First Nat. Bank of Glasgow v. Carroll

• Decision Date: 28 September 1920
• Citation: 179 N.W. 664,46 N.D. 62
• Parties: FIRST NAT. BANK OF GLASGOW, MONT., v. CARROLL.
• Court: North Dakota Supreme Court

46 N.D. 62

179 N.W. 664

FIRST NAT. BANK OF GLASGOW, MONT.,

v.CARROLL.

Supreme Court of North Dakota.

Sept. 28, 1920.

Syllabus by the Court.

In an action by an indorsee upon a promissory note against the maker. where the indorser had died before suit was brought, and no representative of his was party to the action, section 7871, Comp. Laws 1913, does not preclude the defendant from testifying to the true consideration for the note.

An attorney representing a party in litigation in a foreign state may give competent testimony relating to the fact of the continued pendency of the suit, without proving the contents of the court records.

Where the payee of a note transfers it by indorsement to a bank, in which such payee is a director, but not an active officer, the director's knowledge of the true consideration is not imputed to the bank.

Where the plaintiff made out a prima facie case, and the defendant introduced evidence going to establish a defense to the note, which was not met by proof that the plaintiff was a holder in due course (section 6944, Comp. Laws 1913), it was error to direct a verdict in favor of the plaintiff.

Appeal from District Court, Ward County; K. E. Leighton, Judge.

Action by the First National Bank of Glasgow, Mont., against W. J. Carroll. Judgment for plaintiff on a directed verdict, and defendant appeals. Reversed and remanded.Palda & Aaker, of Minot, for appellant.

F. B. Lambert, of Minot, for respondent.

BIRDZELL, J.

This is an appeal from a judgment entered pursuant to a directed verdict in favor of the plaintiff. The action was brought by the plaintiff as holder of a promissory note for $502, dated December 12, 1917, made payable to E. D. Coleman, and indorsed by him in blank. Coleman died before the trial of the action. At the trial the plaintiff proved the defendant's signature, and, to prove plaintiff's ownership, one R. M. Lewis, vice president of the plaintiff bank, was called and testified to the signature of Coleman as indorser, and that the bank was the owner and holder of the note.

The plaintiff rested, whereupon the defendant went upon the stand and attempted to testify to the true consideration for the note. Some of the evidence was stricken out, and frequent objections were made, so that it is somewhat difficult to ascertain what evidence the court considered in granting the plaintiff's motion for a directed verdict, made at the close of the case. But in this opinion sufficient comment will be made upon the admissibility of the evidence to determine, for purposes of a new trial, what should be admitted; also, wherein the court erred in granting the plaintiff's motion.

There are two questions raised upon the admissibility of evidence, which incidentally involve the burden of proof, and a question of constructive notice to a corporation of a fact known to a director.

[1] The defendant, over the objection of plaintiff's counsel, testified that the only consideration for the note in suit was a contingent liability of Coleman upon a cost bond of $300, which Coleman and one Truscott had signed in a suit in Montana in which the defendant was interested as plaintiff. The objection to the testimony was in substance that the statement by the defendant of the consideration for the note involved the giving of testimony concerning a transaction with a person since deceased, and that such testimony is precluded by section 7871, C. L. 1913. To sustain the contention that the evidence is inadmissible, the respondent's counsel relies upon the former decisions of this court, which were last reviewed in Druey v. Baldwin, 172 N. W. 663. The respondent's contention is sufficiently answered by the statute itself, which provides:

“(2) In a civil action or proceeding by or against executors, administrators, heirs at law or next of kin in which judgment may be rendered or ordered entered for or against them, neither party shall be allowed to testify against the other as to any transaction,” etc.

The executors, administrators, heirs at law, or next of kin of Coleman are not parties to this proceeding, and it is consequently impossible for any judgment to be rendered or ordered for or against any of them. The defendant had the right to place before the jury evidence to establish his defense, if any, notwithstanding such evidence related to a transaction with a deceased person who was not a party. This would put upon the plaintiff the burden of establishing that it was a holder in due course, in which case the defense would be overcome.

[2] Further objection was made to testimonygoing to establish that the suit in Montana in which the cost bond was furnished was still pending. The testimony consisted principally of statements by the attorney who represented one of the parties to the action. The objection was that this testimony was not the best evidence. We are of the opinion that the ordinary rule applicable to the proving of the contents of a record or of a writing is not applicable, where a conclusion of fact is sufficient, and...