First Nat. Bank of Pomeroy, Iowa v. McCullough

• Decision Date: 21 January 1908
• Citation: 50 Or. 508,93 P. 366
• Parties: FIRST NAT. BANK OF POMEROY, IOWA, v. McCULLOUGH et al.
• Court: Oregon Supreme Court

93 P. 366

50 Or. 508

FIRST NAT. BANK OF POMEROY, IOWA, v. McCULLOUGH et al.

Supreme Court of Oregon

January 21, 1908

Appeal from Circuit Court, Umatilla County; Henry J. Bean, Judge.

Action by First National Bank of Pomeroy, Iowa, against B.F McCullough and another. From a judgment for defendants plaintiff appeals. Affirmed.

This is an action by the First National Bank of Pomeroy, Iowa, a corporation, against B.F. McCullough and M.H. Gillette, to recover on two promissory notes. The facts, so far as deemed material herein, are that on March 2, 1904, and November 23d of that year the defendants obtained from one W.J. Furnish leases of certain lands in Umatilla county for a term which would expire March 1, 1907, agreeing to give for the use of the premises $640 annually. This sum was evidenced by their negotiable promissory notes, executed to Furnish, for $512 and $128, respectively, which instruments, given for the rent of 1905, were payable June 1, 1906. The leases did not contain a covenant to the effect that in case of a sale of the real property the tenancy could be terminated at the option of either party. The landlord, in the fall of 1905 listed the land with one M.L. Moody, an agent, for sale, to whom he duly indorsed the notes, which would mature June 1 1906. The agent having entered into a contract for the sale of the premises with one G.E. York, the defendants surrendered to the latter the possession of the real property, and relinquished to him all their rights under the leases. The notes mentioned were, prior to their maturity, transferred by the following indorsement: "Pay A.B. Nixon or order, waiving demand and notice of protest. H.L. Moody." The person named as the last indorsee was at the time of such transfer the cashier of the plaintiff bank. No part of the notes having been paid, this action was instituted without any other written transfer of the negotiable instruments. The complaint, embracing two causes of action, is in the usual form, states when the notes were executed, and contains, inter alia, in each count, the following averment: "That thereafter, and before the maturity thereof, said note was indorsed, transferred, and assigned to the plaintiff herein, and plaintiff is now the owner and holder of said note." The answer denies the material allegations of the complaint, states the facts, in substance as hereinbefore detailed, and avers, in effect, that about March 8, 1906, and while the defendants had a crop growing on the leased land, they, at the request of Furnish, who then was the owner and holder of the notes sued on, and at the solicitation of York, who had secured a contract for the purchase of the premises, surrendered to the latter the possession of the real property, in consideration of the cancellation of the notes given for the rent; that at that time Moody, who was then the agent of Furnish, was advised by the defendants of the payment of the notes, which, without any consideration therefor, and not in the ordinary course of business, were delivered to the plaintiff. The allegations of new matter in the answer were denied in the reply, and the cause having been tried, the defendants secured a verdict, and from the judgment rendered thereon, the plaintiff appeals.

John McCourt, for appellant.

J.P. Winter, for respondents.

MOORE J. (after stating the facts as above).

It is contended that an error was committed in permitting the defendants to introduce evidence tending to show that the notes sued on were agreed to be canceled by Furnish without having first shown that Nixon, the cashier of the plaintiff bank, had knowledge of the alleged agreement. The order of proof is a matter within the sound discretion of the trial court, the exercise of which will not be disturbed, except for an abuse of such discretion. B. & C. Comp. § 842; Jones v. Peterson, 44 Or. 161, 74 P. 661. An examination of the bill of exceptions fails to disclose any misuse of the power thus reposed.

It is maintained that the court erred in striking out, over objection and exception, Moody's testimony to the effect that the notes in question were indorsed to the plaintiff. No question seems to have been raised at the trial as to the right of the bank to maintain this action as the real party in interest. The consideration of the exception reserved is therefore limited to an inquiry as to whether or not parol evidence was admissible to show that the indorsement of the notes to Nixon, though not designated as cashier, was such a transfer as vested the legal title in the bank, and precluded the defendants from maintaining any defense that they might have had against the payee or indorsee. We will examine the cases to which plaintiff's counsel call attention in support of the legal principle which they seek to invoke. In Arlington v. Hinds, 1 D.Chip. (Vt.) 431, 12 Am.Dec. 704, it was held that a note made to a town treasurer, "or his successors in office," might be sued by the town. In National Life Ins. Co. v Allen, 116 Mass. 398, it was ruled that a principal might sue in his own name on a nonnegotiable promissory note, given for its benefit, but by its terms made payable to "J.T. Phelps, agent." In Bank of New York v. Bank of Ohio, 29 N.Y. 619, in adhering to the rule announced in the case of Bank of Genesee v. Patchin Bank, 19 N.Y. 312, it was determined that a bill drawn payable to "D.C. Converse, Esq., cashier," was payable to the bank of which he was the officer. So too, in Baldwin v. Bank of Newbury, 1 Wall. (U.S.) 234, 17 L.Ed. 534, it was adjudged that, where negotiable paper was drawn to a person by name, immediately after which appeared the word "cashier," but with no designation of the particular bank of which he was such officer, parol evidence was admissible to show that he was the cashier of the bank which was plaintiff in the suit, and that in taking the paper he was acting as agent for the corporation. The rule to be extracted from these decisions has been embodied in our statute, known as the "Uniform Negotiable Instrument Law," as follows: "When an instrument is...