Commercial & Savings Bank v. Duitsman

• Decision Date: 02 October 1925
• Docket Number: 5500.
• Citation: 205 N.W. 379,48 S.D. 534
• Parties: COMMERCIAL & SAVINGS BANK v. DUITSMAN.
• Court: South Dakota Supreme Court

205 N.W. 379

48 S.D. 534

COMMERCIAL & SAVINGS BANK v. DUITSMAN.

No. 5500.

Supreme Court of South Dakota

Oct 2, 1925

Appeal from Circuit Court, Lincoln County; L. L. Fleeger, Judge.

Action by the Commercial & Savings Bank, a corporation, against Geelt Duitsman. From a judgment for plaintiff and an order denying a new trial, defendant appeals. Affirmed.

A. J Keith and M. G. Luddy, both of Sioux Falls, for appellant.

S. K Grigsby and Davis, Lyon & Bradford, all of Sioux Falls, for respondent.

SHERWOOD J.

This action was brought on two promissory notes, aggregating about $17,000, executed and delivered by defendant, appellant here to plaintiff, respondent here. The answer admits the execution and delivery of the notes, but denies they were given for a valuable consideration, and alleges that each of said notes was executed and delivered without any consideration, and at the request of plaintiff, solely as an accommodation note. At the close of the trial, a verdict was directed for plaintiff. Later a new trial was denied, and defendant has appealed from the judgment and order denying a new trial.

There were only three assignments of error. Appellant, summing up these assignments, states his entire contention as follows:

"The assignments of error show that there is only one point involved in this case, namely: Was there any evidence in the record sufficient to entitle the defendant to have the case go to the jury?"

This requires us to carefully examine the entire testimony. It is undisputed: That on September 27, 1919, one J. A. Johnson gave his unsecured promissory note to the Farmers' Savings Bank of Tea, hereinafter called Bank of Tea, for $45,901.44. This note was dated September 27, 1919, and due March 27, 1920. It is later herein referred to as Exhibit 1.

The Bank of Tea sold this note to respondent on October 7, 1919. It was entered on the deposit register of respondent bank on that date, and the Bank of Tea was on that day credited with the proceeds. The record entry on respondent's deposit register of that date, so far as it is important here, read as follows:

"Date of note, 9-27-19; No. 1970; drawer or maker, J. A. Johnson; drawee or indorsers, E. J. Hoyer, Henry Bruhn, G. Duitsman; when discounted, Oct. 7-1919; when due, 3-27-20; amount, $45,901.44; when paid, 5-13-1920."

That G. Duitsman, who signed as indorser is the same person as Geelt Duitsman, appellant here. That the Johnson note above described was reduced by some partial payments, and the balance due thereon up to March 27, 1920, was paid on May 13, 1920, by giving to respondent bank three notes of $13,884 each; one of said notes was signed by Geelt Duitsman, one by Henry Bruhn, and one by John Oppold. Each of these three notes was dated back to March 27, 1920, the date when the Johnson note became due, and the total of the three notes was about 57 cents more than the principal and interest due on the Johnson note at maturity. This 57 cents was paid by the respondent, so that the new notes could be made in even dollars. The Johnson note was then delivered to Hoyer, cashier of the Bank of Tea.

Johnson paid this note to the Bank of Tea, April 14, 1921. Appellant was a director and president of the Bank of Tea from 1912 to 1922, was present when the note was paid, and as a stockholder of the bank received his share of the benefit of such payment. Appellant's son was cashier of the Bank of Tea from March, 1921, and shortly after said date appellant took active charge of the bank, and has since been in active charge thereof. It should be observed that Wenzlaff and McEwen, former president and cashier of the bank when the Johnson note was bought, sold the respondent bank and William Hoese and Louis Jacobs became president and cashier, respectively, in November, 1919. This case was tried about December, 1922. When the Johnson note became due, respondent notified Johnson, the maker of the note, and the Bank of Tea, and insisted on the Johnson note being taken care of. Mr. Hoyer asked respondent whether he could substitute some other notes and later did pay and take up the Johnson note with the Duitsman, Oppold, and Bruhn notes, before described. It should further be observed that the names of the board of directors of the Bank of Tea appeared as indorsers on the Johnson note in the respondent bank. The Johnson note was in respondent's bank indorsed by Duitsman, Hoyer, and Bruhn when Hoese became president and Jacobs cashier in November, 1921.

There was some conflict in the testimony relative to whether the notes given by Duitsman and Bruhn for $13,884 each were signed at the bank, or were signed at the residence of Duitsman. But we deem this entirely immaterial, because the question here is not where the three notes were signed, but when Duitsman indorsed the Johnson note. It is undisputed that the three notes given by Duitsman, Oppold, and Bruhn, aggregated $41,652, and were given to take up and actually did take up the $41,652 Johnson note. It will be seen that the real question here is, Was Duitsman's name on the Johnson note as an indorser when it was discounted by respondent bank? Upon this question Hazel Roberts testified as follows:

"During September and October, 1919, I was teller and assistant cashier of Commercial & Savings Bank. I registered all notes received by the bank while I was there. The book you show me is the discount register of plaintiff bank. I kept it. This entry is in my handwriting. I made the entry from this note-the Johnson note. I used the note to make the entry. It correctly shows the signatures, indorsements, etc., on the note at the time it was received by me. From an examination of the register, I can tell that the entry was made October 7, 1919; that was the date this note was received by the bank. The indorsements, 'E. J. Hoyer,' 'Henry Bruhn,' and 'G, Duitsman,' were on this note when I received it and made the entries in the discount register. I would say it was all made at the same time; otherwise I would not have put those indorsers on there. This note was paid and taken out of the bank May 13, 1920."

On cross-examination:

"The fact this note was indorsed without recourse I did not note at all upon the register. I might have overlooked it. I cannot tell at this time why it was left off. I was instructed to put all indorsements that showed on the note. I have no personal recollection of this transaction, except as I am able to show it from the books."

Recross:

"My testimony is that the entry was all made at the date shown.

Q. If, two weeks after this you received the note, and that time there were indorsements on it, would you go back and fill in the blank space? A. If I had received it a second time.

Q. And you have no personal recollection, have you, that you did not receive it a second time? A. That didn't go through my hands a

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