Bank of New London v. Ketcham

• Decision Date: 22 September 1885
• Citation: 64 Wis. 7,24 N.W. 468
• Parties: BANK OF NEW LONDON v. KETCHAM AND ANOTHER.
• Court: Wisconsin Supreme Court

64 Wis. 7

24 N.W. 468

BANK OF NEW LONDON

v.KETCHAM AND ANOTHER.

Supreme Court of Wisconsin.

Filed September 22, 1885.

Appeal from circuit court, Outagamie county.

The action is upon a promissory note, dated February 2, 1883, made by the defendant Ketcham, indorsed by the defendant Hoxie, and held and owned by the plaintiff bank. The liability of the defendants to the bank on this note is not denied.

The defendants, in their answer, set up a counter-claim for moneys paid at various times by Ketcham (who is the principal debtor on the note in suit) to one C. P. Skinner, and allege that such payments, which exceed the amount of the plaintiff's demand, were made for the plaintiff on demands which the latter had assumed and agreed to pay. Whether such payments were or were not so made for the bank, was the only question litigated on the trial. The jury found they were not, and returned a verdict for the plaintiff for the full amount of the note in suit. The court denied a motion for a new trial, and gave judgment for the plaintiff pursuant to the verdict. The defendants appeal from the judgment. The case is stated in the opinion.Gabe Bouck, for respondent, Bank of New London.

G. W. Cate, M. B. Patchin, and E. P. Smith, for appellants, Henry Ketcham and another.

LYON, J.

The jury found, in effect, that the moneys mentioned in the counter-claim, which were paid by Ketcham to Skinner, were not so paid for the plaintiff bank, and hence such payments were no grounds for a counter-claim against it. This is the necessary significance of the verdict. The only question upon the evidence is, therefore, does the testimony sustain the verdict in this behalf?

In the summer and fall of 1876 a private banking business was carried on at New London, ostensibly by L. C. Patterson & Co., under the style of “The Bank of New London.” The testimony tends to prove that L. C. Patterson alone carried on the business; also that he carried on other business, or “transactions,”as a witness calls them, entirely separate from his banking business. About September 1, 1876, Patterson and some 20 other persons duly recorded a certificate for the incorporation, under state laws, of the “Bank of New London,” the plaintiff, in which Patterson is named as president, and one Bingham as vice-president. Also nine directors were named, among whom were the defendant, and Messrs. Bingham, Dixon, Sterling, and Logan, hereinafter mentioned. Down to November 25, 1876, the board of directors did nothing except to adopt by-laws, and the corporation transacted no business, and had no assets whatever. November 13, 1876, Patterson executed six notes of $1,000 each to the order of J. W. Bingham, payable at a bank in Chicago, and Bingham, Logan, Dixon, and Sterling, above named, and the defendant, indorsed them to C. P. Skinner, cashier, or order, for the accommodation of Patterson. The First National Bank of Westfield, New York, of which Skinner was cashier, received these notes, and before November 25th advanced to Patterson $3,500 thereon. [For convenience we will hereinafter refer to these notes as held by Skinner.]

On the evening of Saturday, November 25, 1876, Skinner, and the five indorsers above named, met in the banking-house of Patterson & Co. (or Patterson) and discussed the affairs of Patterson, who was insolvent. At that interview schedules of the assets of the private bank of Patterson, consisting entirely of its bills receivable, or discounts, and a small sum of money, and of its liabilities, consisting entirely of sums due depositors, were furnished by Mr. Perrin, the clerk in such private bank. In these schedules the liabilities exceeded the assets $4,445. Skinner informed the other persons present that he had advanced $3,500 to Patterson on the notes of November 13th, indorsed by them. He also insisted that certain notes of Patterson to Brown & Briggs for $2,200 should be paid out of the proceeds of the notes for $6,000, for the reason that Patterson was criminally liable upon such indebtedness. He proposed that the plaintiff bank purchase the assets of the old banking-house, pay its liabilities, and commence and continue its business, and offered to loan the plaintiff a certain sum of money to enable it to do so. This proposition seems to have been accepted and agreed to by the five indorsers, who, although constituting a...