First Nat. Bank in Evanston v. Sims

• Decision Date: 02 October 1956
• Docket Number: No. 8435,8435
• Parties: FIRST NATIONAL BANK IN EVANSTON, a National Corporation, Plaintiff-Appellant, v. Kenneth J. SIMS, Defendant-Respondent.
• Court: Idaho Supreme Court

Page 1103

301 P.2d 1103

78 Idaho 286

FIRST NATIONAL BANK IN EVANSTON, a National Corporation, Plaintiff-Appellant, v. Kenneth J. SIMS, Defendant-Respondent.

No. 8435.

Supreme Court of Idaho.

Oct. 2, 1956.

Joseph McFadden, Hailey, for appellant.

C. V. Boyatt, Arco, for respondent.

SMITH, Justice.

August 25, 1954, appellant brought this action against respondent to recover a judgment of $3,100.88 principal, together with interest, allegedly owing and due on a promissory note.

Respondent by answer, while admitting the execution of the note, denied that he owed any sum thereunder and set up the defense of novation; also counterclaimed in offset of any alleged balance by him owed on the note.

The case was tried to a jury. Appellant's motion for a directed verdict was denied. Verdict was returned in favor of respondent and judgment entered accordingly.

Appellant thereupon moved for judgment notwithstanding the verdict and for a new trial, both of which motions the trial court denied. Appellant has perfected an appeal from the order denying its motion for a new trial.

The promissory note in the principal sum of $4,000 was dated January 2, 1953, although it appears to have been executed sometime during the first week in March, 1953.

Prior to the time of execution of said note respondent and his brother M. A. Sims operated as a co-partnership Sims Motor Company in Evanston, Wyoming. The brothers dissolved the partnership during December, 1952. Respondent thereupon operated Sims Motor Company as a sole propietor and, needing money to operate the business, borrowed $4,000 from appellant bank January 2, 1953, and executed and delivered his promissory note to appellant, evidencing the loan.

Respondent continued to operate Sims Motor Company as sole proprietor until March, 1953, whem he sold the business to his brother M. A. Sims and to Andrew B. O'Hars, as co-partners. Respondent, at that time by written instrument, assigned all credits and accounts receivable owing to the business, and all of its assets, to the new partnership; also at said time he went to appellant bank and as maker executed a new $4,000 promissory note payable on demand, with M. A. Sims and Andrew B. O'Hara as indorsers. The note provided for interest at the rate of 5 1/2% per annum until maturity, and 10% thereafter under Wyoming law, until paid.

Between March 9 and October 1, 1953, M. A. Sims and Mr. O'Hara made seven payments, each of $150, on the aforesaid new promissory note, prorated to interest and principal, which left a balance of principal sum of $3,100.88 owing on October 1, 1953.

Shortly after respondent sold his business as aforesaid, he moved to Idaho. Appellant bank commenced suit in Uinta County, Wyoming, against respondent, M. A. Sims and Andrew B. O'Hara on the last aforesaid promissory note but was unable to serve respondent personally with summons in the State of Wyoming, but served summons personally on the other two defendants in said action. Appellant as a result of said action obtained a judgment on said note against M. A. Sims and Andrew B. O'Hara in the principal sum of $3,100.88, together with interest and attorneys fees. Appellant bank thereafter commenced this action on said note against respondent in the State of Idaho.

Appellant by its appeal presents the question of insufficiency of the evidence to justify the verdict.

Respondent, concerning the alleged novation, failed to show the acceptance on the part of appellant bank of the promise of M. A. Sims and Andrew B. O'Hara, successors in interest of respondent in Sims Motor Company, to pay the balance of said promissory note, in satisfaction of respondent's obligations to appellant under said note, in substitution of respondent's promise to pay the same. Respondent, in that regard, admitted that appellant bank, operating through its vice-president Mr. Bradbury, refused to release him from the original obligation, his testimony being:

'Mr. Bradbury got a new note out and he said, 'Well, I don't think I will take you off it, but I will see that they pay each month--pay off.' So I signed a new note.

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'When he [Bradbury] refused to take me off it was quite a shock to me--* * * On this new note we were making over to these boys [M. A. Sims and Andrew B. O'Hara].'

Mr. Bradbury of appellant bank testified:

'Mr. Sims asked me if he could be relieved of the obligation on the note. I told him that I didn't feel that it was wise for the bank to do that, but that I would allow the succeeding firm, that is M. A. Sims and Andrew O'Hara, to pay the note according to payments that had been agreed to prior to that time * * *; and so, Mr. Sims leaving I wanted to obtain a new note as this other original note that we had at that time was due on July 2nd; and knowing that it would be difficult to get renewal notes from Mr. Sims when he lived in Arco, Idaho, I made out a new note for four thousand dollars, dating back to January 2nd, nineteen-fifty-three, made the note payable on...