Anamoose Nat. Bank v. Dockter
| Decision Date | 04 November 1927 |
| Docket Number | 5266 |
| Citation | 216 N.W. 206,56 N.D. 33 |
| Court | North Dakota Supreme Court |
Appeal from the District Court, McHenry County, Buttz, J.
Reversed.
Judgment of the lower court reversed, and judgment for the defendants Michael Dockter and J. M. Dockter on the verdict of the jury.
Peter A. Winter, for appellants.
There is a difference between an action brought by the receiver of a bank and where the action is brought by the bank itself, or where the action is brought between the immediate parties,--where the action is brought by the receiver on behalf of the depositors, the theory of estoppel would be invoked, not the law against proving consideration of a written instrument. First Nat. Bank v. Felt, 69 N.W 1057.
"A party for whose accommodation a note is given cannot recover thereon against the maker." Bank v. Smith (Iowa) 203 N.W. 803.
Where one of two joint makers of a promissory note signs the same as an accommodation to the payee, and without consideration moving to him, the payee cannot recover thereon, although there was a consideration as to the other makers. National Citizens' Bank v. Bowen (Minn.) 124 N.W. 241, citing 36 P. 265; 1 L.R.A. 594; 40 N.W. 57.
"Where a note or other obligation is given to a bank with the avowed obligation of it appearing as assets for the purpose of public inspection, those who purport to be liable upon the obligation are estopped as against creditors who would prejudicially be effected by the truth to assert a secret understanding that they were not to be held liable." Vallely v. Devaney, 49 N.D. 1107, 194 N.W. 906.
"If an acceptance is for the accommodation of the payee, the acceptor will not be liable to him." 8 C. J. 259.
"One giving a note to a bank for the purpose of enabling it to pass an examination is in case of subsequent failure of the bank estopped from asserting the defense of accommodation when sued by the receiver." Vallely v. Devaney, 49 N.D. 1107, 194 N.W. 903.
Wooledge & Hanson, for respondent.
"The promise of a bank officer to the signer of a note to the bank that such signer will not have to pay the note is not within the authority of the bank officer and is not binding on the bank unless specially authorized." Farmers Nat. Bank v. Ohman (Neb.) 199 N.W. 802.
"A note given to a bank for the interest of a defaulted note held by it, to enable it to pass the examination of the state bank examiner, is not for its accommodation within the rule that one for whose accommodation a note is given cannot enforce it." Skagit State Bank v. Moody (Wash.) L.R.A.1916A, 1215.
"One who signs a promissory note on the face thereof as an accommodation maker and who receives no personal consideration for the same is primarily liable to the payee on such note, and cannot plead as a complete defense and release the fact that the payee may have theretofore sued and compromised with a garnishee defendant." first Nat Bank v. Meyer, 30 N.D. 389, 152 N.W. 657.
Accommodation paper represents and is a loan of credit to the party accommodated. It is not necessary that he should be a party to the paper. Rea v. McDonald (Minn.) 71 N.W. 11.
"Where defendant indorsed a note payable to a bank, on the cashier's assurance that he would not be held liable thereon, such assurance will not protect him from liability as the cashier exceeded his authority as an agent of the bank in making it." Thompson v. McKee, 5 Dak. 172, 37 N.W. 367.
This is an action upon a promissory note.
The defendants in their answer admit the making of the note, but allege that the note was given for the accommodation of the plaintiff bank, and was without consideration. It was further alleged, that the president of the bank represented to the defendants, that the note of one Dockter was long past due, that the bank examiner had ordered it charged off the bank assets, or fixed up in some manner satisfactory to the bank examiner, and at the said time, promised and agreed with the defendants, that they would never be called upon to pay or settle for the note mentioned in plaintiff's complaint.
At the close of the testimony the plaintiff moved for a directed verdict against all of the defendants, and thereafter a motion for judgment notwithstanding the verdict was granted from which two of the defendants, viz., Michael Dockter and J. M. Dockter appeal.
The note in suit "exhibit 1" represents an indebtedness of Jacob Dockter due to the plaintiff bank. It is a renewal of a series of notes beginning in September 1913, as shown by plaintiff's exhibit two and three. "Exhibit 4" is a renewal of "exhibits 2 and 3." "Exhibit 9" is a renewal of "exhibit 4." On October 31, 1916, Jacob Dockter's indebtedness to the bank was renewed and represented by two notes "exhibits 11 and 12" and in 1917, 11 and 12 were renewed by "exhibits 13 and 14." "Exhibits 16 and 17" are renewals of 13 and 15, "exhibit 8" is a renewal of "exhibit 16." "Exhibit 5" is a renewal of "exhibit 8." "Exhibit 1," the note in suit, is a renewal of "exhibit 6." When the notes were renewed the bank kept the old notes as collateral to the new notes.
It appears from the examination of the exhibits, that Michael Dockter signed only the one note, "exhibit 1," and he testified, that the president of the bank called him in and asked him to sign "exhibit 1," "so that it will look good to the examiners."
J. M. Dockter signed "exhibit 1" and "exhibit 5," and while his name appears on "exhibit 4" he denies that it is his signature. He testified that Mr. Schmidt told him to sign the notes, "exhibit 5" and "exhibit 1," he said, "we just want this for the bank when the bank examiner comes around so that it looks better for the bank." He said, Ques. "He said he wanted you to renew up the note you signed before?" Ans. "Yes." Ques. "And that is why you signed the new note was because you had to renew up the old note?" Ans. "Yes, for the bank." Ques. "And that was the reason you had to sign the old note?" Ans. "Just the same." Ques. "And you had only signed one note before?" Ans. "Yes the 1920 and the 1922 note." J. M. Dockter's name does not appear on "exhibit 6" the 1920 note, but it does appear on "exhibit 5," dated October 17, 1919. If he only signed two notes as he claims, then he signed "exhibit 5" and "exhibit 1," and he may be mistaken about the year, it being 1919, instead of 1920 that he signed one of the notes.
It is the contention of the appellant that the note in controversy was signed by the defendants solely as an accommodation to the bank, and not as an accommodation to their father, and that, that was a question of fact for the jury. The court in submitting the case to the jury gave the following instruction:
"On the other hand gentlemen of the jury, if the situation is as contended by these defendants, that they signed the note simply to help the bank, that they were lending their credit to the bank, that they were accommodating the bank by signing the note, solely for the purpose of making that note good enough so that the bank could carry the note in its assets, and satisfy the bank examiner with reference to it, and they were not lending their credit to the elder Dockter, were not doing anything to assist him about this note, then the bank cannot recover."
From this instruction the defendant Michael Dockter having signed only "exhibit 1," if the jury believed his testimony, that he signed only for the accommodation of the bank, it was their duty to find in his favor, for while that was a renewal of the old notes, Michael Dockter had not signed any of the old notes, was obligated on none of them, and he did not sign a renewal of any past obligation of his.
So far as J. M. Dockter is concerned, he admits he signed "exhibit 1" and "5," and denies that he signed exhibit "4" being the renewal note of February 1915. He was required to give three different samples of his signature, and it was a question of fact for the jury to say whether or not he signed "exhibit 4." He testified that he signed "exhibit 5" and "exhibit 1" for the accommodation of the bank, the president of the bank telling him at the time that he only wanted him to sign the note so as to make it look good when the bank examiner came around. As far as J. M. Dockter is concerned, if the jury believed his testimony that he did not sign "exhibit 4," and that he signed "exhibit 1," and "exhibit 5" at the request of the bank for the purpose of making the note look good to the bank examiner then the jury would be justified under the instruction in finding for the defendant, J. M. Dockter, the notes which he signed to deceive the bank examiner not being a renewal of any of his obligations.
The trial court granted the motion for judgment, notwithstanding the verdict, upon the theory, that it was error to admit in evidence the statements of the defendants, that they signed the notes for the accommodation of the bank to make them look good to the bank examiner. That the admission of such testimony was a violation of the rule, that parol evidence is not admissible to vary the terms of the written contract, and in support of this theory he relies upon First State Bank v. Kelly, 30 N.D. 84, 152 N.W. 125 Ann. Cas. 1917D, 1044; Vallely v. Devaney, 49 N.D. 1107, 194 N.W....
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