First National Bank of Shakopee v. Strait
| Decision Date | 19 June 1896 |
| Docket Number | 9871,9948--(93,94) |
| Citation | 67 N.W. 987,65 Minn. 162 |
| Parties | FIRST NATIONAL BANK OF SHAKOPEE v. H. BURTON STRAIT, Administrator |
| Court | Minnesota Supreme Court |
Action in the district court for Scott county. The jury rendered a verdict in favor of plaintiff for $ 7,368. Defendant made a motion for a new trial on the ground that the verdict was not justified by the evidence and for errors of law, and afterwards made a second motion for a new trial on the ground of misconduct of the prevailing party, accident or surprise and newly-discovered evidence. From orders, Cadwell, J. respectively denying said motions, defendant appealed. First order reversed. Second order affirmed.
W. C Odell, Southworth & Coller, and Warner, Richardson & Lawrence, for appellant.
Chas G. Hinds and Henry Hinds, for respondent.
On October 13, 1885, Horace B. Strait, the defendant's intestate, David L. How, George F. Strait, and Robert Lusk were partners in the flour-milling business, under the firm name of George F. Strait & Co., at Shakopee, in this state. They had been such partners for more than five years prior to that date. George F. Strait died May 30, 1887; Robert Lusk, on March 28, 1893; David L. How, on December 22, 1893; and Horace B. Strait, on February 25, 1894. All of the parties died intestate and insolvent, except Horace B. Strait, who died intestate and solvent; and the defendant, H. Burton Strait, is the administrator of his estate. Horace B. Strait and David L. How were on October 1, 1883, and thereafter, as long as they respectively lived, directors of the plaintiff bank; the former being its president from that date to January 1, 1892, and the latter its cashier until the day of his death.
On and prior to October 13, 1885, the plaintiff held and owned a promissory note made by George F. Strait & Co. for the sum of $ 10,000, and on that day a note for the same amount, due January 1, 1886, was given in its place, signed by George F. Strait & Co. Five days thereafter, and on October 18, 1885, the flour mill of the firm was destroyed by fire. Before the maturity of this renewal note, it was stamped on its face with the words: But it has remained ever since in the possession of the bank. Interest has been paid and indorsed upon it to January 1, 1887. This is the last indorsement on the note prior to the death of George F. Strait. October 27, 1887, there was paid on the principal $ 5,000. The interest is indorsed as paid to July, 1890, on the note, in the handwriting of How.
The plaintiff claims that How and Horace B. Strait concealed from its board of directors, and from it, the fact that the original note was renewed, instead of being paid; that they falsely stamped the renewal as paid, and fraudulently concealed from the bank the fact that the note had not been paid, and that each of them, knowing that their own debt to the plaintiff had not been paid, failed to notify the plaintiff of its nonpayment; that it did not discover the facts constituting such alleged fraud until the year 1894. By this action it seeks to recover against the estate of Horace B. Strait, on account of such alleged fraud, an amount equal to the balance due on the note. The defense is: (1) Payment; (2) the statute of limitations. The plaintiff had a verdict, and the defendant made a motion for a new trial on the ground that the verdict was not justified by the evidence, and for errors of law. This motion was denied. Subsequently the defendant made a second motion for a new trial on the ground of newly-discovered evidence. This motion was also denied, and the defendant appeals from each of the orders.
The assignments of errors raise three general questions: (1) Did the trial court err in the admission of evidence? (2) Did it err in its instructions to the jury? (3) Is the verdict justified by the evidence?
The assignments of error as to the rulings of the trial court on the admission of evidence are numerous, -- some 70 in all, -- but we are of the opinion that no substantial or prejudicial error was committed in receiving evidence of the acts and admissions of How, and of the papers and records of the bank relating to the note in question, which were made or done prior to the dissolution of the firm of George F. Strait & Co., on May 30, 1887, by the death of George F. Strait. The burden was on the plaintiff to establish its allegations of fraud. Where fraud is the issue, great latitude in the admission of evidence is permissible, for it is seldom that it can be established by direct evidence. In proving its case, the plaintiff, of necessity, was obliged to resort to indirect and negative evidence, in order to prove that the note had not been paid, and that its nonpayment had been concealed from the bank. Therefore evidence of the customary course of business of the bank, as to entries in its books and records when a note was received and when it was paid, in connection with evidence of the existence or absence of such entries as to this particular note, was competent and material. The inventories made by the bank were competent and material evidence, for they tended to characterize the possession of the note by the bank after it had been stamped "Paid," and to show that the bank did not hold it as bailee of a canceled note, but as an asset of the bank.
But the evidence of the acts and admissions of How after the partnership was dissolved by the death of George F. Strait which was received...
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