First Nat. Bank of Knox v. Bakken

• Decision Date: 21 April 1908
• Citation: 116 N.W. 92,17 N.D. 224
• Parties: FIRST NAT. BANK OF KNOX v. BAKKEN et al.
• Court: North Dakota Supreme Court

17 N.D. 224

116 N.W. 92

FIRST NAT. BANK OF KNOX

v.BAKKEN et al.

Supreme Court of North Dakota.

March 18, 1908.

Rehearing Denied April 21, 1908.

Syllabus by the Court.

Action upon promissory note executed and delivered by defendants to the State Bank of K. The defense is that such bank acted as their agent in the collection of certain drafts drawn against consignments of grain, and in collecting balances due on such consignments, and that it had in its possession enough funds thus collected to liquidate the balance due on such note, and that defendants requested the application of said funds accordingly. Plaintiff bank, the successor of the State Bank of K., contends that one M., who was cashier, and not the bank, acted as such agent, and that no such funds came into the possession of said bank which were not accounted for. At the conclusion of the testimony the trial court directed a verdict in plaintiff's favor. Held, reversible error, for the reason that the testimony tended to show that a sum in excess of the amount due on the said note was received either by the bank or by M. individually, and not accounted for to defendants, and the evidence was sufficient to require a submission to the jury of the question whether the bank or whether M. acted as such agent.

In reviewing a ruling of the trial court in directing a verdict, the testimony will be construed in its most favorable light towards the party against whom such ruling is made, and all reasonable and legitimate inferences which can be deduced in his favor will be deduced therefrom; and when thus considered, if it can be said that reasonable men may fairly differ in the conclusion to be reached thereon, such ruling will be held reversible error.

If the bank, through its cashier, M., acted as such agent for defendants, and received the benefit of the transaction, it was under a legal obligation to account to defendants for such funds, even though M. exceeded his authority in thus acting; but it is held that the bank, through its proper officers, had a right to act as such agent, and hence if it did so act, such acts were not ultra vires, and the corporation would be liable to defendants for all funds thus collected.

Appeal from District Court, Benson County; John F. Cowan, Judge.

Action by the First National Bank of Knox against Nils O. Bakken and others. Judgment for plaintiff, and defendants appeal. Reversed, and new trial ordered.Siver Serumgaard and Scott Rex, for appellants. Burke & Middaugh, for respondent.

FISK, J.

Plaintiff recovered judgment in the court below pursuant to a verdict directed by the court. The suit is upon a promissory note executed and delivered by defendants to the State Bank of Knox. The plaintiff is the successor to said State Bank. The defense is that the payee bank came into possession of sufficient funds belonging to defendants to pay the balance due on said note, and that defendants requested such bank to apply said funds to the payment of the note. The funds aforesaid consisted of the proceeds of certain shipments of grain made by defendants, the latter contending that said bank acted as their agent in the collection of drafts drawn against such shipments, and in collecting the balances due thereon, while plaintiff's contention is that one Minkler, who was the cashier and the chief executive officer of the bank, acted as such agent in his individual capacity, and that the bank had no authority to act, and did not in fact act, as such agent. This was the principal controversy between the parties. At the conclusion of defendant's testimony the trial court granted plaintiff's motion for a directed verdict, and this ruling constitutes the principal assignment of error, and the only one which it is necessary for us to notice.

Was there sufficient evidence in support of such defense to require a submission of the case to the jury? In answering this question, the familiar rule must be invoked that the testimony will be construed in its most favorable light towards defendant, and all reasonable and legitimate inferences which can be deduced therefrom in their favor will be deduced, and when thus considered, if it can be said that reasonable men may fairly differ in the conclusion to be reached therefrom, it is error to take the case from the jury. Hall v. N. P. Ry. Co., 16 N. D. ---, 111 N. W. 609, and cases cited. When construed in the light of the above rule, we think the evidence is clearly sufficient to require its submission to the jury, and hence that it was error to direct a verdict. The evidence showed, or reasonably tended to show, that appellants, who were farmers, with but meager business experience and education, desired to embark in the business of purchasing and shipping grain from Pleasant Lake in this state. There being no banking facilities at that place, and appellants being desirous of drawing drafts against each shipment, when billed by the common carrier, they called upon the Bank of Knox, at Knox, N. D., for the purpose of making such arrangements, where they found J. A. Minkler, its cashier and chief executive officer, in charge. They were unacquainted with Minkler at said time, but they there made arrangements with him by which they borrowed $1,000 from the bank, giving the note in suit, and also opened an account with such bank, and as a part of the same transaction is was agreed that, when each car was ready for shipment, appellants were to notify the bank or Minkler, and they were to attend to the billing of the cars and draw drafts upon the consignee or...