Farmers State Bank of Conception Junction, Mo. v. Long

• Decision Date: 18 December 1917
• Docket Number: 31748
• Citation: 165 N.W. 404,182 Iowa 94
• Parties: FARMERS STATE BANK, Appellant, v. ORA LONG et al., Appellees
• Court: Iowa Supreme Court

165 N.W. 404

182 Iowa 94

FARMERS STATE BANK, Appellant, v. ORA LONG et al., Appellees

No. 31748

Supreme Court of Iowa, Des Moines

December 18, 1917

Appeal from Mills District Court.--J. B. ROCKAFELLOW, Judge.

ACTION for balance alleged to be owing on a promissory note. Pleas of payment and estoppel were interposed, and the cause transferred to the equity side of the calendar. On hearing the petition was dismissed. The plaintiff appeals.

Reversed.

Cook Cook & Cook, for appellant.

H. M Logan and W. S. Lewis, for appellees.

LADD, J. GAYNOR, C. J., EVANS and SALINGER, JJ., concur.

OPINION

LADD, J.

I.

The defendants executed their promissory note of $ 800 to the Citizens Bank of Strahan, on February 11, 1914, payable January 1st following. On January 9, 1915, $ 613.50 was paid thereon, and $ 91.94, March 25th following. These payments satisfied the debt evidenced by the note, if a payment of $ 150 on September 25, 1914, to the payee should be applied thereon, or may not be asserted by plaintiff. It appears that E. H. Ralston was doing business in the name of the Citizens Bank of Strahan as a private bank, and that, on the 3d day of April, 1914, he sold the note to the plaintiff, and was credited by it on account the face value of the note, and such amount was checked out subsequently. When defendant Ora Long paid the $ 150 to Ralston, the letter remarked, "I will just give you a slip showing this is to be credited on your note," and handed Long the following receipt:

"Deposited with the Citizens Bank of Strahan, Iowa, by Ora Long, currency $ 150 to credit on note of $ 900. E. H. Ralston, Pr."

The description of the note as of "$ 900" doubtless was a mistake, as the $ 800 note was the only one, other than a note of $ 25 of his, then held by the bank. Instead of remitting to plaintiff, Ralston entered the $ 150 in the bank's books as a deposit by Long as of September 29, 1914. As the note was negotiable, and acquired for value long before maturity, a subsequent payment thereon must have been made to plaintiff or someone authorized by it, or, if received without such authority, this act must have been ratified. No evidence of ratification was adduced, nor of authority on the part of Ralston to receive, save that "when he would write for a note and state the maker wanted to pay it," the plaintiff "would charge his account with it and send it to him and "received payment on it." This was in accordance with plaintiff's custom, and, of course, merely conferred special authority as to the particular note forwarded, and did not authorize him to receive moneys for the plaintiff generally, or on notes other than the particular notes forwarded. Plaintiff knew nothing of the alleged payment until November following, when informed by the receiver, who had been appointed in October previous, to wind up the affairs of the Citizens Bank of Strahan; and, as Ralston acted without its authority, the plea of payment is without support in the evidence.

II. Before migrating, Ralston transferred his bank building and other property to the plaintiff, but, upon the return of an indictment accusing him of having knowingly received deposits when insolvent, returned, as we understand it, voluntarily; and an amicable adjustment of his affairs was made, in pursuance of the following stipulation:

"We, the undersigned, being creditors of the Citizens Bank of Strahan, Iowa, do hereby agree with and authorize C. B. Christy, the receiver of said bank, to make the following settlements with E. H. Ralston: That whereas it has been offered to the said receiver that the said Ralston will compromise and settle in full the claim of the Farmers State Bank of Conception...