green, (Colo.) 12 Pac. Rep. 202; Finley v. Funk, (Kan.) 12 Pac. Rep. 15; the of another obligatlon by the promisor is already bound, In re 13 Fed. Rep. 109 ; Buechel v. TInec lei, (W1S.) 27 N. W. Rep. 318: Snell v. Bray, (W1S.) 14 N. W. Rep. 14; but not the reiease of an utterly foundless claim, Harris v. Cassaday, (Ind.) 8 N. E. Rep. 29; nor the payment of an undisputed debt, Hooker .v. Hyde, (Wis.) 21 N. W. Rey. 52; Bryant v. BraZIl, (Iowa,) 3 N. W. Rep. 117; St. LOUIS, Ft. S. & W. Ry. Co. v. DaVIS, (Kan.) 11 Pac. Rep. 421 ; nora promise to do what the promisor is already bound to perform, Harris v. Cassaday. (Ind.) .,8 N. E. Rep. 29; Early v. Burt, (Iowa,) 28 N. W. Rep. 35. But the contrary was held in Condon v. Barr, (N. J.) 6 At!. Rep. 614; Kent v. Rand, (N. H.) 6 AU. Rep. 760; Bentley v. Lamb, (Pa.) 4 At\. Rep. 200; Hubbard v. Bugbee, (Vt.) 2 At!. Rep. 594; Allen v. Bryson, (Iowa,) 25 N. W. Rep. 820; Van Sandt v. Cramer, (Iowa,) 15 N. W. Rep. 259. A moral obligation will support a promise. In re Ekings, 6 Fag. Rep. 170; Edwards v. Braasted (Mich.) 16 N. W. Rep. 261. Promises to contribute to a common ohject are good considerations for each other. and can be enforced if the intended donee has incurred obligations on the faith thereof. Homan v. Steele, (Neb.) 26 N. W. Rep. 47'2; Paddol'k v. Bartlett, (Iowa,) 25 N. W. ReJ? 900; United Presb.Church v. Baird, (Iowa.) 14 N. W. Rep. 303; Des Moines UniverSity v. Livingston, (Iowa,) 10 N. W. Rep. 739; Allen v. Duffy, (Mich.) 4 N. W. Rep. 427. For otller conaiderations held sufficient to sustain a promise, see Schutt v. Missionary Society, (N. J.) 3 Atl. Rep. 398; Hunt v. Dederich. (Ind.) 5 N. Eo Rep. 710; Proctor (Ind.) 4 N. Rep. 303; Crombie v. McGrath, (Mass.) 2. N. E. Rel>.loo; Clayton v. WI)1ttt.ker, (Iowa,) 27 N. W. Rep. 296; Bedford v. Small, (Mmn.) 16 N. W. Rep. 452; Robli'rtson v. First Nat. Bank, (Mich.) 1 N. W. Rep. 1033: Barley v. Buell, (Cal.) 11 Pac. Rep. 632 is. C. 9 Pac. Rep. 549., For"promises held, to be without consider,ation',see B,oyce v. Berger, (Neb.) 9 N. W. Rep. 545 ; Minneapolis Harvester Works v. Hally, (Minn.),8 N. W. Rep. 597; Jones v. Matthlt'ilon', (Dak.) 11 N. W. Rep. 109; McCarthy v. Hampton Building Ass'n, (Iowa,) . 16 N. W. Rep. 114; Fuller v. Luwbert, (Me.) 5 AU. Rep. 183.
Adm'r, etc., v.
(Oircuz't Oourt, No
October Term, 1886.)
COURTS-UNITED STATES CIRCUIT COURT-JUDGMENT-POWER TO SET .ASIDE AT SUBSEQUENT TERM.
The United States circuit court has no power, at a subsequent term, to set aside 8. judgment, in due form, unconditionally entered at a former term, and which lias become a final judgment,
At Law. Motion for a rehearing refused and dismissed. Judge Cadwell, Hoyt ct Munsell, and A. M. Cox, for plaintiff. , H. D. Gottlder and Estep, Dickey ctBquire, for defendants.
WELKER, J. 'The action was one for a personal injury, and case was tried to a jury at the April term, 1886, and a verdict for the plaintiff for $8,250. A motion was filed at said term for a new trial, and was heard by the court, and overruled, and judgment entered upon the verdict, and execution issued upon the judgment.. During said term, on the seventh day of September, 1886, a motion was filed by the defendant asking for a re\)earing and reargument of the motion for a new trial, and stating that motion for a new trial should have been granted, which motion was not heard or disposed of at said term, and at its close a general order was entered "that all the cases on the docket of this court not otherwise disposed of he continued until the next term of this court." The defendant at this (October) term asks that said motion be reheard, and that the motion for new trial so overruled at the April term be now heard, and said judgment be set, aside, and a new trial ordered. Tbis raises the question whether the court, after the term at which a judgment is rendered, has power to set it aside at such subsequent term in this summary way. The motion filed at last term for a rehearing, and which, by the general order, may be continued to this term, was one not known in proceedings at law. It amonnted to the',l>ame as an oral motionJor a rehearing at the term, and nothing more. If such rehearing was not had at the term, and judgment set aside, it could not in any way affect the judgment so entered, or in any manner suspend it. It bas been clearly settled that the court has no power, at a subsequent term, to set aside a judgment, in due form, unconditionally entered at a forUler term, and Although the court may, at which had become a final this term, rehear the Illotion for new trial, still on .such rehearing, without power to set aside the judgment, such rehearing would'avail nothing to the defendant. The motion for a rehearing is therefore ' refused and dismissed.