First Nat. Bank of Kendrick v. Carter
| Decision Date | 27 May 1902 |
| Citation | 69 P. 123,8 Idaho 391 |
| Parties | FIRST NATIONAL BANK OF KENDRICK v. CARTER |
| Court | Idaho Supreme Court |
PROMISSORY NOTE-ASSIGNMENT-PAYMENT.-A judgment in an action upon a promissory note which was assigned by an agent of the payee who held the same for collection, after maturity, and after the same had been paid, will be reversed on appeal, said judgment being unsupported by the evidence.
(Syllabus by Sullivan, J.)
APPEAL from District Court, Nez Perces County.
Reversed and remanded. Costs awarded to the appellant.
I. N Smith, for Appellant.
The evidence does not show any transfer to the respondent. It shows that the respondent paid the note. The respondent was not a party to the note and not liable therefor contractually. (Wilson v. Wilson, 6 Idaho 597, 57 P 708; People's etc. Bank v. Craig, 63 Ohio St. 374, 81 Am. St. Rep. 639, 59 N.E. 102, 52 L. R. A. 872.) The evidence shows that the note was first held by respondent, as a collection merely; that respondent failed to protest the note; that respondent was advised that it was necessary to protest in order to hold the maker; that thereafter respondent paid the note on account of this presumed liability. This is not a transfer of the note. A transfer for collection is a qualified transfer. It is restrictive and does not pass title. (Randolph on Commercial Paper, sec. 726; Sweeney v. Easter, 1 Wall. 166; First Nat. Bank v. Reno Co., 3 F. 270; First Nat. Bank v. Cregg, 79 Pa. 384; Cecil Bank v. Farmers' Bank, 22 Md. 148; Bank of Metropolis v. First Nat. Bank, 19 F. 301.) In such a case the indorsee is a mere agent of the indorser. (Claflin v. Wilson, 51 Iowa 15, 50 N.W. 578.) The answer and the evidence affirmatively show a settlement with Lee & Co. The compromise as between themselves and Lee & Co. gave to appellant the balance of the indebtedness; released him from payment thereof. This is an absolute defense. That the rule of "part payment" on an existing debt, not satisfying such, is abrogated under such circumstances, see Stewart v. Hidden, 13 Minn. 45; Tyler etc. Co. v. Chevelier, 56 Ga. 494; Linthicum v. Linthicum, 2 Md. Ch. 21; State v. Story, 57 Mass. 738; Lamprey v. Lamprey, 29 Minn. 151, 12 N.W. 514; Stafford v. Bacon, 1 Hill, 532, 37 Am. Dec. 366; Bender v. Sampson, 11 Mass. 42; Willing v. Peters, 12 Serg. & R. 177; Ingersoll v. Martin, 68 Md. 67; Spitze v. Baltimore etc. Ry. Co., 75 Md. 162, 32 Am. St. Rep. 378, 23 A. 307.
George W. Tannahill, for Respondent.
The special contract between the indorser and the indorsee does not in any manner affect the rights of the maker. The blank indorsement of a note transfers the title. (Frost v. Fisher, 13 Colo. App. 322, 58 P. 872.) The mere possession of a negotiable instrument produced in evidence by the indorsee imports prima facie that he acquired it bona fide in the usual course of business. (Parker v. Gilmore, 10 Kan. App. 527, 63 P. 20; Spreckles v. Butler, 128 Cal. 645, 61 P. 379.) "The production of a note by a plaintiff with no payments indorsed thereon is prima facie proof of nonpayment." (Brennon v. Brennon, 122 Cal. 440, 68 Am. St. Rep. 46, 55 P. 124; Sturgis v. Baker, 39 Or. 541, 65 P. 810.) Where the intention to continue the existence of a note and not to cancel it by payment is made evident when the money is paid to the collecting agent appointed to receive it, and the owner of the note receives the amount due to him, the transaction is a purchase. (Dodge v. Trust Co., 93 U.S. 920.)
This action was brought to recover on a promissory note dated August 17, 1897, for $ 200, due October 15th after date, in favor of J. H. Lee & Co., of Boston, Massachusetts, and executed by the appellant. The complaint contains the usual allegation required in such cases, and also alleges the assignment of said note by J. H. Lee & Co., to the respondent, the First National Bank of Kendrick. The answer admits the execution of said note, denies the assignment and nonpayment thereof, and, as an affirmative defense, alleges that a compromise with the various creditors of appellant at twenty and twenty-five cents on the dollar of appellant's indebtedness was made and paid and accepted in full release, satisfaction, and discharge of appellant's indebtedness, and that, at the time of said compromise and payment, J. H. Lee & Co. were the owners of said note, and gave to appellant the balance of the indebtedness evidenced by said note, and receipted against said note, representing to appellant that said note, had been mislaid, and that such settlement of said note by appellant was without knowledge or notice of a transfer thereof, and avers that said transfer was made after maturity. Upon these issues the case was tried before a jury, and verdict and judgment were given and entered in favor of respondent (plaintiff).
Numerous errors are assigned on the admission and rejection of evidence, the insufficiency of the evidence to justify the verdict, and to the giving and refusing to give certain instructions to the jury.
The following facts appear from the record:
Said promissory note bears the following indorsements:
Math Jacobs, cashier of the plaintiff bank, which bank is the respondent in this appeal, testified that respondent first received said promissory note from the bank in Boston for collection on August 4, 1897, and that respondent bank became the owner of said note on the nineteenth day of March, 1898; that after receiving said note for collection, and before its maturity, he notified the appellant that said bank held the note for collection. Said Jacobs also testified that respondent became the owner of said note through the First National Bank of Portland, Oregon. Witness also testified that, owing to the fact that respondent had failed to protest the note, it was compelled to take the note up, and that appellant offered to settle the note by paying twenty cents on the dollar. On cross-examination the witness testified that the respondent received a letter from Emmons & Emmons, and, as near as witness could remember, they wrote that it had been sent them by J. H. Lee & Co., and that respondent had failed to protest the note, and that respondent was liable, and they wanted respondent to pay the note, and respondent informed Emmons & Emmons that, if they would assign the note to respondent and forward the note, respondent would take it up. The note was forwarded, and respondent paid it. Witness testified that he informed appellant that respondent had taken up said note. Also that respondent took up said note because it was liable, and that: It is thus shown that respondent knew that Emmons & Emmons were merely collectors of J. H. Lee & Co., and that said note was the property of said Lee & Co. It also appears at the time said note became due that J. H. Lee & Co. were the only endorsers on said note, and that they were the owners thereof, and had simply indorsed it for collection. Under that state of facts, it is difficult for us to understand why respondent became liable to pay said note because it neglected to protest payment thereof, when the only endorsers were the owners thereof, and they only indorsed it for collection.
It is shown by the testimony of appellant that on November 9, 1899 more than eighteen months after respondent claimed to have paid said note, he was owing J. H. Lee & Co., on two promissory notes (one of them being note sued on in this action) and on an open account, the sum of $ 583.68, and that he settled said entire sum by paying to said J. H. Lee & Co., $ 142.92; that they gave him a receipt in full of said indebtedness, in which receipt is enumerated the note dated August 17, 1897, payable October 15, 1897, which is the note sued on herein. The appellant also offered in evidence a written statement from J. H. Lee & Co., to him of his indebtedness to them, dated November 9, 1899, in which is enumerated the note sued on herein, in which statement J. H. Lee & Co. requested appellant to remit. The record contains a letter from J. H. Lee & Co. to appellant, dated November 9, 1899, in which they say: ...
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