First Nat. Bank of New Martinsville v. Lowther-Kaufman Oil & Coal Co.
| Decision Date | 21 December 1909 |
| Citation | 66 S.E. 713,66 W.Va. 505 |
| Parties | FIRST NAT. BANK OF NEW MARTINSVILLE v. LOWTHER-KAUFMAN OIL & COAL CO. et al. |
| Court | West Virginia Supreme Court |
Submitted February 17, 1909.
Rehearing Denied Jan. 11, 1910.
Syllabus by the Court.
A joint action may be maintained by the holder of a negotiable note and a joint judgment recovered against the maker and all the indorsers, if the note has been protested, or if protest and notice has been waived by the indorsers.
A cashier has no authority, simply by virtue of his office, to bind his bank by an agreement made with the indorsers on a promissory note, and unknown to the directors, to the effect that each of said indorsers shall be liable only for a certain proportion of the debt; and it matters not whether such contract relates to original notes presented for discount, or to notes taken either in payment, or in renewal of pre-existing notes.
Notice to one of the directors of a matter affecting the interest of the bank, which it is to the interest of such director to conceal, is not notice to the bank.
In a civil action, objection to the form of the oath administered to the jury to try the case cannot be made, for the first time, after verdict. If the record shows that the jury were sworn, and the form of oath administered does not appear this court will presume that they were properly sworn.
Error to Circuit Court, Wetzel County.
Action by the First National Bank of New Martinsville against the Lowther-Kaufman Oil & Coal Company and others. Judgment for plaintiff, and defendants F. W. Clark and J. I. Norris bring error. Affirmed.
Thomas P. Jacobs and John M. Hamilton, for plaintiffs in error.
E. L Robinson, Hall & Hall, and Henry M. Russell, for defendant in error.
Plaintiff brought an action of assumpsit in the circuit court of Wetzel county against the Lowther-Kaufman Oil & Coal Company, a corporation, the maker, and C. F. Lowther, W. R. Fitch, J. I Norris, Brent Shriver, F. W. Clark, and J. W. Kaufman, the indorsers of six several negotiable promissory notes aggregating, exclusive of interest, $28,000, and on the 23d day of July, 1908, recovered a judgment for $29,195.34. To this judgment F. W. Clark and Joseph I. Norris obtained a writ of error from this court.
The notes were indorsed for the accommodation of the maker. One of them was payable to the order of C. F. Lowther and indorsed by him and the others; another one was payable to the order of Brent Shriver and indorsed by him and the others; and the remaining four of said notes were payable to all of the said defendants and were indorsed by them. The action was tried on November 2, 1907, upon a demurrer to the defendants' evidence, and the jury found a verdict in favor of plaintiff for the amount above stated, subject to the action of the court upon the demurrer to the evidence. The court sustained the demurrer to the evidence and entered judgment upon the verdict. There was also a demurrer to the declaration which the court overruled.
The first assignment of error relates to the action of the court in overruling the demurrer to the declaration. It is insisted that the demurrer should have been sustained for the alleged reason that there is no authority in law for a joint action against the maker and the several indorsers of a negotiable note when the note has not been protested, and section 11, c. 99, Code 1899 (Code 1906, § 3449), is relied on. This section provides that debt, or assumpsit, may be maintained and a joint judgment rendered against the maker and indorser of negotiable paper, "if the same be protested." The notes in the present case were not protested, but protest had been waived by the indorsers. The signatures of the indorsers appear under the following printed words on the backs of the notes which were on them at the time they were indorsed, viz.: "Demand, Notice of Protest and Nonpayment Waived." It is contended that the statute above referred to was not intended to authorize a joint action against the maker and several indorsers of a note unless it has been formally protested. We hardly think so. The declaration alleges that the indorsers waived protest and notice. The statute is remedial and should be liberally construed. Protest and notice of dishonor is intended for the protection of the indorser, and it is a right which he can waive. By waiver he makes his liability just as absolute as if the paper indorsed by him had been formally protested, and his relation to the holder and all other indorsers becomes the same in every respect as in the case of protest. The object of the statute is to give the payee, or holder of the paper, a surer and quicker remedy to collect his money than he formerly had, which was by a proceeding against each indorser in the inverse order of their indorsement; and also to avoid a multiplicity of actions. It would therefore be extremely technical and unwarranted, we think, to give the statute the limited construction contended for. It would be contrary to the spirit of the statute. It was therefore not error to overrule the demurrer to the declaration.
The next error relied on in brief of counsel is that the court erred in permitting the notes sued on to go as evidence to the jury. This involves the same question raised by the demurrer to the declaration; and, there being no error in overruling the demurrer, it necessarily follows that there is no error in admitting the notes in evidence because of want of protest. There is a written waiver on the notes.
The next error assigned relates to the rejection of the defense set up by special pleas filed by the two plaintiffs in error. The plea of nonassumpsit was also pleaded, and issues were joined on these several pleas. The special pleas set up, as a defense, a certain written contract alleged to have been made between the several indorsers on the aforesaid notes, as directors and stockholders of the Lowther Oil Company, the predecessor in interest of the Lowther-Kaufman Oil & Coal Company, fixing and limiting their liability on account of their several indorsements, of which contract it is alleged plaintiff, through its cashier, had notice, and to the terms of which it agreed. The questions arising under these several special pleas will be considered along with the questions arising under the next assignment of error, which relates to the action of the court in sustaining the demurrer to the defendants' evidence.
The contract set up in the special pleas bears date the 7th day of November, 1901, and is made between C. F. Lowther, in his own right and as administrator of F. P. Lowther, deceased, and L. M. Merrill, F. W. Clark, W. R. Fitch, Joseph I. Norris, J. W. Kaufman, and Brent Shriver. It recites that the parties named own all the stock in the Lowther Oil Company, a corporation, in the following proportions, viz.: C. F. Lowther, 1/4; the estate of F. P. Lowther, 1/4; L. M. Merrill, 1/16; F. W. Clark, 1/16; W. R. Fitch, 1/16; Joseph I. Norris, 1/16; J. W. Kaufman, 3/16; and Brent Shriver, 1/16. It further recites that it may become necessary to borrow money, to execute new notes, and to renew notes already made in order to carry on the business of the company; that in regard to such indebtedness said parties are not willing to be bound further than in proportion to the amount of their stock held in said company. The contract then proceeds to authorize and empower the president and secretary of said corporation to borrow money not exceeding $50,000, and also to renew any outstanding indebtedness, to execute the promissory note of said corporation for any loan of money, or in renewal of notes, and concludes with a guaranty for the payment of any such note in proportion to the stock owned by each, and provides that "if in the negotiation of any such loan or renewal it becomes necessary for any of said stockholders to indorse or sign any such notes individually in order to satisfy the rules and regulations of the bank from which any such money is borrowed, the said stockholders shall be liable to said bank and to each other upon any such note or notes in proportion to their said stock in said corporation." This contract was signed by the Lowther Oil Company and by all of the above-named parties, and below their signatures was the following memorandum, or note:
We have no doubt that such a contract, as between the parties to it is lawful and enforceable, but it is claimed by defendant in error that it was not a party to the contract, and is not bound by it; that the cashier was not authorized to bind the bank by such a contract; that the directors never had any knowledge of it, and never ratified it. There is no evidence in the case that Cashier Harne was authorized by the board of directors to make the agreement, nor does it appear that he ever presented it to them for ratification at any of their meetings. Mr. Harne says he does not know whether he presented it to the board of directors or not. He says, "It may have been presented at a meeting and discussed, but I don't recollect positively." He also says that he does not know that he even called it to the attention of any of the officers of the bank. There is evidence, however, that Mr. C. F. Lowther, one of the indorsers, was also a director of the bank for the years 1903, 1904. But he, being a one-fourth owner of the stock of the Lowther Oil Company, is bound by the agreement for...
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