Astoria State Bank v. Markwood
Decision Date | 04 March 1916 |
Docket Number | 3799 |
Citation | 37 S.D. 56,156 N.W. 583 |
Parties | ASTORIA STATE BANK, Plaintiff and Appellant, v. C. T. MARKWOOD, G. W. Erickson, and Thomas Erickson, Defendants and Respondents. |
Court | South Dakota Supreme Court |
Appeal from Circuit Court, Beadle County, SD
#3799--Affirmed
Crawford & Warren
Attorneys for Appellant.
C. A. Kelley, James Burnes
Attorneys for Respondents.
Opinion filed March 4, 1916; Rehearing granted April 11, 1916
On February 2, 1910, defendants executed and delivered to one Windherst a series of six promissory notes for $1,000 each, as part payment for a stock of merchandise sold and delivered to defendants by Windherst. One of said notes payable on or before March 2,1910; two on or before February 1, 1911; two on or before February 2, 1911; and one on or before or before 2, 1912. One of the notes due on or before February 1, 1911, had indorsed thereon a payment of $200 at the time of its delivery. All these notes were made payable at the James Valley Bank at Huron. Windherst indorsed and delivered to plaintiff, prior to maturity, in good faith, for the consideration of $3,800, four of said notes, namely, the two maturing on or before February 1, 191 1, one maturing on or before February 2, 1911, and the one maturing on or before February 2, 1912. Plaintiff instituted this suit to recover on the note maturing February 2, 1912. alleging nonpayment thereof. Defendants admitted the execution and delivery of the note, and pleaded as an affirmative partial defense a payment thereon of $511.06. On the trial it appeared, without dispute, that defendants on September 18, 1913, paid on said note to Windherst the sum of $511.06. There was evidence tending to show that Windherst never paid this $511.06 to plaintiff. There was no evidence tending to show that Windherst had actual possession of said note at the time of said payment. At the close of the evidence plaintiff moved for a directed verdict on the grounds: (1) That the undisputed evidence shows that the said payment was made to a person not in possession of the note, and after defendants had knowledge that the note had been sold and delivered to plaintiff; (2) that there is no evidence to show the relation of principal and agent between plaintiff and Windherst; (3) that the note, being negotiable, could be discharged only by payment to the owner or person in possession thereof. The motion to direct a verdict was denied, and the issue as to such payment was submitted to the jury, and a verdict returned in favor of defendants. The appellant assigns as error the overruling of such motion.
There can be no question but what the rule of law is that a negotiable note must be paid to the legal owner and holder at the time of such payment, and that a payment to any other person not in possession of the note will not bind the legal owner and holder, unless the legal owner has either expressly or by implication authorized such other person to receive such payment for him. The person alleging such payment has the burden of showing that the payment was made to a person authorized to receive the same. Actual authority of a person not the owner or possessor of a note to receive payment need not be established by direct testimony, but may be established by circumstances.
Reid v. Kellogg, 8 S.D. 596, 67 N.W. 687; McVay v. Bridgman, 21 S.D. 374, 112 N.W. 1138; Campbell v. Gowans, 35 Utah, 268, 100 Pac. 397, 23. L.R.A. (N. S.) 414, and exhaustive note, 19 Ann. Cas. 660; Bautz v. Adams, 131 Wis. 152, H1 N.W. 69, 120 Am. St. Rep. 1030; Doe v. Callow, 64 Kan. 886; 67 Pac. 824; Hoffmaster v. Black, 78 Ohio St. 1, 84 N.E. 423, 21 L.R.A. (N. S.) 52, 125 Am. St. Rep. 679, 14 Ann. Cas. 877; Doyle v. Corey, 170 Mass. 337, 49 N.E. 651. In this case, as we view the effect of the evidence, the defendants fully met the burden of proof by showing facts and circumstances warranting the trial court in denying plaintiff's motion to direct a verdict.
The four notes assigned to plaintiff were executed and delivered at Huron, where defendants and Windherst then resided. Shortly after the making of said notes Windherst became a resident of Sherman, this state. The plaintiff bank was at all times located in the state of Illinois. The note sued upon in this action was the last to become due of those assigned to plaintiff. The first to be paid of the notes assigned to plaintiff was, the one due February 1, 1911, on which $200 had been indorsed. On January 30, 1911, defendants paid to Windherst $952, of which $800 was to satisfy the principal unpaid on this note, and, $152 was to apply on the interest of the other three notes held by plaintiff. Windherst sent this payment to plaintiff, and plaintiff applied, $800 thereof on the principal of said note, and the remainder on the interest of the other notes on February 7, 1911, and on that date returned the canceled note to Windherst at Sherman, and thereafter Windherst sent the canceled note by mail to defendants. The ether note due February 1, 1911, and the one due February 2, 1911, assigned to plaintiff, were not paid when due, but were paid by defendants by a check for $2,120 mailed to Windherst at Sherman on February 28, 1912. The plaintiff actually received the payment at its bank in Illinois on March 6, 1912, while on March 4th Windherst sent the canceled notes to defendants from Sherman by mail. Stamped across the face of each of these notes appears: "Paid Mar. 1, 1912, Sherman State Bank, Sherman, S. D." One of the defendants who had charge of the payment of said notes in substance testified that:
"In making these remittances to Windherst, I suppose we were making them to the owner of the notes, and did not know anything about the bank's ownership until we received that letter in March after Windherst's death."
The letter here referred to bears date "March 2, 1914." The witness, continuing, further testified:
An officer of plaintiff bank, among other things, in substance testified, when explaining why Windherst had been permitted to collect and send the payments to plaintiff, that most of these payments were sent to plaintiff by Windherst before maturity, and that plaintiff could not say anything about it until it was due. Other written testimony of plaintiff conclusively shows that all the prior payments of principal on all prior notes were made after due; the most of them more than a year after due. This witness for plaintiff further testified that the letters asking for an extension of time came through Windherst to plaintiff; and this witness further testified that the two notes paid by the $2,120 payment might have been sent to the Sherman State Bank for collection, but that they were not sent to the James Valley Bank of Huron, where they were payable, and in which city defendants resided. The letter of March 2, 1914, written to defendants by plaintiff after the death of Windherst, referred to in defendants' testimony, is as follows:
This testimony shows that plaintiff, without objection, permitted Windherst, the original payee, to collect and receive both principal and interest on all the prior due notes of the series held by plaintiff. The fact that plaintiff wrote defendants making inquiry as to whether defendants had made payments to Windherst, and defendants answered back that they had, and plaintiff made no reply or objection thereto, was something clearly tending to mislead defendants into the belief that payments so made were all right. When defendants so answered this inquiry, it was plaintiff's plain duty, if Windherst was not authorized by plaintiff to receive such payments, to have immediately notified defendants. Plaintiff could not remain silent under those circumstances and not thereafter be bound by the acts of Windherst in receiving payments of principal and interest on any of said notes. The fact that, when defendants desired an extension of time for payment on the notes held by plaintiff, they applied to Windherst, and were granted such extension by and through him, was sufficient to warrant defendants in the belief that Windherst was the owner of said notes or acting as the agent of the person who held them as collateral. Plaintiff authorized such extension of time through Windherst. The clause, "Since Mr. Windherst's death I suppose we will have to deal directly with each other," contained in the letter from plaintiff to defendants, although written after the payment in question, clearly shows the situation of affairs existing prior to Windherst's death. This letter clearly indicates that plaintiff had been...
To continue reading
Request your trial-
Farmers' Live Stock Loan Co., v. Anderson
...as are the minority of this court, that the facts of this case are such as to bring it under the control of the decision in Astoria Bk. v. Markwood, 161 N.W. 815. It is the contention of appellant that the evidence discloses that Dirks was the agent of respondent and as such negotiated loan......
-
Farmers' Live Stock Loan Co. v. Anderson
...the minority of this court, that the facts of this case are such as to bring it under the control of the decision in Astoria Bk. v. Markwood, 38 S. D. 437, 161 N. W. 815. It is the contention of appellant that the evidence discloses that Dirks was the agent of respondent and as such negotia......