First Nat. Bank v. Bullard

• Decision Date: 10 July 1897
• Citation: 49 P. 658,20 Mont. 118
• Parties: FIRST NAT. BANK OF MILES CITY v. BULLARD.
• Court: Montana Supreme Court

49 P. 658

20 Mont. 118

FIRST NAT. BANK OF MILES CITY v. BULLARD.

Supreme Court of Montana

July 10, 1897

Appeal from district court, Custer county; George R. Milburn, Judge.

Action by the First National Bank of Miles City against William H Bullard. From a judgment for plaintiff and an order denying a motion for a new trial, defendant appeals. Reversed.

On September 28, 1895, at Miles City, Mont., six persons executed a promissory note for $1,000, payable, on demand, to the First National Bank of Miles City. It appears that the principal who signed the note was one Alfred Ward. The other persons, although joint makers of the note, signed the same as to Ward, only as sureties. One of these makers was Joseph Leighton, at the time, and subsequent thereto, president of the payee bank. Another was W. H. Bullard, the defendant and appellant in this action. Three payments were indorsed on this note as follows: April 30, 1886, $181.10; October 25 1886, $81.19; May 4, 1888, $42.40. On the 29th day of December, 1885, said Ward, for the purpose of indemnifying his co-signers of the note, executed to them a chattel mortgage on certain personal property--the fixtures and furniture of a saloon--of which he was the owner. On April 30th, the mortgagees, having taken possession of said chattels, caused the sheriff of Custer county to sell said property. At this sale defendant, Bullard, purchased a piano paying therefor the sum of $184. The remainder of the property was sold in bulk to Leighton. On the same or the next day the sheriff had a settlement with Leighton, and turned over to him, as the net proceeds of the sale, the sum of $422.60. Leighton, as president of the bank, caused the payments to be indorsed on the note in the sums and at the times specified thereon. On August 10, 1893, the bank brought suit against Bullard for the balance due on said note. The plaintiff on the trial introduced evidence for the purpose of showing that Leighton was the agent for his co-mortgagees in the chattel mortgage, and had purchased the property at the sheriff's sale upon the understanding and agreement that he should hold the property purchased by him, and, as he disposed of portions of it from time to time, should make indorsements on the note. The testimony introduced to establish the fact of this agreement was as follows: E. B Weirick, cashier of the bank, stated: "At the time this stuff was sold under the mortgage, Mr. Leighton bid it in, in the interest of the signers of the note. He was one of the makers with Mr. Ward, Mr. Bullard, and others, and, under the foreclosure of the mortgage, he bid the property in. The indorsement here of Mr. Savage [referring to the first indorsement on the note] was for the sale, as I recollect, of the piano. Mr. Leighton was a little late in getting to the sale. His idea was to purchase the whole property there, so as to keep it intact to continue the business. This property was all bid in by Mr. Leighton, in the interest of the signers of the note under this mortgage, and he was to hold the property, and dispose of it as he could, and the proceeds of those sales were to be indorsed on the note. This indorsement of May 4, 1886, for $42.40 was the proceeds of a sale of the bar,--that is, the mirror and glass back of the bar,--and, under the instructions of Mr. Leighton, I suppose that was the case. I know that this property was held by him as agent for those people, to make any indorsement of proceeds of sale of this property, and at that time this glass and bar was sold, and the proceeds indorsed on this note. *** My opinion was that Mr. Leighton intended to buy all the property there for the benefit of the makers of the note, with the understanding of continuing the business with the parties, and working out the amount of the note. I understood that it was the understanding among the makers of the note that Mr. Leighton should buy all the property in at the sheriff's sale, for the benefit of the makers. Mr. Bullard was one of the makers of that note. I don't know how there could have been an understanding between all of the makers of the note that Mr. Leighton was to buy in all the property, if it is a fact that Mr. Bullard arrived at that sale prior to Mr. Leighton getting there, and purchased the piano." Bullard in his testimony positively denies any such agreement between Leighton and himself in reference to the former buying in the property for the benefit of all the mortgagees, and applying the proceeds as aforesaid.

The court, in its instructions to the jury, virtually told them that a payment by Leighton on May 4, 1886, would remove the bar of the statute of limitations (which is six years) as to all the joint signers of the note. The jury...