Am. Nat. Bank Of Bluefield v. Ritz
| Decision Date | 27 February 1912 |
| Parties | AMERICAN NAT. BANK OF BLUEFIELD. v. RITZ. |
| Court | West Virginia Supreme Court |
AMERICAN NAT. BANK OF BLUEFIELD.
v.
RITZ.
Supreme Court of Appeals of West Virginia.
Feb. 27, 1912.
Rehearing Denied April 26, 1912.
Banks and Banking (§ 116*) — Functions and Dealings — Representation by Officer—Notice.
Knowledge by one of the officials of. a bank, acquired in a capacity other than as its representative, relating to infirmity in commercial paper offered for discount, is not notice to the bank when that official is also an officer of the corporation seeking the discount and has an interest in the transaction so adverse to the bank that the reasonable presumption is that he would not communicate the knowledge to it.
[Ed. Note.—For other cases, see Banks and Banking, Cent. Dig. §§ 282-287; Dec. Dig. § 116.*]
Error to Circuit Court, Mercer County.
Action by the Americas National Bank of Bluefield against Harold A. Ritz. From a judgment for defendant, plaintiff brings error. Reversed, and new trial awarded.
[74 S.E. 680]Sanders & Crockett, for plaintiff in error.
A. W. Reynolds, D. E. French, John M. McGrath, and Russell S. Ritz, for defendant in error.
ROBINSON, J. By this action in debt, the plaintiff bank seeks to recover from defendant the amount of two negotiable notes which he endorsed. The notes were made by the Southern West Virginia Fuel Company, and were discounted by the plaintiff for the benefit of that company.
Fowler, at whose request defendant endorsed, was president of the fuel company, and also president of the bank—a director in both corporations. Defendant also was a director in both corporations.
Defendant filed a special plea in which he avers, substantially, that he was merely an accommodation endorser of the notes at the request of Fowler as president of the fuel company; that Fowler represented to him that the company was sorely in need of funds and money must be raised for its use by discounting notes; that he signed the notes with a distinct agreement between himself and Fowler that the other directors of the company would endorse them before they were discounted; that it was also agreed that the notes should not be used until a writing was signed by all the endorsers stipulating that the directors of the company as endorsers were liable only in proportion to their stock; that such a writing was prepared by defendant and was signed by him, Fowler and Shands; that Fowler was to obtain the signatures of the other directors to this writing as well as to the notes; that, notwithstanding these agreements, Fowler had the notes discounted at the bank, endorsed only by himself, the defendant and Shands, without the endorsement of the four other directors and without securing these others to sign the writing relating to the extent of liability; and that, at the time the notes were discounted, the bank had notice of these agreements in the premises and was therefore advised of the infirmity of the paper in relation to defendant when it became the holder of the same.
A trial by jury resulted in a verdict and judgment for defendant. Plaintiff, by writ of error, comes seeking a reversal.
Defendant rests his case on the assertion that the...
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