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(230 P.)

shortly after receiving the note, and before FIRST NAT. BANK OF RIGBY V. CAMP- executing and delivering the contract, MacBELL et al. (No. 4143.)

(Supreme Court of Idaho. Oct. 21, 1924.) 1. Bills and notes 64 Conditional delivery may be shown as against one not holder in due course.

As against one not a holder in due course, the maker of a negotiable instrument may show that the delivery was conditional.

2. Evidence 420 (7)—Parol evidence admissible to show conditional delivery of negotiable instrument.

Parol evidence is admissible to show that delivery of a negotiable instrument was conditional.

Mullin mortgaged the land for $3,000; that upon learning this appellants refused to execute the contract, and the deal was never completed; that respondent acquired the note from MacMullin with knowledge of all these facts. At the conclusion of the evidence the trial court directed a verdict for respondent; upon this verdict, judgment was entered, from which this appeal is taken. There are many assignments of error but we need consider and discuss only one, to wit, that the trial court erred in directing a verdict in favor of respondent and against appellants. Appellants are father and son. They introduced testimony to the following effect. MacMullin wanted to sell them the land in

3. Bills and notes 497 (2)-Holder has burden of showing that he took note without no-question for $4,000. They looked it over and tice of conditional delivery.

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decided to take it. One dollar was paid down, and appellants executed a note for $1,000, dated June 10, 1920, due December 1, 1921, and a note for $2,999 dated June 10, 1920, payable December 1, 1921, the latter being the note in suit. These notes were left with MacMullin until the executed contract and abstract should be delivered, with the understanding that they should not take effect until the deal was closed. MacMullin said he owned the land and it was 'clear; he just wanted time to get the abstract made out. He was to furnish the contract and abstract the next day. On June 13, one Ellsworth, cashier of respondent bank, asked appellant T. J. Campbell if he had given MacMullin some notes. Campbell told him how the deal stood-that he had left the notes in MacMullin's care until the deal was settled up, and if he got the abstract and

Appeal from District Court, Jefferson contract all right; he would just as soon County; James G. Gwinn, Judge.

ers.

Action by the First National Bank of Rigby, Idaho, against Roy A. Campbell and othJudgment for plaintiff, and defendant Campbell appeals. Reversed and remanded. F. A. McCall, of Rigby, and Arthur W. Holden, of Idaho Falls, for appellants.

C. A. Bandel, of Rigby, for respondent.

Ellsworth held the notes as anybody else. On June 15, before furnishing the contract and abstract to appellants, MacMullin mortgaged the land for $3,000, the mortgage being recorded on June 20. Toward the last of June, MacMullin delivered to appellants a contract of sale executed by him, but never delivered an abstract. Appellants learned of the execution and recording of the mortgage, refused to execute the contract, and MCCARTHY, C. J. This is an action on a called the deal off. Respondent acquired the negotiable promissory note. The defense was note from MacMullin some time between June that the note was executed and delivered by 13 and June 15, 1920. On cross-examination appellants to one MacMullin on a deal by of appellant's witnesses, respondent brought which he would sell appellants a certain 80- out that in September, after the deal was acre tract of land free and clear of all incum- called off, appellants took two notes from brances, and would the next day execute and MacMullin to protect themselves, one for $1,deliver to appellants a written contract to 023.11 and one for $3,068.33. In January, that effect, and an abstract showing title in 1921, they brought action against MacMullin him free and clear of all incumbrances; that on the $1,000 note and obtained judgment by the promissory note in question was deliver- default. It is clear that the purpose of this ed by appellants to MacMullin with the un- transaction was to protect them against loss derstanding that it would not become effec- from the notes which they had given to Mactive until the execution of the contract of Mullin, one of which had been acquired by sale and the delivery of the abstract; that respondent. Appellant sought to show that For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

1

respondent was instrumental in suggesting | answer to the latter's inquiry, that the notes and effecting this attempted settlement be- were to take effect only if the deal were tween them and MacMullin, and in the bring- closed. This was sufficient to constitute no ing of the suit. Evidence to this effect was tice of the conditional delivery, and notice rejected by the court on objection by re- to Ellsworth, the cashier, was notice to respondent. The court also sustained respond-spondent. ent's objection to the question whether anything had been realized by appellants on the judgment against MacMullin or on the notes. However, there is no evidence that anything was so realized.

[4] Respondent contends, however, that the later transaction between appellants and MacMullin, by which they took his notes to protect them against loss on account of the notes which they had delivered to him, estops [1-3] C. S. § 5883, provides as follows: them from setting up the defense based upon "Every contract on a negotiable instrument the conditional delivery of their note. There is incomplete and revocable until delivery of is some conflict in the testimony as to when the instrument for the purpose of giving effect respondent acquired the note in suit. An inthereto. As between immediate parties, and as ference may be drawn from Campbell's testiregards a remote party other than a holder in mony that it was in June, whereas witness due course, the delivery, in order to be effectu- Hart, who was respondent's cashier at the al, must be made either by or under the au- time this action was tried, testified from rethority of the party making, drawing, accept-spondent's records that it was on September ing, or indorsing, as the case may be; and in such case the delivery may be shown to have 4. In any event it was acquired before Mac been conditional or for a special purpose only, Mullin gave his notes to appellants on Sepand not for the purpose of transferring the property in the instrument.

"But where the instrument is in the hands of a holder in due course, a valid delivery thereof by all parties prior to him so as to make them liable to him, is conclusively presumed.

More

tember 24, 1920. The rights of respondent
attached when it took the note, and whether
or not it was a holder in due course must be
determined as of that date. The question is
therefore unaffected by the later transaction
between MacMullin and appellants.
over, from any reasonable point of view
which may be taken of the matter, it cannot
be logically held that appellants should be
compelled to pay respondent, and take their
chance of recovering from MacMullin. They
had a right to take the notes from MacMul-
lin, and hold them as security for what they
were worth, but this in no wise estopped
them from setting up their defense as against
respondent. If MacMullin had actually paid
the notes or any part thereof, appellants
would be estopped to set up this defense to
the extent of the amount they had received

the fact that they had received the money from MacMullen would be the basis of the estoppel, and not the fact that they had taken the notes. Certainly it could not be claimed that appellants would be estopped as against MacMullin to set up their defense in an action brought by him upon the note merely because they had taken a note from him. Respondent stands in no better position than MacMullin would. For a case involving es

There is no question but that a conditional delivery, as set up in the answer and testified to by appellants, would have been a defense to appellants as against MacMullin. It was a defense against respondent unless it was a holder in due course. Liberty Trust Co. v. Tilton, 217 Mass. 462, 105 N. E. 605, L. R. A. 1915B, 144. Parol evidence is admissible to show such a conditional delivery. Hill v. Hall, 191 Mass. 253, 77 N. E. 831; Hodge v. Smith, 130 Wis. 326, 110 N. W. 192; First State Bank v. Kelly, 30 N. D. 84, 152 N. W. 125, Ann. Cas. 1917D, 1044; Key v. Usher | from MacMullin. In such event, however, (Ky.) 99 S. W. 324; Norman v. McCarthy, 56 Colo. 290, 138 P. 28; Joyce on Defenses to Commercial Paper, § 486. Further upon appellant's producing evidence that the note was delivered to take effect upon a condition which was not fulfilled, the burden was upon respondent to show that it took without notice. Hodge v. Smith, supra; Holdsworth v. Blyth & Fargo Co., 23 Wyo. 52, 146 P. 603; Mendenhall v. Ulrich, 94 Minn. 100, 101 N. W. 1057. The fact that the note was de-sentially similar facts and reaching the same livered to take effect upon a condition which was not fulfilled would constitute a defect in the title of the payee MacMullin, who negotiated it to respondent, and, under C. S. § 5919 and § 5926, it was incumbent upon respondent, in order to show it was a holder in due course, to prove that it took without notice of such defect in the title. Wright v. Spencer (Idaho) 226 P. 173. Respondent introduced no evidence to show that it took the note without notice of any defect in MacMullin's title. On the contrary, appellant T. J. Campbell testified, as above set forth, that he

conclusion, see Saline Valley Bank v. Peckham, 108 Kań. 560, 196 P. 593.

Applying the above principles to the evidence introduced in this case, it is impossible from any point of view to reach the conclu|sion that the trial court was justified in directing a verdict for respondent. It could be argued much more logically that a verdict should have been directed for appellants. However, in view of all the circumstances, we conclude that the question whether the defense of conditional delivery was established, should have been submitted to the jury.

(230 P.)

transaction given by appellants is a question Geo. D. McClintock, of Pocatello, for appelfor the jury rather than for the court. How-lant.

ever, if the conditional delivery be a estab- Peterson & Coffin, of Pocatello, for respondlished, the question as to whether respondent ents. took with notice is not one for the jury. The burden of proof was on respondent to show that it took without notice. Wright v. Spencer, and other cases cited supra. Respondent introduced no evidence to sustain this burden. On the contrary, appellants introduced evidence, uncontradicted and unimpeached, to the effect that respondent took with notice. Under these circumstances, the case should have been submitted to the jury with the instruction that, if they found the notes were delivered by appellants to MacMullin to take effect only if the deal were completed, and that the deal was not completed through MacMullin's fault, and without fault of appellants, they should find for appellants.

WILLIAM A. LEE, J. Respondents, who were copartners, and doing a general mercantile business at Lava Hot Springs, brought this action against appellant, a foreign corporation, to recover a balance of $231.25 for merchandise sold and delivered to a sheep outfit, operating under the name of Jensen & Keane. In the summer of 1921, appellant had a mortgage on these sheep, that were being run upon the public range in the vicinity of Lava Hot Springs. One of the herders, Nick Vial, applied to respondents to obtain food and other supplies for the camp outfit. by telephone with V. G. Stambaugh, a repMiller, one of the respondents, communicated

resentative of appellant at Pocatello, and ask

The judgment is reversed, and the case remanded for further proceedings in accord-ed him if the Spokane Cattle Loan Company ance with the views herein expressed. Costs to appellants.

was furnishing supplies to Jensen & Keane, and Stambaugh advised Miller that the company was furnishing supplies to this outfit,

DUNN, WILLIAM A. LEE, and WM. E. and that when they needed supplies Miller LEE, JJ., concur.

should have Jensen O. K. the slips and draw a draft upon the Spokane Cattle Loan Company for the amount. It further appears that respondents, after receiving this inforMADILL et al. v. SPOKANE CATTLE LOAN the outfit with supplies, and continued to do mation from Stambaugh, began furnishing

CO. (No. 4062.)

(Supreme Court of Idaho. Oct. 23, 1924.) 1. Corporations 399 (7)-Agent authorized to inspect sheep and renew loans thereon had Implied authority to contract for supplies to outfit on which principal had mortgage to full value of sheep.

so until the sheep were taken over by appellant, early in September. Drafts were drawn from time to time upon appellant for the purchase price of this merchandise, and were honored until shortly prior to August, when appellant refused to pay a draft drawn in this manner. Madill, one of the respondWhere a foreign corporation, engaged in ents, took the protested draft, together with making loans upon bands of sheep which are the sales tickets covering the amount of the being run upon the public range in this state, draft to Stambaugh, and was told by him has an agent within the state whose authority that the office at Spokane had changed the was to inspect and renew such loans, such plan some, and were requiring his signature agent has implied authority to bind his prin- to be attached to the draft as his O. K. becipal upon a contract for supplies furnished to an outfit upon which the company had a mort-fore it would be paid. Thereafter Stambaugh gage to the full value of the sheep.

2. Principal and agent 99-Principal cannot claim that acts within apparent scope of agent's authority for benefit of principal's in

terests were unauthorized.

A principal will not be permitted to claim that its agent acted beyond his authority, where such acts were within the apparent scope of the agent's authority, and the obligations incurred were for the benefit and protection of its interests.

Appeal from District Court, Bannock County; O. R. Baum, Judge.

Action by B. C. Madill and A. W. Miller, copartners doing business under the firm name and style of the Lava Mercantile Company, against the Spokane Cattle Loan Company. Judgment for plaintiffs, and defendant appeals. Affirmed.

attached his signature to the drafts, and they were paid, except the one for supplies fur nished between August 19 and September 20, 1921, in the amount of $387.60, which was dishonored and subsequently paid to the extent of $156.35, leaving a balance of $231.25, the basis for recovery in this action. Appellant paid the draft for supplies furnished after September 6th, when it took over the sheep under its mortgage, but refused to pay that part of the obligation which was for supplies furnished after August 19th and prior to its taking over the sheep. The supplies for the payment of which this action was instituted were furnished by respondents to the outfit operated under the name of Jensen & Keane, who held the legal title to the sheep and were insolvent, or as stated by one of the witnesses, were broke, and were unable to further finance the running of these

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and indexes

fused to do so it would have been forced to take immediate possession of the mortgaged property at the time application was made to its representative, Stambaugh, at Pocatel

sheep upon the public range. Appellant, by virtue of its mortgage, held all the beneficial interest to the full value of these sheep, and running of them on the range during the months of June, July, and August, and untillo, for authority to extend this credit. The they were turned over to appellant mortgagee was for the benefit of appellant, and apparently, at its request.

fact that appellant honored drafts drawn on it for these expenses during this time, and made it a condition that the sales slips for supplies so furnished should be submitted to its representative, Stambaugh, and his approval of the draft in payment therefor, we think sufficiently establishes his authority to do so, and appellant should not now be permitted to defeat recovery for the purchase price of these supplies so furnished by testimony that this was not within the scope of his authority as its agent. It is a correct rule of the law of agency that a principal

By way of defense, appellant seeks to show that Stambaugh's authority as an agent to act for it was limited to that of being an inspector of loans, and did not authorize him to pledge the credit of appellant for expenses incurred in connection with caring for its various herds being operated in a manner similar to this one. It further appears that there were some 40 outfits of this character that Stambaugh was authorized to look after, and he appears to have been the sole rep-may not deny the authority of one who representative of appellant in that part of the state.

It is a matter of common knowledge that about this time there was a rapid decline in the value of this class of securities, and it was not an uncommon practice for mortgagees holding this class of obligations to arrange with the owners of the legal titles to continue in possession of the mortgaged property and continue to run their herds upon the public range for the benefit of the holders of the mortgage. This often resulted in a benefit to both parties, but the owners of the legal titles, being insolvent and without credit, were unable to finance these operations without the assistance of the mortgagee, which was frequently extended for the benefit and protection of both parties to the transaction.

resents himself as the principal's agent, where such principal has by its own acts given those who dealt with such agent reason to believe that the agent had authority to bind his principal. This rule is particularly applicable, where the obligations incurred by the agent were for the benefit and protection of the interests of the principal.

The judgment of the district court is affirmed, with costs to respondents.

MCCARTHY, C. J., and BUDGE, DUNN, and WM. E LEE, JJ., concur.

(No. 4188.)

MARSHALL v. ENNS et al.
(Supreme Court of Idaho.. Oct. 22, 1924.)

Appeal and error 106-Order sustaining
objection to introduction of evidence not ap-
pealable.

tion of evidence is not appealable, under C. S. An order sustaining objection to introduc

§ 7152.

[1, 2] An agency, either general or special, cannot be established by the representations. of one claiming to be such agent, and ordinarily those who deal with an agent are bound by the limitations of his agency, where he acts beyond and without the apparent scope of his authority. However, agency and the scope of the authority of the agent may be shown by the attendant circumstances, and, after a careful consideration of the entire record in this case, and considering all of the facts and circumstances that were submitted to the jury, under instructions to which no objection has been taken, we are unable to see how a jury could have arrived at any other conclusion than that it was the intention and purpose of appellant to extend to this outfit such financial aid as was necessary in order to care for these sheep that were being herded upon the public range during the months of June, July, and August, and until they were surrendered to appellant early in September, 1921. Respondents were not in any manner interested in the transactions between the mortgagors and mortgagee. The mortgagors were unable to meet these expenses, and, had appellant re

2. Appeal and error 78(4)-Order dismissing action is "final judgment," and appealable.

An order dismissing an action is in effect a final judgment, and appealable, under C. S. § 7152.

[Ed. Note. For other definitions, see Words and Phrases, First and Second Series, Final Decree or Judgment.] 3. Guaranty

34-Contract that guarantor

not liable until reasonable effort made to collect from principal is conditional.

Where a contract of guaranty provides that the guarantor shall not become liable until reasonable effort shall have been made to collect from the principal, held that such guaranty is conditional, and not absolute. 4. Guaranty

85(1)-Complaint held insufficient to state cause of action on conditional guaranty.

Where, in a suit to enforce a conditional guaranty, reasonable effort to collect from the

Appeal from District Court, County; Ralph W. Adair, Judge.

(230 P.)

principal is not alleged, held, such a complaint "The order of the county court dismissing does not state a cause of action. the appeal is the final decision and determination of that court upon the case before it, which Bingham puts an end to the suit; and is therefore, to all intents and purposes, a judgment, subject to the revision of this court. It matters not in what form the determination of the suit is put; so that it embodies the final action of the court, it is sufficient."

Action by E. B. Marshall, doing business under the firm name and style of the Wilbur Stock Food Company, against A. P. Enns and another. From order of dismissal as to named defendant, plaintiff appeals. Affirmed.

The order in question is certainly, in its nature and essence, a final judgment, in that

A. S. Dickinson, of Blackfoot, for appel- it "finally and entirely disposes of the whole

lant.

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The "orders" in question, incorporated in one instrument, were as follows:

"Order of Dismissal.-The above-entitled cause came regularly on for trial on March 2, 1923, same being a regular judicial day of the February, 1923, term of the above-entitled court, and the plaintiff appeared by his counsel, A. S. Dickinson, Esq., and announced ready for trial, and the defendant A. P. Enns appeared by his counsel, Messrs. Whitcomb, Cowen, and Clark, and T. S. Becker, Esq., and objected to the introduction of any evidence upon the ground, and for the reason, that said complaint failed to state a cause of action as to said defendant, and after argument of counsel for the respective parties, and being fully advised in the premises, the court is of the opinion that said objection is well taken, and the same is hereby sustained.

"It is further ordered that said action be, and the same is hereby, dismissed as to the defendant A. P. Enns, without leave to amend, to which ruling of the court the plaintiff then and there in open court duly excepted. "Dated at Blackfoot, Idaho, this, the 2d day of March, 1923.

"Ralph W. Adair, District Judge."

[1, 2] It will be observed from an inspection of C. S. § 7152, that an order sustaining an objection to the introduction of evidence is not appealable; but a formal order dismissing an action is in effect a final judgment, as contemplated by the statute, and will be so considered, notwithstanding its designation. Hayne on New Trial and Appeal, vol. 2, § 184; Black on Judgments, vol. 1 (2d Ed.) §§ 21, 26, and 27; Zoller v. McDonald, 23 Cal. 136. In the last-cited case the court said:

case." Marks v. Keenan, 140 Cal. 33, 73 P. 751. The appellant has filed no brief or There is no bill of specification of errors. exceptions or reporter's transcript, and an investigation of the judgment complained of must be confined to an examination of the judgment roll. It appears from the judgment, or order so called, that respondent's objection to the introduction of any evidence under the complaint was sustained; that no leave to amend was given; and that plaintiff excepted. It does not appear that plaintiff ever asked leave to amend, and this court will not presume it for him. Nor will it presume that the ruling of the trial court forestalled such request. There is nothing to show the ground upon which the action was dismissed. However, if the record discloses any sound reason, the judgment should be sustained. The facts of the case seem to be these: On April 7, 1915, respondent Enns entered into a written contract with plaintiff and appellant, whereby he guaranteed plaintiff payment for certain goods, to be purchased by one Carpenter, designated a salesman. The guaranty having been accepted, plaintiff furnished Carpenter merchandise at various times until March 8, 1917, at which time there was a balance due on account in the sum of $787.33. Carpenter died some time in August, 1917, with the indebtedness still unpaid, and the plaintiff brought this suit to recover upon the contract of guaranty. The contract included the following proviso:

"It is also understood that the undersigned sureties will not be called upon to make good any indebtedness which may be incurred by the salesman under this contract, except only in case that the salesman fails to pay such indebtedness after a reasonable effort has been made by the company to collect the same from him."

After setting up the contract and the fact of account unpaid, plaintiff pleaded that Carpenter, "at the time of his death was insolvent, and left no estate out of which said amount could be paid or could be made; and that, upon ascertaining the fact of the said Carpenter's death, and of his insolvency, plaintiff made demand upon the defendants for the payment of said balance. There was no allegation whatever of any attempt by plaintiff to collect from Carpenter prior to the time of his death, or from

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