Gaylord v. Nebraska Savings and Exchange Bank

• Decision Date: 03 March 1898
• Docket Number: 7854
• Citation: 74 N.W. 415,54 Neb. 104
• Parties: MARY W. GAYLORD v. NEBRASKA SAVINGS AND EXCHANGE BANK
• Court: Nebraska Supreme Court

74 N.W. 415

54 Neb. 104

MARY W. GAYLORD v. NEBRASKA SAVINGS AND EXCHANGE BANK

No. 7854

Supreme Court of Nebraska

March 3, 1898

ERROR from the district court of Douglas county. Tried below before FERGUSON, J. Reversed.

REVERSED AND REMANDED.

James H. McIntosh, for plaintiff in error.

Silas Cobb, contra.

OPINION

RYAN, C.

This action was brought by Mary W. Gaylord in the district court of Douglas county against the Nebraska Savings and Exchange Bank for the value of a certain promissory note which plaintiff alleged the bank had wrongfully converted to its own use. This note was dated December 15, 1891, and by its terms was payable to Mary W. Gaylord, or order, December 15 1896, with interest at the rate of six per cent per annum evidenced by semi-annual coupons. The defenses of the bank will probably be best understood if there is given a portion of the undisputed history of this note subsequent to its execution.

Ralph E. Gaylord, a member of the firm of Muir & Gaylord, was the only son of Mary W. Gaylord. The note in question was taken by him in settlement of some controversy and was, with a mortgage securing it, sent in a letter to plaintiff January 2, 1892. In this letter, addressed to Mrs. Gaylord in Florida, there was the following language: "Now I want at the first opportunity, to dispose of this note and mortgage for you so as to lend the money for you at a better rate of interest. I think I can do this soon. That I may have everything ready for this I inclose the bond for your indorsement and an assignment of the mortgage for your signature and acknowledgment. On the back of the note and each coupon you will see the words, 'Pay to the order of.' Please sign your name Mary W. Gaylord on the pencil line drawn under those words, eleven places in all. Also please sign your name to the assignment on the line marked 'X' and have it witnessed and acknowledged before a notary public. * * * I cannot put in the name of the assignee, for I don't know to whom I may sell this." These instructions were complied with in respect to the note at least; and with the indorsements, as indicated, it and the mortgage were returned to Ralph E. Gaylord, at Omaha. The form of indorsement on the bond and on each coupon attached thereto was as follows:

"Pay to the order of

"MARY W. GAYLORD."

There were denials in the answer of the bank, and there were also averments that the firm of Muir & Gaylord acted within the scope of its powers in transferring said note and mortgage to the bank, but there was no evidence to sustain these defenses, and Mrs. Gaylord testified that the above quotation from the letter of her son indicated the only manner in which he, or the firm of which he was a member, was authorized to use the note and mortgage. The answer of the bank, however contained the following averments: "Further answering defendant says that it did on the 9th day of March, 1892, loan to Muir & Gaylord, F. D. Muir and Ralph E. Gaylord, the sum of eight thousand dollars ($ 8,000), lawful money of the United States, and did receive from the said Muir & Gaylord, F. D. Muir and Ralph E. Gaylord, their promissory note for the payment of the said eight thousand dollars ($ 8,000) and interest six months after date. Defendant alleges that it did on the 9th day of May, 1892, loan to the said F. D. Muir and Ralph E. Gaylord the further sum of eight hundred dollars ($ 800) and receive the promissory note of the said F. D. Muir and Ralph E. Gaylord for the payment of the said eight hundred dollars ($ 800) and the interest ninety days after date. Defendant further says that at the time of the loan to the said Muir & Gaylord of the said eight thousand dollars ($ 8,000), to-wit, on March 9, 1892, the said Muir & Gaylord had in their possession under their control the assignment heretofore referred to, duly executed by the plaintiff herein, that they also had in their possession the real estate coupon bond hereinbefore referred to and payable to the order of the plaintiff, and that said bond was at that time indorsed in words and figures following, to-wit, 'Pay to the order of--[signed] Mary E. Gaylord,' and defendant did receive from the said Muir & Gaylord said coupon bond and mortgage, together with the assignment thereof, from said Muir & Gaylord as collateral security to the above notes of the said...