First State Bank of Eckman, a Corp. v. Kelly

• Decision Date: 16 March 1915
• Court: North Dakota Supreme Court

152 N.W. 125

30 N.D. 84

FIRST STATE BANK OF ECKMAN, a Corporation, v. PETER KELLY

Supreme Court of North Dakota

March 16, 1915

Appeal from the District Court of Bottineau County, Burr, J.

Judgment for defendant, and plaintiff appeals.

Reversed and remanded.

Judgment and order reversed and set aside, and cause remanded.

Bangs & Robbins for appellant.

Oral evidence of a collateral agreement is inadmissible. 17 Cyc 589, 644; 1 Enc. Ev. 453; 1 Dan. Neg. Inst. § 80; Joyce Defenses to Com. Paper, 320; 3 Randolph, Com. Paper, § 1901; 4 Am. & Eng. Enc. Law, 2d ed. 146-484; American Gas & Ventilating Mach. Co., 43 L.R.A. 453, note.

The execution of a contract in writing, whether the law requires it or not, supersedes all oral negotiations or stipulations concerning the matter which preceded or accompanied the execution of the instrument. Thompson v. McKee, 5 Dakota 172, 37 N.W. 367; National German American Bank v Lang, 2 N.D. 66, 49 N.W. 414; First Nat. Bank v. Prior, 10 N.D. 146, 86 N.W. 362; Sargent v. Cooley, 12 N.D. 1, 94 N.W. 579; Johnson v. Kindred State Bank, 12 N.D. 336, 96 N.W. 588; Merchants' State Bank v. Ruettell, 12 N.D. 519, 97 N.W. 853; Alsterberg v. Bennett, 14 N.D. 596, 106 N.W. 49; Rieck v. Daigle, 17 N.D. 365, 117 N.W. 346; Earle v. Enos, 130 F. 467; Payne v. Mutual L. Ins. Co., 72 C.C.A. 493, 141 F. 339; Harrison v. Morrison, 39 Minn. 319, 40 N.W. 66; Kulenkamp v. Groff, 71 Mich. 675, 1 L.R.A. 594, 15 Am. St. Rep. 283, 40 N.W. 57; Central Sav. Bank v. O'Connor, 132 Mich. 578, 102 Am. St. Rep. 433, 94 N.W. 11; Lipsett v. Hassard, 158 Mich. 509, 122 N.W. 1091; Dendy v. Gamble, 59 Ga. 434; Byrd v. Marietta Fertilizer Co., 127 Ga. 30, 56 S.E. 86; Crooker v. Hamilton, 3 Ga.App. 190, 59 S.E. 722; Commonwealth Trust Co. v. Coveney, 200 Mass. 379, 86 N.E. 895; Fambro v. Keith, 57 Tex. Civ. App. 302, 122 S.W. 40; Gerli v. National Mill Supply Co., 78 N.J.L. 1, 73 A. 252; Dickson v. Harris, 60 Iowa 727, 13 N.W. 335; Chapman v. Chapman, 132 Iowa 5, 109 N.W. 300; City Deposit Bank v. Green, 130 Iowa 384, 106 N.W. 942; Homewood People's Bank v. Heckert, 207 Pa. 231, 56 A. 431; Bass v. Sanborn, 119 Mo.App. 103, 95 S.W. 955; Jamestown Business College Asso. v. Allen, 172 N.Y. 291, 92 Am. St. Rep. 740, 64 N.E. 952; Western Carolina Bank v. Moore, 138 N.C. 529, 51 S.E. 79; Cline v. Farmers' Oil Mill, 83 S.C. 204, 65 S.E. 272; Farmers' Bank v. Wickiffe, 131 Ky. 787, 116 S.W. 249.

The cashier was loaning the bank's money upon the responsibility of Kelly. He did not have the implied power to so loan the money, and at the same time make an agreement that Kelly was not to be held, and thereby wipe out the security of the bank in the original transaction. 1 Morse, Banks & Bkg. 4th ed. § 167; 1 Bolles, Bkg. p. 361; 2 Thomp. Corp. 2d ed. §§ 1532, 1533; Thompson v. McKee, 5 Dakota 172, 37 N.W. 367; Mead v. Pettigrew, 11 S.D. 529, 78 N.W. 945; State Bank v. Forsyth, 41 Mont. 249, 28 L.R.A. (N.S.) 501, 108 P. 914; First Nat. Bank v. Lawther-Kaufman Oil & Coal Co., 66 W.Va. 505, 28 L.R.A. (N.S.) 511, 66 S.E. 713; First Nat. Bank v. Foote, 12 Utah 157, 42 P. 205; Gallery v. National Exch. Bank, 41 Mich. 169, 32 Am. Rep. 149, 2 N.W. 193; Bank of United States v. Dunn, 6 Pet. 51, 8 L. ed. 316; United States v. City Bank, 21 How. 356, 364, 16 L. ed. 130, 133; Bank of Metropolis v. Jones, 8 Pet. 1216, 8 L. ed. 850, 851; Martin v. Webb, 110 U.S. 7, 14, 28 L. ed. 49, 52, 3 S.Ct. 428; Moores v. Citizens' Nat. Bank, 111 U.S. 156, 169, 28 L. ed. 385, 390, 4 S.Ct. 345; Potts v. Wallace, 146 U.S. 689, 706, 36 L. ed. 1135, 1141, 13 S.Ct. 196.

Kelly was chargeable with notice that the cashier possessed no such authority; he knew the money was being loaned to him, that the money was the bank's money, and that the cashier could not release him from liability in the same transaction. State Bank v. Forsyth, 41 Mont. 249, 28 L.R.A. (N.S.) 501, 108 P. 914; Rev. Codes 1905, §§ 6331, 6494, Comp. Laws 1913, §§ 6914, 7076; Rouse v. Wooten, 140 N.C. 557, 111 Am. St. Rep. 875, 53 S.E. 430, 6 Ann. Cas. 280; Cellers v. Meachem (Sellers v. Lyons) 49 Ore. 186, 10 L.R.A. (N.S.) 133, 89 P. 426, 13 Ann. Cas. 997; Lumbermen's Nat. Bank v. Campbell, 61 Ore. 123, 121 P. 430; Hunter v. Harris, 63 Ore. 505, 127 P. 786; Northern State Bank v. Bellamy, 19 N.D. 509, 31 L.R.A. (N.S.) 149, 125 N.W. 888; Murphy v. Panter, 62 Ore. 522, 125 P. 292; Vanderford v. Farmers' & M. Nat. Bank, 105 Md. 164, 10 L.R.A. (N.S.) 129, 66 A. 47; Richards v. Market Exch. Bank Co., 81 Ohio St. 348, 26 L.R.A. (N.S.) 99, 90 N.E. 1000; White v. Savage, 48 Ore. 604, 87 P. 1040; Packard v. Windholtz, 88 A.D. 365, 84 N.Y.S. 666; Smith v. State Bank, 54 Misc. 550, 104 N.Y.S. 750; Rowe v. Bowman, 183 Mass. 488, 67 N.E. 636; Lowell v. Bickford, 201 Mass. 543, 88 N.E. 1.

The admission of evidence of such agreement was prejudicial error. White v. Savage, 48 Ore. 604, 87 P. 1040; Lowell v. Bickford, 201 Mass. 543, 88 N.E. 1; Lumbermen's Nat. Bank v. Campbell, 61 Ore. 123, 121 P. 427.

The evidence was insufficient to justify the verdict. No fact was pleaded showing fraudulent conduct of the bank, nor was there any showing by proof of fraud. State ex rel. Dorgan v. Fisk, 15 N.D. 224, 107 N.W. 191.

The delivery of a note upon the promise of the party to whom it is delivered that he will have another sign it is not a conditional delivery. Mitchell v. Altus State Bank, 32 Okla. 628, 122 P. 666; Whitaker v. Richards, 134 Pa. 191, 7 L.R.A. 749, 19 Am. St. Rep. 684, 19 A. 501; Sellers v. Territory, 32 Okla. 147, 121 P. 228; Trustees of Schools v. Sheit, 119 Ill. 579; Risse v. Hopkins Planing Mill Co., 55 Kan. 518, 40 P. 904; Simpson v. Bovard, 74 Pa. 351; Whitaker v. Richards, 134 Pa. 191, 7 L.R.A. 749, 19 Am. St. Rep. 684, 19 A. 501.

The presumption is that where an instrument has passed out of the hands of the maker, an intentional delivery is made. The contrary must be clearly proved. Rev. Codes 1905, § 6318, Comp. Laws 1913, § 6901; Ewell v. Turney, 39 Wash. 615, 81 P. 1047; Hayne, New Trials & App. p. 623; Driscoll v. Market Street Cable R. Co., 97 Cal. 553, 33 Am. St. Rep. 203, 32 P. 591, 11 Am. Neg. Cas. 186; Fuller v. Northern P. Elevator Co., 2 N.D. 220, 50 N.W. 359; McMillen v. Aitchison, 3 N.D. 183, 54 N.W. 1030; McArthur v. Dryden, 6 N.D. 438, 71 N.W. 125; Fulton v. Cretian, 17 N.D. 335, 117 N.W. 344; Idaho Mercantile Co. v. Kalanquin, 8 Idaho, 101, 66 P. 933; Wilson v. Vogeler, 10 Idaho 599, 79 P. 508; Golstone v. Rustemeyer, 21 Idaho 703, 123 P. 635; Ilo v. Ramey, 18 Idaho 642, 112 P. 126; Heink v. Lewis, 89 Neb. 705, 131 N.W. 1051; International & G. N. I. R. Co. v. Brice, Tex. Civ. App. , 111 S.W. 1094; Wiley v. Atchison, T. & S. F. R. Co., 103 Tex. 336, 127 S.W. 166; Drum v. Capps, 240 Ill. 524, 88 N.E. 1020; Southwestern Development Co. v. Boyd, 7 Ind. Terr. 773, 104 S.W. 1174; Branson v. Caruthers, 49 Cal. 374; Field v. Shorb, 99 Cal. 661, 34 P. 504; Re Wilson, 117 Cal. 262, 49 P. 172, 711; Re Coburn, 11 Cal.App. 604, 105 P. 924; Houston v. Davis, 162 Ala. 722, 49 So. 869; Geier v. Howells, 47 Colo. 345, 27 L.R.A. (N.S.) 786, 107 P. 255.

Where the failure of the principal to sign the instrument in no way affects the rights or liability of the surety, the instrument is valid, and the surety is bound, unless the surety signs upon the express condition that the principal shall also sign before delivery to the obligee. 32 Cyc. 41; 1 Brandt, Suretyship, § 169, note 33; March v. Phillips, Tex. Civ. App. , 144 S.W. 1160; Mitchell v. Hydraulic Bldg. Stone Co. Tex. Civ. App. , 129 S.W. 148; Wright v. Jones, 55 Tex. Civ. App. 616, 120 S.W. 1139; Star Grocer Co. v. Bradford, 70 W.Va. 496, 39 L.R.A. (N.S.) 184, 74 S.E. 509.

Both Kelly and Chase were principals. The mere fact that one was called a surety does not make him such. Kelly was paying his own debt. Garrison v. Nelson, 4 Tex.App. Civ. Cas. (Willson) 534, 19 S.W. 248; Pape v. Randall, 18 Ind.App. 53, 47 N.E. 530; Gund v. Ballard, 73 Neb. 547, 103 N.W. 309; Wimberly v. Windham, 104 Ala. 409, 53 Am. St. Rep. 70, 16 So. 23.

Greenleaf, Bradford, & Nash, for respondent.

There must be a consideration or there is no contract. The accommodated party cannot recover from the accommodation maker of a promissory note. Weeks v. Bussell, 8 Wash. 440, 36 P. 265; Corlies v. Howe, 11 Gray, 125, 71 Am. Dec. 693, and cases cited.

It may be shown in such cases that the party against whom a recovery is sought was merely a surety. Windhorst v. Bergendahl, 21 S.D. 218, 130 Am. St. Rep. 715, 111 N.W. 544.

The note was only conditionally delivered, and was not to take effect until and unless sgined by another party, one Chase. The note was entirely without consideration to Kelly. He was a mere surety. McCormick Harvesting Mach. Co. v. Faulkner, 7 S.D. 363, 58 Am. St. Rep. 839, 64 N.W. 163.

A new trial will be granted where the verdict is plainly and clearly against the evidence; where the verdict shocks the sense of justice, or indicates that the jurors were influenced by passion, prejudice, or other improper motives. 29 Cyc. 821-830.

But one or more of these conditions must be clearly manifest. Fuller v. Northern P. Elevator Co., 2 N.D. 220, 50 N.W. 359.

OPINION

CHRISTIANSON, J.

This is an appeal from the judgment and an order of the district court of Bottineau county denying plaintiff's alternative motion for judgment notwithstanding the verdict or for a new trial. The action was brought to recover upon a promissory note in the sum of $ 730.30, which it is alleged was executed and delivered to the plaintiff by the defendant for value. The complaint is in the usual form, and the answer alleges that the plaintiff induced the defendant, by means of fraud and misrepresentation and without consideration, to affix his signature to an instrument presented by the...