First National Bank v. Hurford & Brother

Miller, J.

i. railroad tion : evidence. —I. The appellants assign seventeen errors, but only those urged in argument will be passed upon, They arise upon the admissibility of certain testimony, on instructions given and retused, and on the sufficiency of the evidence to support the verdict.

The court, against plaintiff’s objection, permitted the defendant F. P. Hurford, as a witness, to state, that, at the public meeting of the citizens of Council Bluffs at which the written proposition of Blair and Walker was considered and accepted, Mr. Pusy, holding the written, proposition in his hand, said “that the Cedar Rapids and Missouri River R. R. would not extend their road to Council Bluffs within the time therein named, unless the citizens would donate $30,000, to be paid in land and money, at the option of the subscribers ; also secure the right of way through our city, and also donate eight acres of land within the city limits, for the purpose of erecting warehouses, shops, freight and passenger dopots, car and *584 round-houses and side tracks; and to give other testimony Of statements made in that meeting by the same and other persons, neither Blair nor Walker being present.

This evidence was clearly inadmissible. There is no evidence tending to show that Pusey, or any one else, was in any way authorized to speak for Blair and Walker in their absence, or for the railroad company represented by them. It is shown, that they made their proposition in writing. The testimony objected to was, in its nature, hearsay, and also tended to vaiy or add to the terms of the written proposition, and the court erred in admitting it to to the jury. 1 Greenl. Ev. §§ 87, 99, 275, 276; Conger v. Converse, 9 Iowa, 554; Pilmer v. The Bank, etc., 16 id. 321.

The objection urged by appellant’s counsel to the fifth answer in chief of J. P. Cassady's deposition, rests upon similar grounds and should have been sustained.

2. evidence : paroi evidence. There was no error in overruling the plaintiff’s objections to the sixth and eighth answers of the same witness, nor those made to the eighth and ninth answers jn chief of Pusey, the eighth in chief of Turley, and the fifth of Haas. The rule, that prior or contemporaneous parol evidence is inadmissible to contradict or vary the terras of a valid written instrument, is not infringed by the admission of parol evidence, showing that it never had any legal existence or binding force, either by reason of fraud or want of consideration. 1 Greenl. Ev. § 284; Bowman v. Torr, 3 Iowa, 571; Ring v. Ashworth, id. 454; Levi v. McCraney, Morris, 124.

It is averred in the answer that the note sued on was obtained by the payee through false and fraudulent representations, and without any consideration whatever given therefor. This evidence bears upon these averments, and was properly admitted.

*585 3. contract : provisory™: note' *584 II. It is urged by the appellant that 1 ‘ the verdict is not *585 sustained by sufficient evidence,” and that the court erred in overruling his motion for a new trial, As already seen, the defense was threefold, namely; want of consideration, fraud, and failure of consideration. Does the evidence sustain either of these defenses ? We think clearly not.

The promissory note imports that it was made upon sufficient consideration. Parsons on Contracts, 5th ed. 328; Revision of 1860, § 1826; Veach v. Thompson, 15 Iowa, 380; Sullivan v. Collins, 18 id 223; Butler v. Byington, 14 id. 594.

t. railroad conSaeraáon!' The burden of proving that there was no consideration rested on the defendant. In this he has entirely failed. On the contrary, the evidence shows affirinatively that the note was founded on a valid and valuable consideration. The consideration for the subscription of $1,000 by the defendant was the location and construction of the Cedar Rapids & Missouri River Railroad to Council Bluffs as specified in the written proposition of Blair and Walker to the citizens of that place ; this subscription of $1,000 was changed and superseded by the execution of the first note, and that note was satisfied and taken up by the payment of $100, and the giving of the note sued on. The agreement of Blair and Walker to build the Railroad to Council Bluffs was a valuable consideration for the original subscription by defendants, whether that agreement was performed or not. 1 Parsons on Contracts, 448, and numerous cases there cited.

The execution of the first note for the subscription made, and that of the one substituted for the first note, were only changes in the form of the original promise, and there being a valid consideration for such original promise, the same consideration supports the note sued on.

*586 5.-fraud. *585 The evidence also fails to establish the alleged fraud. *586 While there was evidence that Blair and Walker stated to the defendants that they would not construct their Railroad to Council Bluffs unless the people made the required donations, there was no evidence that this statement was false or fraudulent, or that the road would have been built to Council Bluffs if such donations had not been made, or that there had been a previous determination to build the road to that place, or that Blair and Walker were not in fact the authorized agents of the railroad company, or that they did not intend to, or did not in fact appropriate the donations received, in good faith, to the construction of the road. On the other hand, the evidence abundantly shows that they were the authorized officers and agents of the railroad company ; that there had been no prior determination to construct the road to Council Bluffs; that the donations received were faithfully appropriated to the building of the road ; and that everything promised by them has been performed.

Without proof, fraud will never be presumed. The party alleging it must prove it as any other material fact. Moore v. Parker, 25 Iowa, 355; Wallace v. Bergen, id. 456; Haltam v. Todhunter, 24 id. 166; Oaks v. Harrison, id 179.

III. The defendants in their amended answer, aver that “ the Cedar Rapids and Missouri River Railroad Company, by their propositions to the citizens of Council Bluffs as an inducement to the execution and delivery of the note sued on in this case, stipulated and agreed to erect and provide, upon the land donated to them for depot puposes, passenger and freight depots, machine shops, engine and car-houses and side tracks; that notwithstanding said land was donated to said railroad, it has failed to make such erections and improvements, by reason of which failure the benefits and advantages of the *587 extension and location of said road were lost to these defendants and others, the said citizens who executed and delivered their note aforesaid, and for the consideration aforesaid.”

This we take to be a plea of failure of consideration. In the second clause of the original contract it is stipulated that “ eighty acres of land, suitable for passenger and freight depots, machine shops, engine and car-houses, and side tracks, and within two miles of the Pacific House are to be furnished free of any expense to the company.”

There is no other competent evidence of any agreement on the part of the railroad company to make the specified improvements than that above quoted ; no time was fixed in which such improvement would be made, and the evidence shows that only an undivided interest in eighty acres of land in the required locality, has ever been made or offered to be made to the company.

By the second clause in the proposition of Blair and Walker, the railroad company required the eighty acres of land for the objects and purposes mentioned therein. They no doubt contemplated making the improvements at some future time, and therefore required the donation of a sufficient amount of land for that purpose, but no time was fixed in which they intended to make the contemplated erections and improvements, and they may yet do so.

Again, the thirty thousand dollars, of which the note sued on is a part,' was to be paid within thirty days after the track of the railroad should be laid to the Council Bluffs depot.

The track was laid according to agreement, and this money became due and payable thirty days thereafter. And, in view of all these facts, it cannot be legally said *588 that the consideration of the note has failed either in whole or in part.

7. instkucthetici state of faots. IV. Several errors are assigned on the giving and refusing of certain instructions. It wiil not be necessaay, however, to notice any but the first instruction in the charge of the court. It is as follows : “If you find, from the evidence, that, on br about the 9th day of July, 1866, John I. Blair and W. W. Walker, fraudulently pretending to act for the Cedar Eapids and Missouri Eiver Eailroad company, fraudulently represented, among other things to the citizens of Council Bluffs, that, unless they would pay or secure to be paid to said railroad company the sum of $30,-000, the railroad of said company, then under process of construction, would not be extended to said city of Council Bluffs, that said railroad company, at and before the time of making such representations by the said Blair and Walker, had determined to extend their said road to Council Bluffs ; that said Blair and Walker, at the time of making such representations, did not, in fact, represent the said company, but thereby fraudulently intended to extort from said citizens of Council Bluffs the said sum of $30,000, and to appropriate the same to themselves; that the defendants, relying on the truth of said representations, and believing that the donation of said $30,000 was necessary to secure the extension of said railroad to Council Bluffs city, executed their note, in consideration thereof, on or about the tenth day of July, 1866, to said Blair and Walker for the sum of one thousand dollars, payable within thirty days after the completion of said Cedar Eapids and Missouri Eiver Eailroad to said Council Bluffs city, as their part of the subscription toward and making up said sum of thirty thousand dollars ; that said Blair and Walker fraudulently appropriated the same to their own use, and without the knowledge on the part of *589 said company of any such transaction, and that said representations, constituting the consideration of said note, was false and fraudulent, and we believe by the defendants to be true at the time they executed said note, such procurement of said note was fraudulent.”

This instruction is in violation of the rule (laid down in Moffet v. Cressler, 8 Iowa, 122, and recognized in Trustees of Iowa College v. Hill, 12 id. 462), “that it is erroneous to instruct upon a hypothetical state of facts of which there was no testimony.” There was no competent testimony that Blair and Walker had made any fraudulent representations of any kind to the citizens of Council Bluffs, and this instruction, being based upon the hypothesis that there was evidence from which the juiy might find that they had made such fraudulent representations, was erroneous. So, also, there was error in assuming that there was evidence from which the jury might •find that “Blair and Walker and the time of, and in making such representations, did not in fact represent the company but thereby fraudulently intended to extort,” etc.; and so in regard to other like hypothesis in this instruction.

Other instructions given by the court are also erroneous, but as the judgment must be. reversed for the errors already noticed, they will be passed without further comment.

The judgment of the circuit court is

Eeversed.