Central Bank of Bingham v. Stephens

• Decision Date: 23 June 1921
• Docket Number: 3637
• Citation: 199 P. 1018,58 Utah 358
• Court: Utah Supreme Court
• Parties: CENTRAL BANK OF BINGHAM v. STEPHENS

199 P. 1018

58 Utah 358

CENTRAL BANK OF BINGHAM v. STEPHENS

No. 3637

Supreme Court of Utah

June 23, 1921

Appeal from District Court, Third District, Salt Lake County; Jno F Tobin, Judge.

Action by the Central Bank of Bingham against T. B. Stephens. From judgment for defendant, plaintiff appeals.

AFFIRMED.

H. Van Dam, Jr., and Noel S. Pratt, both of Salt Lake City, for appellant.

Straup Nibley & Leatherwood, of Salt Lake City, for respondent.

FRICK J. CORFMAN, C. J., and WEBER, GIDEON and THURMAN, JJ., concur.

OPINION

FRICK, J.

The plaintiff, hereinafter called appellant, brought this action in the district court of Salt Lake county to recover upon a promissory note. The note was dated December 7, 1917, and was payable on demand. This action was commenced on July 15, 1919. The note was made payable to the Citizens' State Bank, or order, which bank went into the hands of a receiver, and by the direction of the district court aforesaid the note was assigned to the appellant who succeeded to the banking business and the assets of said Citizens' State Bank. The note is in the usual form of a demand note, and the complaint contains the usual allegations in such cases.

The defendant admitted "that he signed the note," but averred:

"That the same was given to the Citizens' State Bank of Bingham, the payee named therein, as a mere matter of form, and without any consideration of any nature whatsoever."

The defendant, after denying the other allegations of the complaint, as affirmative defenses averred that the note was delivered upon condition; that it was signed without consideration; that it was used and diverted contrary to the agreement upon which it was signed and made, and that appellant was not a holder in due course, the particulars of each defense being fully stated. We shall state only so much of the evidence as may be necessary to a full understanding of the questions presented for decision.

At the trial the defendant admitted that the note had not been paid. Mr. Kelly, the cashier of the Citizens' State Bank, was called as a witness on behalf of appellant, and testified that the defendant signed the note; that after the note was signed "it was put in the account of loans and discounts, and credited to my personal account." On cross-examination the witness further testified that at the time the note was given he was the cashier of the Citizens' State Bank; that as such he had "entire control of the bank," and that no other official was over him; that he wrote the note upon his own initiative. The witness, over appellant's objection that it was not proper cross-examination, further testified that when the defendant came into the bank on the day the note bears date, "I said to Mr. Stephens, 'Tom, I want your note for two or three weeks,' and he said 'All right.'" The witness further said that he told the defendant at the time that he would "return him his note in about 10 days." The witness also said that when he asked the defendant to sign the note he hesitated to do so. The witness was then asked the following questions and replied as indicated:

"Q. Didn't you then, when he hesitated, when Mr. Stephens hesitated, didn't you then say 'Tom, this is a matter of form; I'll hold this for 8 or 10 days and hand it back to you?' Didn't you in substance say that to him? A. Yes; very possibly.

"Q. And didn't you say 'Tom, this note is not going to be used for any purpose; I just want it for a few days, and I'll hand it back to you?' A. I may have said something similar to that."

There is much more testimony of similar import which it is not necessary to state here. The defendant was called as a witness in his own behalf. He testified that prior to the transaction of making the note he and Kelly were very close friends; that they were members of the same lodge; that they acted together on the committee to raise funds for the purchase of Liberty Bonds, etc. The witness further said:

"Mr. Kelly was mayor [of Bingham], president of the Commercial Club, and in fact he was the head man of the town; practically he was into everything in public affairs, a great man in public affairs; public spirited fellow."

The defendant further testified that, while he and Kelly were quite intimate, and had acted together in town and other affairs, yet that he never had had any personal business transactions with him; that he was a depositor in the bank of which Kelly was cashier; that on the day in question he went to the bank to make a deposit; that he had not spoken to Kelly, nor the latter to the witness, with regard to the note in question before Kelly asked him to sign it; that after making the deposit he started to leave the bank when Mr. Kelly called him back. The defendant then, in referring to the note in question, and to what was said between him and Kelly, said: "Mr. Kelly called me back there and showed me this [referring to the note], which was already made out, and he asked me to sign it. * * * He said "This won't be considered an obligation against you.' He says 'It won't be negotiated; it won't leave the bank, and it won't be used by either me or the bank and will be handed back to you in a few days, not to exceed 10 days.'"

The witness also said that he hesitated to sign the note and did so after--

"Mr. Kelly gave me strictly to understand that the note would not be used by anybody, by the bank or by him, or never negotiated."

The defendant further said that Mr. Kelly had never said anything to him that he wanted him to sign the note to "enable him to raise money"; that the defendant never obtained any money or thing of value for signing the note; that he was not obligated to the bank; that no demand was ever made upon him by Kelly or the bank to pay the note, and that he never paid anything upon it, etc. There was also evidence from other sources that prior to the time that the bank went into the hands of a receiver Mr. Kelly in fact conducted the bank's entire business in his own way, and without being directed or controlled by any other officer, or by the board of directors of the bank, in any way. It was also conceded in the court below, and is conceded here, that all of the defenses are open to the defendant in this action that would have been open to him if the original payee of the note had sued upon it. There was also some evidence with respect to whether the bank parted with anything of value to Kelly. As to that the appellant contends that the evidence showed that Kelly had received credit on his personal account for the note, and hence the defense of want of consideration failed, while the defendant insists that at most the evidence and the inferences that may be deduced therefrom were such that it was a question for the jury, and, in view that it found the issues in favor of the defendant, that question is settled in his favor. We shall refer to this question hereinafter.

The court submitted the case to the jury upon the issues presented by the pleadings and the evidence produced by the respective parties. The jury returned a verdict in favor of the defendant, upon which judgment was duly entered, to reverse which this appeal is prosecuted.

Numerous errors are assigned. Counsel for appellant, in their brief, however, have condensed the assignments to a few propositions which we shall now proceed to consider.

The first proposition discussed by counsel arose as follows: The appellant called Mr. Kelly as a witness, and, after he testified that he saw the defendant sign the note in question, he also testified that he had placed the note in the bank's account of loans and discounts, and that it was credited to his personal account. Defendant's counsel then took the witness, and, over the objections of appellant that it was not proper cross-examination, was permitted to examine him with respect to the whole transaction in signing the note, and what was said between the witness and defendant on that occasion. It is now urgently insisted that the district court erred in permitting the cross-examination. It is insisted that the cross-examination of the witness transcended the bounds of legitimate cross-examination.

In the case of Anderson v. Railway, 35 Utah 509, 101 P. 579, this court undertook to state the limits of legitimate cross-examination so far as that may be done in a general statement. In referring to the general rule governing cross-examination, it is there said:

"This general rule is to the effect that the cross-examination should relate to the matters stated by the witness on direct examination, and to the facts and circumstances connected with or related to the matters stated by him. In other words, all matters that may modify, explain, contradict, rebut, or make clearer the facts testified to in chief by the witness may be gone into on cross-examination. Ordinarily, when this field has been covered by the cross-examiner, the right, as an abstract right, to further cross-examination ceases. Beyond this the matter of cross-examination necessarily, to a very large extent, at least, must be left to the sound discretion of the trial court."

The rule as laid down in that case is quoted with approval in 5 Jones, Comm. Ev. § 521. While it is true that the rule in the English courts is less restricted than in this country, and that some American courts follow the English rule, yet, in our judgment, the great weight of American authority sustains the rule laid down in Anderson v. Railway, supra, and such is the view of the author of Jones, Comm. Ev. 5 Jones, Comm. Ev. §§ 520, 521, where a great number of cases are collated.

The appellant contends, however, that practically all that was elicited from the witness Kelly was that the defendant signed the note, and hence,...