Bartels v. Suter
| Decision Date | 06 March 1928 |
| Docket Number | 17808. |
| Citation | 266 P. 753,130 Okla. 7,1928 OK 151 |
| Parties | BARTELS v. SUTER. |
| Court | Oklahoma Supreme Court |
Syllabus by the Court.
In the absence of special findings contrary to the general verdict a trial court is without authority to render judgment notwithstanding the verdict, unless the same is warranted by the pleadings.
Where a party executes to a bank his promissory note, due in 6 months, without consideration, solely as an accommodation to the payee bank, and 6 days after maturity of the note, while the same is then held by payee bank, requests surrender and return of the note and is advised by the cashier that he was busy just then and that the note would be delivered the next time party was in, and shortly thereafter such note is sold transferred, and indorsed without recourse by the bank, and later suit is filed by transferee against the maker to recover thereon, held, that, in view of the provisions of the Negotiable Instruments Act (sections 7728 and 7698, C. O. S. 1921), which make no exception in favor of accommodation paper (section 7699, C. O. S. 1921) the defense of want of consideration was available to the maker of such accommodation note as against the holder thereof for value who acquired the same after maturity.
Record examined, and held insufficient to sustain judgment of the trial court.
Commissioners' Opinion.
Appeal from District Court, Texas County; Arthur G. Sutton, Judge.
Action by A. H. Suter against Henry Bartels on two notes. Judgment for plaintiff, and defendant appeals. Reversed and remanded with directions.
Rizley & Loofbourrow, of Guymon, and Wade H. Loofbourrow, of Buffalo, for defendant in error.
This action was instituted in the district court of Texas county by A. H. Suter, defendant in error here, as plaintiff against Henry Bartels, plaintiff in error here, to recover judgment on two promissory notes executed by the defendant, Bartels, in favor of the Texas County National Bank.
One note was for the sum of $3,000, dated April 2, 1923, due 6 months thereafter, and the other was for $375, dated July 25, 1923, due in 90 days.
The notes sued upon were transferred, after maturity, and without recourse, by the payee bank to E. T. Guymon, and thereafter transferred, without recourse, to the plaintiff. The defendant, Bartels, pleaded that the $3,000 note was executed for the accommodation of the payee bank, that he received no consideration for the same, and that the $375 note was executed upon certain conditions respecting a sale of land wherein the bank was to have deducted the amount of the note from certain moneys held by the bank, which it failed to do; that by reason of such failure he was released from liability; that both notes were transferred after maturity. The plaintiff, Suter, in reply alleged that the $3,000 note was executed to the payee bank as a renewal of a former note for the same amount, which former note was executed to take up the certain note of a third party and to enable the Texas County Bank to nationalize, and, as to the $375 note, denied that the same was executed under the conditions alleged, and that the defendant, maker of such note, by paying certain of the moneys direct, waived the alleged conditions, if any.
Upon a trial of the cause, the court advised and instructed the jury as to the theory and contention of each party as to the purpose and conditions under which the notes were executed.
Certain interrogatories were propounded to the jury embodying the question of whether the consideration for the $3,000 note was the taking up of the Costner note; and did the defendant execute the $3,000 note so that the same could be used for the purpose of deception in the nationalizing of the Texas County National Bank? both of which interrogatories were answered in the negative.
A general verdict was rendered in favor of the defendant. Motion for judgment notwithstanding the verdict was filed by the plaintiff, as to plaintiff's first cause of action which involved the $3,000 note. The trial court, notwithstanding the verdict, rendered judgment in favor of the plaintiff on the $3,000 note upon the theory that it was an accommodation note in the hands of the plaintiff who paid value therefor, and on the $375 note upon the theory that defendant wholly failed to establish his alleged defense. Defendant filed his motion for a new trial, which was overruled, and he brings the cause here for review.
Six assignments of error are set forth in the petition in error which are disposed of, under argument, in the following order: First, "Error of trial court in sustaining plaintiff's motion for judgment notwithstanding the verdict."
Under this head it is urged by plaintiff in error that the trial court had no authority to render judgment because such action was not in accord with the provisions of section 682, C. O. S. 1921, and was in conflict with the holding of this court in the case of Barnes v. Universal Tire Protector Co., 63 Okl. 292, 165 P. 176, and similar cases, holding in effect that, where there is no conflict between the special findings of the jury and its verdict, the court is without authority to render judgment notwithstanding the verdict, unless it appear from the statements in the pleadings that the movant is entitled to the judgment asked for; and it is urged that as to the action on the $3,000 note the pleadings raised an issue of fact as to whether plaintiff was the owner of the note and whether he paid value for it.
Plaintiff alleged he was the owner and holder for value, before maturity; the indorsement on the note was in blank and the verified answer of the defendant contained a general denial, and further specifically denied the plaintiff to be a holder for value before maturity. This court, in the case of Southwest General Electric Co. v. Riddle, 66 Okl. 202, 168 P. 436, said:
"In an action on a promissory note by one other than the payee, where nothing appears, by indorsement or otherwise, indicative of the ownership of such note, an allegation that plaintiff is the owner and holder may be put in issue by an unverified answer."
See, also, Shipman v. Porter, 48 Okl. 284, 149 P. 902; First Nat. Bank v. Vaughn, 96 Kan. 402, 151 P. 1118.
In view of the pleadings in the instant case, an issue was raised which would preclude, under the usual holding, judgment notwithstanding the verdict.
Defendant in error says he moved for judgment on the opening statement of defendant and for an instructed verdict, that since he was entitled, in any event, to recover, the irregularity would be harmless error, and, under the provisions of section 2822, C. O. S. 1921, the judgment should not be set aside. A similar contention was made in the case of McAlester v. Bank of McAlester, 95 Okl. 193, 218 P. 839, wherein the court said:
See, also, Odom v. Cedar Rapids Sav. Bank, 114 Okl. 126, 244 P. 758; Barnes v. Universal Tire Protector, Co. supra; Hanna v. Gregg, 92 Okl. 34, 217 P. 434.
Since we do not agree with the trial judge in his view of the law relating to an accommodation note, for that reason the rule of harmless error cannot be applied in this cause, and we find the court was without authority to enter judgment in favor of plaintiff on his first cause of action.
As to the second cause of action involving the $375 note, it appears to be admitted by defendant in error that the trial court was without authority to render judgment in favor of plaintiff, it being stated in the brief of the defendant in error as follows:
Were we to reverse this cause upon the grounds so far discussed it would leave undecided the more important question involved in the first cause of action, which is set forth in plaintiff in error's brief, under the second argument, as follows:
"Assuming that the plaintiff was the owner of the $3,000 note, and that he paid value for it, that it was an accommodation note and was not transferred by the payee until after maturity, was the defense that it was an accommodation paper good as against plaintiff?"
It was determined by the jury, under its special findings and verdict, that the $3,000 note sued upon was an accommodation note given for the accommodation of the payee bank.
It appears from the record that the bank was the owner of, and in possession of, the note at maturity, and thereafter sold and transferred the same without recourse.
Six days after maturity of the note the maker, defendant, called at the bank and requested the cashier to surrender him the note in accordance with their agreement, and the cashier stated he was busy just then and told him when he was in again he would get it for him. The defendant testified he was not in town again until about 30 days thereafter, during which time the payee bank had failed, and the bank record disclosed that the note in question, with others, was sold and transferred about 10 days prior to the closing of the bank.
The trial judge, as stated in his judgment, changed his opinion of the law after the trial of the case, and, when he entered judgment in favor of the plaintiff, was of the opinion...
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