Anfenson v. Banks

• Decision Date: 26 June 1917
• Docket Number: No. 30186.,30186.
• Citation: 163 N.W. 608,180 Iowa 1066
• Parties: ANFENSON ET AL. v. BANKS ET AL.
• Court: Iowa Supreme Court

180 Iowa 1066

163 N.W. 608

ANFENSON ET AL.

v.BANKS ET AL.^a1

No. 30186.

Supreme Court of Iowa.

June 26, 1917.

Appeal from District Court, Story County; R. M. Wright, Judge.

The opinion states the nature of the case. Reversed.Geo. A. Underwood and John Y. Luke, both of Ames, for appellant.

Dyer, Jordan & Dyer and Goodykoontz & Mahoney, all of Boone, and B. B. Welty, of Nevada, Iowa, for appellees.

WEAVER, J.

In the year 1903, one Starr, who was conducting a small private banking business at the village of Kelley, in Story county, Iowa, sold the same to E. J. Penfield, who continued the business under the name of the “Bank of Kelley” until the year 1911, when he absconded, leaving the bank in an insolvent condition. Thereafter plaintiffs herein, for themselves and as trustees of numerous depositors in the bank, brought this action at law alleging that the defendant Henry Banks was a partner with Penfield in said business and therefore personally liable for the payment of their several claims. In another count of the petition, plaintiffs allege, in substance, that the appellant Banks knowingly allowed Penfield to hold him out to the world as a partner in the business and did not deny or repudiate such representations, thereby inducing plaintiffs and those whom they represent to become depositors in the bank relying upon appellant's credit and financial responsibility, and that by reason of such conduct he has estopped himself to deny liability in this action. The defendant denies the alleged partnership, and denies that he is in any manner chargeable with the debts of the bank, or that he has been guilty of any conduct which estops him from pleading and relying upon such defense to plaintiffs' claim. There was a trial to a jury and verdict returned for plaintiffs aggregating $22,132.81. From the judgment entered on said verdict the defendant Henry Banks appeals.

The record is very voluminous, rendering it entirely impracticable to set forth all the matters and things having legitimate bearing upon the merits of the litigation, and in discussing the facts we shall, to a great extent, speak of what the testimony fairly tends to show, without attempting to quote the language of witnesses except as it seems necessary to make the situation clear. It will be quite impossible to take up and discuss each separate point pressed upon our attention by counsel in argument, and we shall confine our discussion to such only as appear to us of controlling importance.

I. We give first consideration to the question whether there is any evidence to support a finding that defendant was in fact a partner in the Bank of Kelley.

[1] A careful search of the record fails to reveal even a scintilla of support for the claim that he ever at any time sustained such relation to Penfield or to the bank. On the contrary, the negative of that proposition seems to be established to a moral certainty. Counsel for appellees do not contend in argument that an actual partnership was proven, but rest their case upon the theory that the evidence justifies a finding of what they term an “ostensible partnership,” a subject which we shall consider in a later paragraph of this opinion. Indeed, they say the question of a partnership in fact is not before us, because the trial court withdrew that issue from the jury. If the showing made in the abstracts could be said to bear out this statement of counsel, further discussion at this point would of course be idle; but we do not so read the record. It there appears that before the case was submitted appellant's counsel requested an instruction withdrawing the issue of actual partnership from the jury, and such request was denied. It is true that the refusal was accompanied by a statement from the court that such direction was “substantially given in the court's instructions”; but a careful reading of the charge given the jury does not disclose an instruction of that character, or one which the jury would necessarily understand as its equivalent. In informing the jury concerning the issues submitted to them, the court stated the plaintiffs' allegations of both an actual partnership and so-called ostensible partnership, or partnership by estoppel, and that appellant had taken issue thereon by denial. In another instruction, both actual partnership and ostensible partnership were defined to the jury; but neither here nor elsewhere were the jury told that the evidence would not justify a finding of an actual partnership between appellant and Penfield. It is to be admitted that the charge of actual partnership was not otherwise specially featured or emphasized in the instructions, and the several paragraphs thereof were largely devoted to more or less minute directions as to the law governing “ostensible partnerships” or partnerships by estoppel--from all which a jury of lawyers might reasonably have inferred that in the mind of the court the plaintiffs' claim on the latter ground presented the dominant issue in the case. But we regard it quite clear that a jury of laymen might well understand that they were at liberty to consider and pass upon both issues. It is therefore our opinion that the defendant's request for the distinct withdrawal from the jury of the issue of actual partnership should have been sustained.

II. Claims of depositors upon nearly 70

different counts were submitted to the jury, on all of which there were verdicts against the appellant. In order to comprehend the force and effect of the trial court's rulings and instructions, it will be necessary to refer at some length, but briefly as practicable, to portions of the testimony introduced. It was shown that in August or September, 1907, a small circular or booklet was issued from the Bank of Kelley of which document the following was a copy:

“The Bank of Kelley, Kelley, Iowa; Established in 1901; Capital $10,000.00; Individual responsibility $75,000.00; E. J. Penfield, President; C. L. Siverly, Cashier. Henry Banks. F. W. Penfield. [Above is front page.]

[Second page] We invite your attention to the first sheet of this announcement showing an individual responsibility of $75,000 and giving the names of the owners and managers of this bank.

We are proud of this showing and desire to thank our many patrons for their loyalty in the past and hope we may be of still more service to you in the future.

The policy of the bank will continue the same, paying 4 per cent. interest on time deposits, clerking sales and discounting notes at current rates.

Again thanking you, we are,

Yours for business, The Bank of Kelley.”

Some of these booklets were distributed on the counters of the business houses of Kelley, others inclosed in passbooks of depositors, and still others passed out by Penfield to his customers. About the same time, if not before, a sign in large letters, reading, “Bank of Kelley. Individual Responsibility $75,000,” was placed upon the front window of the bank building; but no names were attached thereto. F. W. Penfield, whose name appears in the printed advertisement, was the father of E. J. Penfield, and the appellant, whose name appears in the same connection, was the father of E. J. Penfield's wife. Appellant was a farmer living 6 1/2 miles from Kelley and 4 1/2 miles from the city of Ames, which was his principal market town and the place where he did such banking business as he had occasion to transact. Kelley was a small village of comparatively few business places, and appellant's visits there were comparatively infrequent--going there occasionally to attend public sales and at times to call upon his daughter. When in the bank he was at times seen behind the counter, as was the custom of many other callers and visitors. No one ever knew him to transact business for or with the bank or saw him assume any authority therein. The nearest approach to any such testimony is the statement of one witness who says he once saw him looking into a book behind the counter, but he does not know or pretend to say what was the nature or character of the book to which he refers. Appellant testifies, and there is no evidence whatever to contradict him, that he never invested a dollar in the bank or in the business and never consented to or authorized the use of his name by Penfield in connection with the business; that he never loaned any money or credit to Penfield or to the bank, was never a borrower there, and never made a deposit therein. In these matters he is fully corroborated by the several cashiers and clerks serving the bank during the period under consideration. Very soon after the booklet was issued, a nephew of the appellant told him he had seen or heard of it, and on the following day appellant went to Kelley and went to the bank for the purpose of ascertaining the meaning of such use of his name. Penfield was out of town, but Siverly, the cashier, was present, and to him appellant broached the subject and protested against the unauthorized use of his name. The cashier promised that he would report the matter to Penfield on his return and have him rectify it. Later on the same day, appellant saw F. W. Penfield, whose name had been coupled with his own on the printed document, and was informed by him that he had consulted a lawyer on the subject and that appellant “need not bother about it; it is all right.” This visit to Kelley was on Friday, and on Sunday following E. J. Penfield came to the farm, and, being called to account by appellant for the unauthorized use of his name, he apologized, saying he did it because he thought it would make the bank look better, and promised that there would be no more of it, and that he would “straighten it right up.”

Appellant never saw the paper itself until after this suit was begun, and his only knowledge of its contents was such as he obtained from his nephew's report to him that his name was used therein as having some connection with the bank. The evidence strongly tends to show...