First National Bank of Leslie v. Stokes

• Citation: 203 S.W. 1026,134 Ark. 368
• Decision Date: 27 May 1918
• Docket Number: 8
• Parties: FIRST NATIONAL BANK OF LESLIE v. STOKES
• Court: Supreme Court of Arkansas

203 S.W. 1026

FIRST NATIONAL BANK OF LESLIE v. STOKES

134 Ark. 368

No. 8

Supreme Court of Arkansas

May 27, 1918

Appeal from Searcy Circuit Court; Jno. I. Worthington, Judge reversed.

Judgment reversed.

S. W Woods, for appellant; J. F. Henley and D. T. Cotton, of counsel.

1. It was error to refuse to give instruction No. 1, asked by plaintiff. The contract shows conclusively that Mays and Stokes were partners. 5 Ark. 270; 13 Id. 28; 95 Id. 405; 87 Id. 412.

2. It was error to permit Mays to testify that the contract was entered into between Stokes and the bank. There is no ambiguity in the contract and oral testimony was not admissible to contradict or vary the written contract. 50 Ark. 393; 35 Id. 156; 95 Id. 131.

3. It was error to refuse instruction No. 2 asked by appellant, and in giving No. 2 asked by defendants. The latter does not state the law and attempts to instruct on the weight of the evidence. The court also erred in giving No. 3 for defendants. There was no legal evidence upon which to base it. 84 Ark. 233; 99 Id. 377; 74 Id. 437.

4. Plaintiff was a national bank, and had no authority whatever to engage in the cattle business, even if Mays made the contract for the bank which he did not. Such a contract would be ultra vires.

Bratton & Bratton, for appellees; F. W. Reeves, of counsel.

1. There was no error in admitting oral testimony as to what the contract was and who made it, and that Mays merely acted as agent of the bank. 48 Ark. 543; L. R. A. 1916 A. 610; 4 A. & E. Am. Cases, 814; Jones on Ev. 155, § 434, 419; § 449, 228; § 452; 51 Am. Dec. 65; 223 F. 318; 37 L. R. A 688; 116 P. 184; 110 N.Y.S. 381.

2. There is no error in the instructions given or refused. 63 Ark. 518; 44 Id. 423; 93 Id. 521; 30 Cyc 379; 30 Am. Dec. 599.

3. The evidence sustains the verdict.

STATEMENT OF FACTS.

The First National Bank of Leslie sued John C. Stokes and Ed Mays to recover the sum of $ 1,331.87 alleged to be due on a promissory note executed to the bank by Stokes to secure money with which to buy cattle for a partnership entered into between John C. Stokes and Ed Mays.

Stokes and Mays defended on the ground that a partnership was formed between the bank and Stokes for the purpose of buying cattle, and that Mays only signed the written contract between them as agent for the bank. The contract was executed in the fall of 1915, and reads as follows:

"This agreement, made and entered into by and between J. C. Stokes of Leslie, Arkansas, party of the first part, and Ed Mays of Leslie, Arkansas, party of the second part.

"Witnesseth, for and in consideration, of the sum of one dollar and other valuable consideration, paid by the party of the second part to the party of the first part, the party of the second part agrees to use his best efforts to secure money to be furnished to the party of the first part to be used in buying cattle and to keep and care for said cattle without any charge at all for his labor, the cattle are to belong to both parties, and after the money is paid back with its interest from the proceeds of the sale of said cattle, and other expenses are paid that might accrue in way of feed, barn rents, and other expenses that are out by either of said parties for the safe keeping and caring for said cattle, then the remainder which will be the profits are to be divided equal between both parties interested.

"Ed Mays,

"J. C. Stokes."

The plaintiff is a national bank, and Ed Mays was its president and W. C. Leonard its cashier at the time the business in question was transacted. According to the testimony of Leonard a partnership was entered into between Mays and Stokes for the purpose of buying cattle; that the bank lent the money to the partnership for that purpose and was to receive 10 per cent. interest; that the note was not signed by Mays because he was the president of the bank, the largest stockholder and in reality directed the affairs of the bank. Mays explained to Leonard that he did not sign the note because it would be a violation of the United States banking laws. The partnership proved to be a losing venture. There was unpaid at the time of the institution of this suit the sum of $ 1,331.87, together with the interest on same from the 30th day of December, 1916, at the rate of 10 per cent. per annum.

According to the testimony of Mays, a partnership for the purpose of buying and selling cattle was entered into between the bank and Stokes; that he only signed the contract as agent for the bank, that either before or after the loan was made, he brought the matter up at a board meeting of the directors and informed them of his action; that the members of the board agreed that the bank would handle the deal.

The jury returned a verdict for the defendants, Mays and Stokes, and the bank has appealed.

OPINION

HART, J., (after stating the facts).

In any event the judgment must be reversed because the court erred in refusing to give instruction number one asked by the plaintiff and in giving instruction number two at the request of the defendants.

Instruction number one is as follows: "I charge you that if you find by a preponderance of the testimony that the defendants, Ed Mays and J. C. Stokes, entered into a contract by which Mays was to secure money with which Stokes was to purchase cattle and to own the cattle jointly and to share the profits, and that Mays did furnish the money directly or indirectly, and that Stokes purchased the cattle, that under the law would constitute them partners." This instruction should have been given. It was the theory of the plaintiff that Mays and Stokes entered into a contract of partnership for the purchase and sale of cattle at a profit and borrowed money from the bank to use in the business of the partnership.

On the other hand it was contended by the defendants that a partnership for the purchase and sale of the cattle was made between Stokes and the bank and that Mays simply acted as agent for the bank in making the contract. The instruction asked for submitted the plaintiff's theory of the case as to the partnership, and should have been given. Beebe v. Olentine, 97 Ark. 390, 134 S.W. 936.

The court also erred in giving instruction number two at the request of the defendants. It reads as follows: "You are instructed that if you should find from the preponderance of the evidence that the money was secured by the defendant Ed Mays from the First National Bank to be used by the defendant, J. C. Stokes to buy cattle and the bank made the loan to said Stokes for that purpose, and that a contract was made to give either the defendant Mays or the bank one-half the profits on said cattle in addition to the payment of legal interest, this alone would not make the parties partners and you will return a...