Coons v. Herrick

• Decision Date: 08 November 1929
• Docket Number: 6582
• Citation: 56 S.D. 51,227 N.W. 460
• Parties: O.J. COONS, Appellant, v. L. A. HERRICK, Respondent.
• Court: South Dakota Supreme Court

56 S.D. 51

227 N.W. 460

O.J. COONS, Appellant,

v.

L. A. HERRICK, Respondent. South Dakota Supreme Court Appeal from Circuit Court, Grant County, SD Hon. J. J. Batterton, Judge #6582—Reversed Campbell & Fletcher, Aberdeen, SD Attorneys for Appellant. Hepperle & Fuller, Aberdeen, SD R. D. Jones, Milbank, SD Attorneys for Respondent. Opinion Filed Nov 8, 1929

BROWN, J.

Plaintiff sold a piece of real estate to Elizabeth Hinckley, and she gave a mortgage thereon to the defendant for $4,000 and directed defendant to pay that amount to plaintiff on the purchase price. Defendant thereupon, on October 6, 1925, gave to plaintiff his check for $1,000 (which was paid) and a certificate of deposit on the Bank of Commerce of Milbank, S. D., reading as follows:

“Bank of Commerce

“No. 4389

“$3,000.00 Milbank, So. Dak., Sept. 8, 1925.

“L. A. Herrick ... has deposited in this Bank Three Thousand Dollars ... Dollars payable to the order of himself or Mrs. E. A. Herrick or survivor of either in current funds on the return of this Certificate properly indorsed, 6 or 12 months after date with interest at five per cent. per annum.

“Wm. Oosterhuis, Asst. Cashier.

“No interest after Maturity.

“Not subject to check.”

At the time of delivering the certificate to plaintiff, defendant indorsed it in blank.

The Bank of Commerce suspended and was taken over by the superintendent of banks for purposes of liquidation on November 18, 1925, and plaintiff did not present the certificate for payment until March 8, 1925, six months after its date, when, of course, payment was refused. The next day plaintiff presented the certificate of deposit to defendant as indorser and demanded payment from him, which was refused. Thereafter plaintiff commenced this action wherein, on trial to the court without a jury, judgment was given for defendant that the action be dismissed on the merits, and from the judgment and an order denying a new trial plaintiff appeals.

It is the contention of defendant that the certificate of deposit was given and was accepted by defendant as so much cash, that plaintiff agreed to at once present the certificate for payment and had it been so presented payment would have been made, and that the indorsement by defendant was simply for the purpose of transferring the title so as to enable plaintiff to at once cash the certificate, and was not intended as an indorsement in ordinary negotiation of the instrument. Plaintiff objected to the oral testimony as to the purpose of the indorsement on the ground that it contradicted the terms and legal effect of the indorsement, but the objection was overruled, and the court found the facts as testified to by defendant, and that the indorsement was for the purpose of transfer only, and concluded as a matter of law that plaintiff’s failure to forthwith present the certificate and demand payment thereof was the cause of the loss sustained through the failure of the bank, and that defendant was entitled to judgment dismissing the action.

Defendant testified that in the course of the transaction he offered to go to the bank and cash the certificate and give plaintiff the cash, and plaintiff replied that he need not go to that trouble, plaintiff would take the certificate; that defendant thereupon said to plaintiff, “You will see that this certificate of deposit is cashed as soon as these papers are completed?” and plaintiff rep...