MCGUFFIN v. COYLE & GUSS

MCGUFFIN v. COYLE & GUSS
1906 OK 5
86 P. 962
16 Okla. 648
Decided: 01/06/1906
Supreme Court of Oklahoma

L. K. MCGUFFIN
v.
COYLE AND GUSS.

Error from the District Court of Payne County; before John H. Burford, Trial Dudge.

DISSENTBY: BURWELL

DISSENT: Dissenting opinion by

BURWELL, J.:

¶1 A recovery on the contract involved in this case is denied by the majority of this court under the theory that a contract taken by an officer of a railroad corporation in his individual name for the payment of money to himself, in consideration of the corporation performing some act, is presumptively for his personal benefit and in violation of his duties to his principal and therefore void as against public policy.

¶2 My brethren evidently desired to fix a high standard for the conduct of corporate officers and agents by condemning a contract taken in the name of such; but in this attempt they have in effect branded as corrupt and dishonest or at least as corrupting in its tendencies, a simple obligation which is capable of a different interpretation. This in my opinion is unwarranted and in violation of the plain provisions of statutory enactment, and the general law of the land as declared by the text writers and the courts of last resort. Were the particular contract in question the only one to be affected by this decision, I might, although firmly convinced of the injustice the rule imposes, be content with recording my vote against it; but as many other similar contracts must be measured by the standard adopted, I feel impelled to express my disapproval and the reasons which have directed my mind to regard the act of an agent or officer of a corporation as honest, unless by its terms it is capable of no such construction, until by affirmative evidence it is shown to be corrupt and in violation of the rights of his principal.

¶3 The record in the case is short and there is but little room for disagreement as to the facts. I desire, however, to state them in the order of their occurrence so that they may be analyzed, weighed and considered intelligently in the light of the authorities which I hope to refer to and which I believe sustain the position here taken.

¶4 On July 29th, 1899, U. C. Guss and others, at the request of Henry E. Asp, Esq. (who was at the time the attorney for the A. T. & S. F. R. R. Co. for Oklahoma), and other officers of such company, incorporated and organized the Eastern Oklahoma Railway Company. This company was evidently organized as a construction company for the purpose of extending the lines of the Santa Fe company. A contract was then entered into with Coyle & Guss whereby they were to procure the right of way to Cushing, the Santa Fe company paying therefor by vouchers issued by Mr. Asp. The evidence is not clear as to whether this contract of Coyle & Guss was with the Eastern Oklahoma Railway company or with the Atchison, Topeka and Santa Fe Railway Company, but in the light of all the evidence it is fair to assume that it was with the latter. Still if it be determined that it was with the other company, the evidence shows that Coyle & Guss had a contract whereby they were to procure the right of way, and beyond this and the fact that the right of way was actually paid for by the Santa Fe Company, we are in absolute ignorance as to its terms and provisions.

¶5 Coyle & Guss then entered into a contract with the plaintiff in error (L. K. McGuffin) whereby he agreed to pay to them the sum of two hundred and fifty dollars, as shown by the following instrument which is the contract in controversy:

"($ 250.00) Cushing, Okla. 7-23-'01

"July 1st, 1902. If Santa Fe R. R. is built to Cushing by this date (July 1, 1902) A. T. & S. F. R. R. to Cushing, Oklahoma, in consideration of its being built for value received, as principals promise to pay to the order of Coyle & Guss, two hundred fifty dollars at Cushing Bank, Cushing, Oklahoma.

"This note is given upon the consideration that a failure to comply with the above requirements shall render this note void.

"(Signed) L. K. MCGUFFIN."

¶6 The right of way was obtained and the road built as agreed.

¶7 If the contract of Coyle & Guss was with the Santa Fe company, then Guss was not an officer of that company, unless it be said that the Eastern Oklahoma Railway Company was a mere agent of the Santa Fe company, and as such, its directors occupied confidential relations to the latter company. This is the view evidently taken by the majority of the court, and while I feel that such position is an extreme application of the rule, I contend that even if it be admitted, in the absence of evidence to the contrary, it must be presumed that Coyle & Guss acted as honest men in taking the contract in question, and with the full knowledge and authority of the Santa Fe company, and for a valuable consideration flowing from them to it. For aught the record discloses Coyle & Guss were to reimburse the Santa Fe company for the money advanced, by it for the right of way, in consideration of the right of way to take this and other like contracts; or these bonus contracts may have been taken under an agreement with the Santa Fe company in consideration of the service of Coyle & Guss in securing the right of way.

¶8 Either of these or any one of many other arrangements would be fair and permissible under the law. I admit that the mere fact that the contract is made payable to Guss, as one of the payees, (if it be held that he occupied a confidential relation to the Santa Fe company) is a circumstance which may be considered with other affirmative evidence in determining the question of fair dealing on his part with such company; but it is not alone sufficient to overcome the presumption of honesty. The most that can possibly be said is that the contract might be dishonest. The mind can as readily conceive of circumstances from which it could have sprung and wherein every act from the beginning to the consummation of the entire transaction could be influenced by integrity and uprightness. Therefore the court should have treated it as honest rather than dishonest; as having been executed for a valuable consideration, in preference to declaring it to be in violation of good morals and corrupting in its tendencies.

¶9 Where a contract is capable of two interpretations, one consistent with honesty and the other indicating fraud and a breach of duty, the former should be adopted. To hold otherwise would be to admit that the majority of men are unworthy of confidence and trust. The converse is not only true but has been recognized by the law for hundreds of years. Attention is directed to a few of the authorities:

¶10 Merrill v. Melchior, 30 Miss. 516:

"If a contract is susceptible of two interpretations, one legal and the other illegal, that interpretation shall be given to it which renders it valid."

¶11 Chitty on Contracts, vol. 2, p. 977:

"It is also a maxim in courts of equity, that wherever confidence is necessarily reposed by one, and the influence which naturally grows out of that confidence, is possessed by the other; and such confidence is abused, or influence exerted to get an advantage at the expense of the confiding party; a contract obtained by such means will not be permitted to stand, although it could not have been impeached if such confidential relation had not existed.

"The presumption of law, however, is in favor of the legality of a contract; and therefore, if it be reasonably susceptible of two meanings, one legal and the other not, that interpretation shall be put on it which will support and give it operation."

¶12 Guernsey v. Cook, 120 Mass. 501.

"The contract, if reasonably susceptible of two meanings, one legal and the other not, must indeed receive an interpretation which will support rather than defeat it, and the presumption is in favor of its legality."

¶13 Pomeroy on Contracts. Foot note No. 3 at bottom of page 365,

"The agreement must be legal or illegal, and it is not within the discretion of the court to refuse specific performance because an agreement savors of illegality; it must be shown to be illegal. This theory is certainly in accordance with the general view stated in the text, that the defense of illegality is often an unrighteous one which courts do not favor, and never sustain out of regard to the party urging it. If this be true, the burden most clearly ought to rest upon the one who alleges this illegality."

¶14 Current Law, vol. 1, page 638,

"A contract is to be held invalid only when it will admit of no other construction."

¶15 Equitable Loan & Security Co. v. Warring, et al, (Ga.) 44, S.E. 320,

"It will not be presumed that people intend to violate the law, and the language of their undertaking must, if possible, be so construed as to make the obligation one which the law would recognize as valid. All ambiguities are to be resolved in favor of legality and against illegality. The contract is to be held illegal only when it will admit of no other construction."

¶16 The supreme court of Nebraska in the case of Horton v. Rohlff, 95, N.W. Rep. 36. said:

"The rule is that the contract should be supported if possible rather than defeated. If a contract admits of more than one construction, one of which will render it inefficacious or nullify it, that construction should be adopted which will carry it into effect, for there is no presumption against the validity of contracts. Nor can we suppose that the parties sit down to make a contract providing for a particular event, when that very event would make it void."

¶17 Many other authorities might be cited to the same effect. This, however is unnecessary, as the general rule will hardly be denied. The contention in this case is that the contract on its face shows that it is against public policy.

¶18 This court had occasion to consider a similar instrument in the case of Enid Right of Way and Townsite Co. v. Lile (Okla.) 82 P. 810, in which the same doctrine was announced. I then, as in this case, recorded my view insisting that there was nothing about the contract which suggested fraud or a breach of trust on the part of the payee, or that could not be harmonized with fair dealing; and when I consider this contract and attempt to measure it by those rules which determine the question of public policy, I am forcibly impressed with the following language of Sir. G. Jessel, M. R., in the case of Printing & Numerical Registering Co. v. Sampson, L. R. 19 Eq. 462:

"It must not be forgotten that you are not to extend arbitrarily those rules which say that a given contract is void as being against public policy, because, if there is one thing more than another which public policy requires, it is that men of full age and competent understanding shall have the utmost liberty of contracting, and that their contracts, when entered into freely and voluntarily shall be held sacred and shall be enforced by courts of justice. Therefore, you have this paramount public policy to consider: that you are not lightly to interfere with this freedom of contracts."

¶19 To the same effect, is Hammon on Contracts, (bottom) page 388:

¶20 In the dissenting opinion in the case of the Enid Right of Way and Townsite Co. v. Lile, supra, it was insisted that a note given to a railway company for its own use and benefit, in consideration of the locating of a station or the right of way over a particular line, is valid and binding; but that a note taken by an officer of such company for his own use and benefit, without the knowledge or consent of his company, for the locating of a depot or of the line of road over certain localities is void as against public policy. Citing authorities in support thereof.

¶21 The opinion in this case, while intimating that the majority opinion in the Lile case possibly went too far in discussing the first proposition, maintains that the contract in question is for the individual benefit of Coyle & Guss and therefore void, and a recovery cannot be had thereon. Let us consider briefly this contention. If void, it must be for one or more of certain reasons suggested: First, because of failure of consideration; second, because under no circumstances can an officer of a corporation accept a contract from a third party to himself in consideration of the performance of an act by his company which may inure to the benefit of the maker of the contract, even though such corporate officer may have paid his company a valuable consideration therefor; or, third, because Coyle & Guss are not the real parties in interest. Neither contention can be upheld. Consideration for the contract must be presumed and the burden was on the defendant to plead and prove the contrary. Coyle & Guss had a right, in the trial court, to rely upon this well established principle of law. In Current Law, vol. 1, page 696, it is stated:

"A consideration will be presumed as to a contract under seal or a contract in writing."

¶22 Clarke v. Marlow, (Mont.) 50 P. 713:

"The expression 'value received' is not essential to the validity of a note, where no statute requires its use, as such paper at common law implies a consideration where none is expressed."

¶23 McClain v. Lowther, 35 W. Va. 297, 13 S.E. 1003:

"The drawing and delivery of a check implies the indebtedness of the drawer to the payee to the amount of the check, and in an action upon the check it is unnecessary to aver in the declaration any further consideration."

¶24 And in the case of Ash v. Beck, (Tex. Civil Court of App.) 68 S.W. 53, it is said:

"A written contract imports a consideration, and where none is expressed the real consideration may be shown, under proper allegations."

¶25 University of Des Moines v. Livingston, Adm., (Ia.) 10 N.W. 738:

"A written contract imports a consideration; but failure of consideration may be shown to defeat an action thereon."

¶26 There is no principle of law more familiar than the rule that where an action is commenced on a promissory note, consideration is presumed and if the maker claims failure of consideration he must plead and prove it. Kiesewetter v. Kress et al (Ky.) 70 S.W. 1065; Woodworth v. Vietch, Adm. 29 Ind. App. Court Rep. 589; Gallagher Adm. v. Kiley 115 Ga. Rep. 420; Brown v. Johnston Bros. 135 Ala. Rep. 608; Cox, Trustee v. Sloan, 158 Mo. 411, 57 S.W. 1052; Martin v. Patterson 27 S.C. 621, 2 S.E. 859; Nichols and Shepard v. Dedrick, Minn., 63 N.W. 1110; The Manistee Nat'l Bank v. Seymour, 64 Mich. 59, 31 N.W. 140; Young v. Shepard's Estate, 124 Mich. 552, 83 N.W. 403; Perot v. Cooper, Admx., 17 Colo. 80, 28 P. 391; Lipsmeier v. Vehslage, 29 F. 175.

¶27 In Page on Contracts, vol. 1, sec. 279, the rule is laid down as follows:

"At common law, negotiable contracts are said to import a consideration; that is, in the absence of evidence on the point, it will be presumed that there was a sufficient consideration; and it is for the party denying the existence of a consideration to show that there was none. This is true even if no consideration is recited on the face of the instrument, and words such as, 'value received,' are wanting."

¶28 The general rule as shown by these authorities, has been emphasized by legislative enactment. Section 774, Wilson's Rev. & Ann. St. of Okla. 1903, provides that:

"A written instrument is presumptive evidence of a consideration," and that "the burden of showing a want of consideration, sufficient to support an instrument, lies with the party seeking to invalidate or avoid it."

¶29 Similar statutes have been construed by other courts, as will be seen from the following cases:

¶30 Lowrey v. Danforth, 95 Mo. App. 441, 69 S.W. 39:

"A promissory note, whether negotiable or not, imports a consideration under Revised Statutes of 1899, sec. 894."

¶31 Tapley v. Herman, 95 Mo. App. 537, 69 S.W. 482:

"The instrument not only recited a consideration, but it imported one until some contrary showing was made, according to our Revised Statutes 1899, sec. 894."

¶32 The code of California provides:

"A written instrument in presumptive evidence of a consideration." And the supreme court of that state, in commenting thereon, in the case of Toomy v. Dunphy, 25 P. 130, said:

"This provision is general and applies to all contracts where a different rule is not expressly prescribed. And we think that, had the legislature intended that contracts, like the one in question, should state a consideration for the services to be rendered by the broker or agent, it would have expressly said so."

¶33 First M. E. Church, in Fort Madison, v. Donnell, Ia., 64 N.W. 412:

"The demurrer also presented the question of consideration. A contract in writing purports a consideration, under section 2113 of the code; and if a want of consideration is presented, it must be by answer."

¶34 There is in force in Kansas a statute similar to section 774 of our code. In the case of Fuller v. Scott, 8 Kan. 25, Justice Valentine said:

"An agreement to extend the time of payment of the note is a sufficient consideration to sustain the guaranty. Such an endorsement is a contract in writing as will import a consideration. (Comp. Laws, 351, S. S., 6, 7, Gen. Stat., 183, S. S. 7 & 8). And if the party who made the endorsement claims that there was no consideration for the guaranty, the burden of proof will rest upon him to show it, and he must show it by a preponderance of the evidence."

¶35 Waynick, et al. v. Richmond, et al., 11 Kan. 488, involved the interpretation of a bond for a deed, which instrument recited no consideration whatever. The court said:

"The instrument sued on, though in form a bond with a condition, is, in legal effect, an agreement to convey. 'A bond for money, with a penalty for not doing a certain thing, will be held to be a contract to do that thing.' Being a contract in writing, it imports a consideration: Gen. Stat. 183 ch. 21, sec. 7. The agreement then is as though it read, 'For value received, I hereby agree to convey etc.'"

¶36 Again, in the case of Roller v. Ott, 14 Kan. 609, it is declared:

"But the contract is shown to have been in writing, and therefore, unless the contract or the petition affirmatively shows that there was no consideration, the contract itself will import a consideration. Mere silence on the part of the petition or contract will not imply that there was no consideration. But, on the contrary, where the petition does not affirmatively show that there was no consideration, it will be presumed prima facie that there was a sufficient consideration."

¶37 In the trial of a defense to a written contract for want of consideration, it must not only affirmatively appear that the maker did not, in fact, receive any consideration, but also that the payee did not suffer any loss or detriment. In discussing this question, Mr. Justice Minshall, in the case of Dalrymple, Adm. v. Wyker, Adm., 60 Ohio St. 108, 53 N.E. 713, said:

"We think that it is well settled on principle and authority, that, in pleading a want of consideration as a defense to a note, it is necessary to aver that there was no consideration for the note; a mere averment that there was none moving to the maker, is not sufficient. For non constat, but that there may have been a consideration in loss or detriment to the promisee; and, if so, such loss or detriment is sufficient to support a promise based upon it." Citing authorities.

¶38 This brings us to the consideration of the right of Coyle & Guss to take the note in their own name. Under the law, could it be so taken, conceding that it was done in good faith, with the consent of the company? The most diligent search has failed to reveal a single authority which, when carefully analyzed, denies such right. I fully appreciate the fact that in the nation, in the state and by the individual there is a growing tendency to hold corporations and especially the railroad corporations, as well as their officers and agents, to a more strict account for their acts; but in this striving for rules that will more nearly do justice between these agencies and the individual, we should be careful that the mental vision is not so dimmed by sympathy for the weak that reason may fail to see the rights of the strong. The courts are not the creators of corporations, but the scales of Justice should be so balanced that these artificial persons of legislative origin would have no right less sacred than those of the individual, and no privilege denied to the humblest subject. They are strong because they are managed and controlled by the combined wisdom of many, while the natural person must battle alone. But the rich and the poor, the strong and the weak should be governed by the same law. If any other rule were adopted, evils resultant upon such a course would be many. The rights of all persons, natural and artificial, similarly situated, must, if justice is to be perpetuated, be controlled by the same rules of conduct. And in the determination of cases like the one now under consideration, the courts should take the law as it exists. Take it as declared by the legislative branch of the government, and as built up by the wisdom of the learned judges during the past centuries; and innovations upon long and well-established rules should be made only when it is apparent that they are fundamentally wrong, or that the changing conditions of civilization demand their modification.

¶39 If contracts of this kind are void, is it not rather strange that other courts have not seen the evil contained therein and stricken them down as they have done with other contracts which are corrupting in their nature? It is insisted by my brethren that they have, but as I view the cases relied upon, they are clearly distinguishable, and the majority opinion mistakes the contract, which may or may not have been the product of a fraudulent scheme, for fraud itself; and fraud will never be presumed, but must be proved by evidence, unless the court can say from common experience and knowledge of affairs, that it must in its tendencies necessarily be in conflict with an honest purpose or calculated to persuade those standing in confidential positions from paths of rectitude and duty; as, for instance, when an agent or officer of a corporation agrees, for a consideration, to give his vote or influence for the election of a third party to a corporate office. Contracts of that character, upon their face, show corruption. Lum v. McEwen, et al, 56 Minn. 278; Attaway, et al v. Third Nat'l Bank of St. Louis, 93 Mo. 485, 5 S.W. 16; Guernsey v. Cook, 120 Mass. 501; McDonald v. Haughton, 70 N.C. 393; Noel v. Drake, 28 Kan. 265; Wilbur v. Stoepel, et al, 82 Mich. 344, 46 N.W. 724.

¶40 But a contract which, prima facie, shows that the consideration is for the building of a line of road, where it is payable to the company, has finally been decided by this court ( W. B. Piper v. Choctaw Northern Townsite & Improvement Co. 16 Okla. 436, 85 P. 965) to be valid, and that recovery can be had thereon. The mere fact that such contract is payable to an officer of such company does not imply fraud or even suggest it.

¶41 In Clark & Marshall on Private Corporations, vol. 3, page 2294, sec. 758, it is said:

"A contract between an officer of a corporation and a third person is contrary to public policy, and therefore illegal and void, where it contemplates a fraud upon the corporation, or where, by giving the officer a secret profit or personal advantage, or otherwise, it places his private interests in conflict with his duty to the corporation."

¶42 It will be observed that practically all of the decisions and text writers use the words "secret interest." It frequently occurs that officers of corporations take notes in their individual names, and the policy of the courts has universally been to uphold them. The important question is, Was there a consideration?--as, for instance, where one borrows money from a bank and the cashier takes the note in his individual name. Would such a note be void as against public policy, even though it should show upon its face that it was in consideration of money advanced by the bank? Certainly not. And an action would lie in his individual name, as we shall presently observe.

¶43 In Clark & Skyles on the Law of Agency, vol. 2, page 1336, the rule is announced as follows:

"So where a promissory bill or note is made payable to an agent in person, or to an agent for his principal, or to an agent for the use of his principal, or to an agent as trustee, the promise is deemed to run to the agent, and he may sue thereon in his own name."

¶44 In the majority opinion it is stated:

"Now we take the true rule of law to be that where a note is made payable to a certain person or persons, as payee therein, and there is nothing in the wording of the note to indicate, and no showing in the evidence that any other person has any interest therein, the presumption will be that the note is for the personal benefit of the payee named therein."

¶45 As a general rule the above statement is correct, but this presumption is no stronger than the presumption that the note is for a valuable consideration and that it is without fraud and was taken with the full knowledge of the railroad company. Coyle & Guss are the legal owners of the notes, and it is immaterial whether they held the legal title for the railroad company or in their individual right. In either event they were entitled to recover. The authority of a railroad company to accept aid for the locating and maintaining of its line of road, or a depot, at a particular place, being established in favor of such right, contracts made payable to its officers and agents, in all fairness, should be measured by the same standard as similar contracts to cashiers of banks and officers of other corporations. The consideration stated in the note in controversy will support it as fully as though it had been given for money advanced or for the building of a house, or for the performing of any other future act. If the railroad could take such a note in its own name, it is elementary that it could take it in the individual name of its director or agent.

¶46 In Clap v. Day, 2 Me. 305, Chief Justice Mellon said:

"If a promissory note be made to the agent or treasurer of a private association, by his name, with the addition of his agency of office, he may have an action in his own name on the note, the addition of his character being but descriptio personae."

¶47 Another case is Johnson v. Catlin, 27 Vt. 87. The following rule was announced by the court:

"In cases of bills of exchange and promissory notes, a promise to an agent (naming him) and not his principal, but with the word, "agent" or "cashier" added to his name, is a promise to the agent as an individual, and the addition is simply descriptive of the person. And where the agent or cashier is the payee of the bill or note, which is accepted or given for value, he may, in an action in his own name against the acceptor or maker, recover upon the money counts."

¶48 North Carolina, in the case of Horah, Cashier v. Long, et al, 20, N.C. 416, declared:

"A note payable to A. B. cashier or order, and negotiable and payable at a particular bank, is payable to A. B. individually the word "cashier" being only descriptive of the person; and the expiration of the charter of the bank at which the note is negotiable and payable, will not, at law, affect his right to recover on it."

¶49 Another case worthy of consideration is the case of McHenry v. Ridgely, (Ill.) 35 Am. Dec. 110. Suit was commenced upon a note, which was in the following form:

"$ 400. Jacksonville, Nov. 4, 1836.

"On or before the 16th day of July next I promise to pay to E. W. Palmer or order, four hundred dollars, for value received.

"Witness my hand and seal,

"GEORGE MCHENRY, (Seal)"

¶50 The note was endorsed as follows:

"For value received, I assign the within note to T. Worthington.

"E. W. PALMER.

"Dec. 12, 1836.

"Pay to N. H. Ridgley, Esq., cashier or order.

"T. WORTHINGTON."

¶51 The court in discussing the issues said:

"The defendant pleaded three pleas in bar, in substance: (1) That the note sued on was assigned to the president, directors and company of the State Bank of Illinois, in the name of N. H. Ridgely, Esq., cashier of said bank, according to the usages of the bank, and that the legal and beneficial interest was, by said assignment, vested in the bank. (2) That the note is the property of the bank, and that the plaintiff has no interest in it. (3) That the note is the property of the bank and was assigned to the plaintiff, Ridgely, as the cashier, according to the custom and usage of the bank; and that Ridgely is merely the agent of the bank, without any property in the note sued on. To these pleas a demurrer was interposed by the plaintiff and sustained by the court. This decision is assigned for error.

"It is true, as a general proposition, that a corporation may not only sue in its own name, but, when its rights are asserted, it must sue in its corporate name; but the authorities upon this point and those referred to relative to the obligation of the principal, or the one beneficially interested in the suit, are not applicable to the present case. The law is well settled that, where a note is payable to bearer, or is endorsed in blank, a suit may be maintained in the name of any person who is the holder of the note, without his being required to show an interest in it, unless he possesses the note under suspicious circumstances; and if the question of mala fide possessio, which is one of fact, to be submitted to the jury, is not raised by the defendant, the court will not enquire into the rights of the plaintiff, but will consider possession of the note as evidence of property."

¶52 It is true that, under the statutes of Oklahoma, it is provided that every action must be prosecuted in the name of the real party in interest, but I do not deem it necessary to cite authorities to show that one who, as payee, holds the legal title to a promissory note, as agent or trustee, either expressed or undisclosed, is a "real party in interest" within the purview of the statute. It is customary to bring the action in the name of the party who holds the legal title. Cocke v. Dickens, Assignee & Co., 4 Yergers (Tenn.) 29; Stoll & Mathews v. Sheldon, 13 Neb. 207, 13 N.W. 201; Shepherd, et al v. Evans, 9 Ind. 260; Bird v. Daniel, 9 Ala. 302: Goodman & Mitchell v. Walker, 30 Ala. 482.

¶53 In Bryant v. Dona, 3 Gilman's Rep., 349, the supreme court of Illinois, in an action on a judgment, said:

"The sixth plea is clearly bad. It is a matter of no importance whether the plaintiff had any substantial interest in the subject matter of this proceeding, or whether it was commenced with his knowledge, or by his consent. It is sufficient if he had the legal interest. Of this the record affords conclusive proof. He was the plaintiff in the judgment against Phillips, and the cause of action against the plaintiff must be prosecuted in his name. If he has parted with the beneficial interest, the equitable assignee has the undoubted right to sue in his name to enforce the liability."

¶54 I have considered the record presented to this court and familiarized myself with the contentions of the respective parties, and firmly believe that the judgment is unsupported by the authorities and in conflict with those principles of justice which accords to every man that which is his own. The defendant comes into court upon a record which discloses that the company built the road as it was agreed it should. There was not a scintilla of evidence tending in the least to show that Coyle & Guss did not act in good faith, or that the note was taken secretly and without the knowledge of the company, or that the road had failed to perform the contract in any particular. No advantage was taken of the maker of the note and none was claimed by him. It was made voluntarily, with full knowledge as to its conditions, and having received the benefit of the expenditure of money which the note in suit presumptively influenced, at least in part, it is only fair that he should pay his debt according to the terms of such obligation. If the company had failed in any particular and Coyle & Guss paid no consideration for the note, the defendant could have pleaded and proved such fact and shown that they were simply the agents of the company, and reduced his liability in conformity with the demands of equity. Newton v. Turner, (La.) 25 Am. Dec. 173; Merrill v. Randall, 22 Ill. 227.

¶55 But having received the consideration named in the note, in the absence of fraud, which has not been established, the defendant cannot be heard to question the right of the payees to recover. Berry v. Barton, et al, 12 Okla. 221, 71 P. 1074; Felch v. Beaudry, 40 Cal. 439; Frost v. Harford, 40 Cal. 165; Wedderspoon v. Rogers, 32 Cal. 569; Monroe v. Fohl, (Cal.) 14 P. 514; Bank of Shasta v. Boyd (Cal.)., 34 P. 337; Wheeler v. Barr, et al (Ind.) 34 N.E. 591; Johnson v. Conklin, (Ind.) 21 N.E. 462; Blacker v. Dunbar, (Ind.) 9 N.E. 104; Offutt v. Rucker 27 N.E. 589; Nicolay v. Fritschle, 40 Mo. 67.

¶56 The note was fair upon its face. Unfairness has not been shown. The plaintiffs (below) have been deprived of a legal and equitable right, and the defendant apparently permitted to beat a just debt. The decision instead of promoting honesty and fair dealing, will encourage the dishonest and unscrupulous to adopt technicalities to escape their obligations.

¶57 I believe that public policy demands the rule for which I contend. However, my associates, after full consideration, felt constrained to adopt a different rule, which has become the law of this jurisdiction, and by it, all are bound.