SUNSET MILLING GRAIN CO v. ANDERSON

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District Court of Appeal, Fourth District, California.

SUNSET MILLING & GRAIN CO. v. ANDERSON.*

Civ. 1952.

Decided: April 17, 1952

Forster & Gemmill, Los Angeles, Stickney & Stickney and Edward Strop, San Diego, for appellant. Charles B. DeLong, San Diego, for respondent.

Plaintiff commenced this action to recover judgment on a series of nine promissory notes, dated from August 1, 1949 to October 28, 1949, inclusive, executed and delivered by defendant O. E. Anderson to plaintiff. In his answer to the complaint, defendant admitted the execution and delivery of the notes; alleged that they were made without consideration; that prior to and on August 1, 1949, one Ralph Bangenter was the field representative of plaintiff and one C. Trevor Sawday was the salesman and representative of plaintiff in San Diego county. He further alleged that on or about August 1, 1949, the said representatives stated to the defendant that one Milton Morgan had been operating a feed business in San Diego county which he was then selling out; that one Charles Brust had been buying plaintiff's feed through said Milton Morgan; that Morgan had taken promissory notes of Brust; that Morgan had given them, with duplicate notes of his own to Sunset Milling and Grain Company for the said feed; that the promissory notes given and to be given by Brust were and would be secured by a chattel mortgage upon chickens which Brust was raising; that as a bookkeeping procedure the Sunset Milling and Grain Company would desire a promissory note from defendant personally, to be sent with each promissory note that was taken from Brust, but that defendant would not be personally responsible for any of the bills or notes of Brust or for his own notes in a like amount. It was further alleged that on August 1, 1949, the said Trevor Sawday did, on behalf of plaintiff and as its agent, make, execute and deliver to defendant an instrument, in writing, as follows:

‘August 1, 1949.

‘To Whom It May Concern:

‘I. C. Trevor Sawday, am an official representative of Sunset Milling and Grain Co., 1498 East 4th St., Los Angeles, Calif.

‘I have informed O. E. Anderson, owner of the Anderson Feed Store at 455 National Ave., Chula Vista, Calif., that he will in no way be responsible for the collection of the feed bills incurred by C. J. Brust, Valencia St., Spring Valley, and that all shipments of feed and covered by a chattel mortgage made out in favor of Morgan's Feed Store, Lemon Grove, Calif., and the Sunset Milling and Grain Co. The Sunset Milling and Grain Co. will accept and notes and issue a credit for the amount of the note to the Anderson Feed Store without any financial responsibility to the Anderson Feed Store.

‘Signed:

‘C. Trevor Sawday

‘Representative of Sunset Milling and Grain Co.,

‘1498 East 4th St.,

‘Los Angeles, Calif.’

Defendant further alleged that the representation of Bangenter and Sawday that the promissory notes of Brust were and would be secured by a chattel mortgage was wholly false and untrue and that there was, in fact, no security for said promissory notes; that the defendant, believing and relying upon said representation, sold feed manufactured by plaintiff to said Brust, taking his promissory notes therefor and did send said notes with defendant's promissory notes of equal amount to the plaintiff; that each of the promissory notes set forth in the complaint is a duplicate of a promissory note executed by Brust and representing a sale of plaintiff's feed to him; that on or about June 7, 1950, plaintiff filed an action against Brust on the promissory notes given by him and recovered a judgment against him in said action.

No affidavit denying the genuineness and due execution of the foregoing quoted instrument was filed by the plaintiff.

The cause was tried before a court sitting without a jury. The promissory notes were admitted in evidence and proof was adduced on the part of the plaintiff that they had not been paid, although payment had been demanded. Plaintiff rested, whereupon defendant moved for judgment of nonsuit. Plaintiff then moved to reopen the case to present further testimony and in connection therewith made a formal offer of proof of the following facts: That Sawday had no authority to act for plaintiff in a financial transaction and had no authority to bind plaintiff by the writing set up in the answer; that in response to demands for payment of the notes, defendant acknowledged his liability and promised to pay them; that defendant made no mention of the letter until October 19, 1950, and that plaintiff had no knowledge of its existence until that month; that in November, 1949, defendant acknowledged his liability on the notes and stated that if plaintiff failed to collect from Brust, he would pay the notes; that the Brust notes were each payable to defendant and by him endorsed to plaintiff as security for the notes sued upon; that Sawday had nothing to do with the transaction under which the notes sued upon were executed and delivered; that said notes were in payment of the purchase price of merchandise sold and delivered to defendant; that Brust was a customer of the defendant and not of the plaintiff; that plaintiff sold no merchandise to Brust; that all of the merchandise covered by the notes here sued upon was sold to defendant, who, in turn, sold it to Brust.

The trial court denied plaintiff's motion, sustained an objection to the additional offered evidence and granted a nonsuit and judgment upon the ground that the agreement pleaded in the answer and not denied by plaintiff was a complete defense to plaintiff's complaint. Plaintiff appeals from the judgment and the sole question involved is whether the court erred in granting the motion for judgment of nonsuit.

The motion for nonsuit was presented at the close of plaintiff's case. Its purpose and effect are those of a demurrer to the evidence, and the trial court, therefore, must assume the truth of and accord full credit to all relevant evidence that is favorable to the plaintiff. To grant the motion was erroneous if a judgment in favor of the plaintiff would find support in substantial evidence or inferences to be drawn therefrom. Vol. 5 Cal.Jur. 10-Yr. Supp., Sec. 35, pp. 267–268. As was said in Re Estate of Flood, 217 Cal. 763, 768, 21 P.2d 579, 580:

“* * * A nonsuit or a directed verdict may be granted ‘only when, disregarding conflicting evidence and giving to plaintiff's evidence all the value to which it is legally entitled, herein indulging in every legitimate inference which may be drawn from that evidence, the result is a determination that there is no evidence of sufficient substantiality to support a verdict in favor of plaintiff if such a verdict were given.’ Newson v. Hawley, 205 Cal. 188, 270 P. 364; Perera v. Panama Pacific Int. Exp. Co., 179 Cal. 63, 175 P. 454; [In re] Estate of Sharon, 179 Cal. 447, 177 P. 283; [In re] Estate of Gallo, 61 Cal.App. 163, 175, 214 P. 496; 24 Cal.Jur., pp. 912–918. Unless it can be said as a matter of law that, when so considered, no other reasonable conclusion is legally deducible from the evidence, and that any other holding would be so lacking in evidentiary support that a reviewing court would be impelled to reverse it upon appeal, or the trial court to set it aside as a matter of law, the trial court is not justified in taking the case from the jury. Umsted v. Scofield Eng. Const. Co., 203 Cal. 224, 228, 263 P. 799.”

The evidence must be interpreted most strongly against the defendant. If there is any evidence tending to sustain the plaintiff's action, or if the evidence is conflicting, a nonsuit should be denied without passing upon the sufficiency of the evidence. Marchetti v. Southern Pac. Co., 204 Cal. 679, 684, 269 P. 529. In the instant case the evidence was that the notes sued upon were executed and delivered to plaintiff, and, unless controverted by other evidence, it is to be presumed that they were given for a sufficient consideration. Section 1963, subd. 21, Code Civ.Proc. It was also shown that the notes were unpaid. Unless it can be said as a matter of law that the writing of August 1, 1949, signed by Sawday, constituted a complete defense to plaintiff's action, the judgment must be reversed.

It is defendant's contention that plaintiff's failure to file an affidavit under section 448 of the Code of Civil Procedure not only resulted in an admission of the genuineness and due execution of said writing but also was an admission that Sawday, who signed the letter, had authority to bind the plaintiff thereby. We conclude that this contention is without merit. The failure to file the affidavit merely means that the plaintiff admits the due execution and genuineness of the instrument; that the instrument was signed and delivered and that it was not spurious. Nothing more. As was said in Miller v. McLaglen, 82 Cal.App.2d 219, 224, 186 P.2d 48, 51:

‘Failure to file an affidavit does not preclude a plaintiff from making any defense whatever to the affirmative allegations of the answer. He could, by evidence, controvert the instruments upon any and all grounds except that he could not controvert their due execution or their genuineness. He could controvert the instruments by evidence of fraud, mistake, undue influence, mental incapacity, want of consideration, failure of consideration, compromise, estoppel, that they were void because not fairly made or fully comprehended; he could question their legal effect; he could attack them by any other defense that would be open if the instruments were the basis of an action.’ (Citing many cases.)

See also Butler v. Stratton, 95 Cal.App.2d 23, 28, 212 P.2d 43; Sparks v. Sparks, 101 Cal.App.2d 129, 134, 225 P.2d 238; and McDonald v. Hewlett, 102 Cal.App.2d 680, 689, 228 P.2d 83.

It is to be noted that the promissory notes sued upon are dated August 1, 1949, and subsequent thereto, and that the quoted letter is dated August 1. It is by no means clear that the writing purports to absolve the defendant from liability for transactions occurring subsequent to the date of the writing. Plaintiff would be entitled to show that the instrument has no relationship to the claims sued upon. Fox v. Stockton, C. H. & A. Works, 73 Cal. 273, 15 P. 430; Newsom v. Woollacott, 5 Cal.App. 722, 91 P. 347. The writing involved was addressed ‘To Whom it May Concern’ and plaintiff's name is not affixed thereto. The signature is that of C. Trevor Sawday and the document is a memorandum of what was said by Sawday to defendant. It does not contain any statement to the effect that it is a writing authorized by the plaintiff or that it is signed by Sawday as a representative of plaintiff, and even if it were signed in a representative capacity, it cannot be said as a matter of law that it binds the plaintiff. Benedict v. Wilson, 10 Cal.App. 719, 103 P. 350. Since the writing does not on its face purport to have been made by plaintiff, an admission that it was genuine and duly executed does not bar plaintiff from showing that it was not authorized by the plaintiff corporation and was without consideration. Myers v. Sierra Valley, Etc., Ass'n, 122 Cal. 669, 675, 55 P. 689.

Judgment reversed.

MUSSELL, Justice.

BARNARD, P. J., and GRIFFIN, J., concur.