Imperial-Yuma Production Credit Assn. v. Shields

GRIFFIN, J.

On February 28, 1944, plaintiff instituted this action alleging that a promissory note in the sum of $6,281.12, payable August 8, 1940, was made and executed by defendants; that the sum of $2,858.64 had been paid thereon, and that there was a past due balance of $3,422.48 and interest from June 26, 1943; that defendant executed a crop and chattel mortgage as security therefor and that all the crops secured thereby were disposed of and no security for the payment of the note was available. Judgment was sought for the balance due.

Defendants answered, admitted the execution of the note, but denied that there was any balance due and owing. In a cross-complaint they alleged that the note was given as part of a “farming finance arrangement” based upon an “estimated advance budget system”; that it was the practice of plaintiff, under its arrangement, to take possession of crops grown by defendants, store and market them at plaintiff’s pleasure and credit defendants on their note; that on one occasion plaintiff took 1,010 sacks of wheat, of an estimated value of $2,220, and sold them, but only credited defendants with $299.78; that defendants planted a crop of barley for pasture and that plaintiff failed to pasture the crop at the proper time but later pastured 120 acres and only credited defendants with $298.88 as income therefrom; that by the neglect of the plaintiff, defendants lost approximately $3,500 and were therefore entitled to an additional credit of $3,201.14; and that certain stock in plaintiff company, owned by defendants, was sold for $650 without crediting defendants’ account therewith. Defendants and cross-complainants prayed that plaintiff take nothing and that they recover $3,470.24.

[934]

Plaintiff denied generally the allegations of the cross-complaint. After trial, the jury returned a verdict as follows: “We . . . find for the defendants and cross-complainants . . . in the sum of $2,033.78 over and above $3,422.48 claimed by plaintiff. ...”

Judgment was entered accordingly. Plaintiff moved for a new trial on all the statutory grounds (including insufficiency of the evidence) which motion was granted.

Two points are involved on this appeal. Defendants argue first that plaintiff had no right to sue on the note in question since it had written on it: “This note is executed, delivered and accepted, not in payment of, but for the purpose of renewing the following described note: Note for $7,118.00 dated August 9, 1938.” The renewal note sued upon was offered in evidence. Defendants’ counsel objected “because it is not the instrument the suit was brought on.” As we construe the contention, it is now argued that since the note sued upon is a renewal note, it only extended the time of payment and therefore plaintiff was obliged to sue upon the original note which was the “real obligation” i. e. “the debt.” Counsel for defendants frankly admits that he has “searched diligently for some authority directly in point” supporting his argument but that “the search has been without avail.”