First Nat. Bank of Denver v. Cripple Creek State Bank
| Decision Date | 07 February 1916 |
| Docket Number | 8404. |
| Citation | 163 P. 1134,63 Colo. 37 |
| Parties | FIRST NAT. BANK OF DENVER v. CRIPPLE CREEK STATE BANK. |
| Court | Colorado Supreme Court |
Rehearing Denied April 2, 1917.
Error to District Court, City and County of Denver; James H Teller, Judge.
Action by the First National Bank of Denver against the Cripple Creek State Bank. Judgment for defendant, and plaintiff brings error. Reversed.
Hughes & Dorsey, Gerald Hughes, and Berrien Hughes all of Denver, for plaintiff in error.
Dines Dines & Holme, J. C. Helm, Thomas J. Dixon, and N. Walter Dixon, all of Denver, for defendant in error
This action was instituted by the plaintiff in error to recover $27,500, with interest, being the amount alleged to be due upon five promissory notes executed and delivered by others to the defendant in error, who was the payee therein, and who in turn indorsed and delivered them to the plaintiff in error. Trial was to the court, which resulted in a judgment in favor of the defendant in error for costs. For convenience we shall refer to the parties as designated in the pleadings.
The plaintiff contends that the findings are not justified by the testimony. The principal contention is over the force and effect to be given a letter written by an officer of the plaintiff, as well as certain other acts of both the plaintiff and the defendant concerning the sundry transactions leading up to the present controversy. As the plaintiff contends the findings are not supported by the testimony, we shall present and review it in its most favorable light towards the defendant, and where there is any conflict we will accept the defendant's version thereof except the legal deductions to be drawn from the written instrument.
With but few and slight exceptions, the history concerning the five notes is about the same. The defense is likewise the same, for which reason we will only outline the testimony concerning the note of Annie E. Cone, embraced in the plaintiff's first cause of action, with some slight references to the others. This discloses that in the fall of 1908 the defendant was then, as now, a state bank in Cripple Creek, and the plaintiff a national bank in Denver; that the defendant wanted to discount some of its paper to the plaintiff, which it did under an agreement or arrangement whereby the defendant guaranteed its payment by placing its general indorsement upon the notes; that under this arrangement the plaintiff was to have only 6 per cent. per annum of the interest called for by such paper, and the defe dant the balance of the interest; that pursuant to this arrangement, upon October 30, 1908, the defendant mailed to the plaintiff 17 notes payable to defendant's order, and by it indorsed to the plaintiff, in the aggregate sum of $41,002, which amount the plaintiff paid therefor; that this included a note for $5,000 executed by Annie E. Cone, due three months after date, drawing interest at the rate of 12 per cent. per annum; that when this note became due, it, along with others, was sent to the defendant for collection or payment; that the defendant collected the interest and accepted another or new note for the principal due in three months, payable to its order, with interest at the rate of 12 per cent. per annum, which it indorsed without limitation and mailed to the plaintiff, together with one half of the interest collected, as per the terms of the original agreement, keeping the other half of the interest; that this course of procedure, with renewals every three months, continued until in June, 1910, when it appears the state bank commissioner was making an examination of the defendant bank, and it was desirous of showing that it was not liable upon, and did not have outstanding, any rediscount paper; that this fact was explained to the officers of the plaintiff by the defendant's cashier, who appealed to them for assistance in this respect, with the result that a verbal agreement was entered into to the effect that the plaintiff would have stamped the words 'Without recourse' upon the Annie E. Cone note then in existence and the renewals of the other notes theretofore rediscounted to it and then held by it with the defendant's general indorsement thereon, so that the same upon their face would show no liability against the defendant bank; that the plaintiff's officers also agreed to write a letter to the state bank commissioner stating that it held no rediscount paper of the defendant, etc.; that in consideration that the plaintiff do this the defendant, through its cashier, who negotiated and consummated this arrangement, agreed that, regardless of such indorsements being placed upon the notes, the defendant would guarantee their payment or make good any loss to plaintiff, etc., during the period said indorsements 'Without recourse' remained thereon, and would thereafter cause to be reinstated upon said notes or the renewals thereof the defendant's general indorsement; that pursuant to such agreement the plaintiff caused this Cone note and the other notes then held by it to be stamped 'Without recourse,' and its vice president to write a letter to the state bank commissioner bearing date June 18, 1910, as follows:
'Thos. Keely, Vice Pres.'
--that thereafter, when the Cone note then in existence and the other notes became due, they were sent to the defendant bank for collection or payment, when it again collected the interest, took new notes for the principals in its own name, and surrendered to the maker the old ones, and forwarded the new ones to the plaintiff with 'Without recourse' indorsed thereon, keeping the same amount of the interest as theretofore, forwarding to the plaintiff its share of the interest with the new notes; that this practice continued for one year, or until June, 1911, when the defendant's officers' attention was called to the fact of the agreements under which the 'Without recourse' indorsement was placed thereon with a request that it be eliminated thereafter and its general indorsement placed thereon, which was done upon those returned in June, 1911; that upon their maturity they were in turn sent to the defendant bank for collection or payment, who in turn collected the interest, took new notes payable to itself, and surrendered the old ones, returning the new ones with the same amount of interest as before to the plaintiff with its general indorsement thereon; that this practice continued for the period of one year and until June, 1912, at which time, when the notes became due, the plaintiff again returned them to the defendant for collection or payment, who, in turn, collected the interest, took new notes payable to itself for the principal, returned the old ones to the makers, and forwarded the new ones to the plaintiff, but with its indorsement 'Without recourse' thereon, also inclosed draft for a portion of the interest collected upon the last notes, as before, retaining the same portion as before for itself; that the plaintiff declined to accept the new notes with the 'Without recourse' indorsement and returned them, together with the remittance for the interest, to the defendant, with instructions that it either erase the 'Without recourse' indorsement and substitute its general indorsement or return the notes sent to it for collection. This the defendant declined to do. This suit was then brought to recover upon the defendant's indorsement as it stood upon the last notes sent to it for collection or payment.
The testimony as above outlined stands uncontradicted, except as it conflicts or is inconsistent within itself. The trial court found that there was no consideration for the...
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