Hamburg Bank v. George & Butler

• Decision Date: 06 December 1909
• Citation: 123 S.W. 654
• Parties: HAMBURG BANK et al. v. GEORGE & BUTLER.
• Court: Arkansas Supreme Court

123 S.W. 654

HAMBURG BANK et al. v. GEORGE & BUTLER.

Supreme Court of Arkansas.

December 6, 1909.

Appeal from Circuit Court, Ashley County; H. W. Wells, Judge.

Action by George & Butler against the Hamburg Bank and another for a conversion of securities. From a judgment for plaintiff, defendants appeal. Reversed and remanded for new trial.

Moore, Smith & Moore and W. L. & D. D. Terry (J. C. Norman and Geo. W. Norman, of counsel), for appellants. Robert E. Craig, for appellee.

McCULLOCH, C. J.

The plaintiffs (appellees), George & Butler, instituted this action at law against the Hamburg Bank, a banking corporation, and W. H. Tebbs, its cashier, to recover the value of a lot of county scrip of Ashley county, alleged to be the property of plaintiffs and which the defendants are alleged to have converted and sold. Plaintiffs alleged in their complaint that they borrowed from defendant bank through its cashier the sum of $12,597.34, with which to purchase a lot of county scrip; that they purchased said scrip and delivered same on March 9, 1906, to the bank as security for the payment of said amount loaned to them, with interest thereon; that the bank and its said cashier on October 30, 1906, sold said scrip or permitted it to be sold without the consent of plaintiffs, and converted the proceeds. They prayed judgment for the price of the scrip less the amount of their said indebtedness to defendants, a balance of $4,911.03.

The defendants in their answer denied that they loaned money to plaintiffs with which to purchase scrip, or that the plaintiffs purchased same or delivered same to defendants as security; but alleged the facts concerning the scrip transaction to be as follows: That G. P. George represented to one T. A. Jackson that he had an option at the price of 45 cents on the dollar on a lot of Ashley county scrip then owned by Caldwell & Drake, and that they (Jackson and George) entered into an agreement to the effect that George should go to Little Rock and purchase said scrip for Jackson and sell it to the latter at the price of 50 cents on the dollar; that Jackson would arrange with defendant bank to honor George's draft for the price of the scrip; that, pursuant to this agreement, George purchased the scrip from Caldwell & Drake, and forwarded a draft on defendant bank with the scrip attached for the price thereof, and that the bank paid the draft for and at the request of Jackson, and that the scrip was delivered to the bank for Jackson. They alleged that another lot of scrip was purchased by plaintiffs for Jackson in the same manner, and that the only connection either the bank or its cashier ever had with the scrip transaction was to pay the drafts at Jackson's request drawn for the price of the scrip. They alleged that Jackson immediately took charge of the scrip, and afterwards sold it. The case went to trial before a jury, and verdict was rendered in favor of the plaintiffs for the sum of $2,650.

There was a sharp conflict between the testimony of plaintiff George and defendant Tebbs, the cashier of the bank, between whom the transactions in question were negotiated. The former testified positively that he borrowed the money from the bank to purchase the scrip for his firm, George & Butler, and delivered it to the bank as security for the loan. Defendant Tebbs testified that he advanced the money to plaintiff on instructions from Jackson, that the scrip was delivered to the bank for Jackson attached to the draft, and that Jackson gave his note to the bank for the amount advanced. He said George told him that the scrip was being purchased for Jackson. The evidence was sufficient to sustain a verdict either way on the issues presented.

Errors of the court are assigned in permitting the plaintiffs, George & Butler, each to testify concerning conversations between themselves in the absence of defendants about their own acts and declarations leading up to the purchase of the scrip. George was permitted to testify as follows: "When I went into the office, Butler handed me this telegram, of date March 14, 1906. It was in words and figures as follows: [Reading it.] Mr. Butler discussed the proposition of who should go to Little Rock. It was decided that I should go. The proposition of funds was brought up. We had been in communication with the Mercantile Trust Company of Little Rock. We thought we could get the money by putting up the scrip and probably 2,000 or 3,000 acres of land in Ashley county. I told Mr. Butler to make out a list of our lands, and forward it to me at Little Rock." Butler was permitted, over the objection of defendants, to testify as follows: "We conceived the idea of locating or securing the Caldwell & Drake scrip. That was scrip issued for the building of this courthouse. We had correspondence with them from time to time. I don't know how many weeks or months. There was several letters passed between us. Mr. George went to Little Rock to negotiate about it. During this time we were figuring on where we were going to get the money to pay for this scrip. We had written to the Mercantile Trust Company and other banking institutions to see if we could raise the money. One of the banks wrote us. We wanted to borrow the money at 6 per cent. and give the scrip we purchased as security. We were satisfied we could get it if we had the right kind of security. Some time in March our negotiations with Caldwell & Drake culminated by them sending us a telegram to come to Little Rock. I believe it was George Caldwell, who was business manager. He sent for us to come to Little Rock and make a deal about that Ashley county scrip. George was not in the office when the telegram came. It was in the morning before the train left. I phoned to George to come to the office at once. We discussed the matter, and decided that he should go to Little Rock, inasmuch as he had gone there before, and see if he could close the trade. Fifty cents was the limit we could offer to pay for the scrip. We had something over $3,000 in scrip before that. We had disposed of $2,000 of that to Mr. Gates and $1,000 to Mr. Compere. We got everything in shape to make possible this deal. We wanted to raise the money for this big batch of scrip. We had our abstract books, which we expected to put up in addition. I was to make out a list of the lands, the abstract books, and the value of the lands. I was to send that up so that he could present that to the bank to secure the money. After we made that agreement, he left to go to the Hamburg Bank, with whom we were doing business, to draw on our account to go to Little Rock. He was gone a few minutes and come back with a letter from the Hamburg Bank. It said to honor George's draft for as much as $14,000. George left for Little Rock. He was gone a day or two, and came back, and said that the scrip had been landed."

The tendency of this testimony was to corroborate the testimony of George in his statement that he borrowed the money from the bank with which to purchase the scrip on their own account, instead of purchasing it for Jackson, as claimed by Tebbs. It was improper to corroborate him in this way. These were self-serving acts and declarations of the plaintiffs, which were not competent evidence against the defendants. Their prejudicial effect is manifest, for the conflict between the several versions of George and Tebbs was a sharp one, and the slightest corroboration was calculated to turn the scales in favor of either. A party cannot be permitted to corroborate himself by proving what he said or did at another time. "Res inter alios acta alteria nocere non debet," as a maxim of the law of evidence, is universally recognized. Mr. Chamberlayne, in his note to Best on Evidence (section 506), discussing this rule, says that: "When the person whose words or acts are offered in evidence is also the opposite party to the suit, the evidence is further inadmissible by virtue of another important principle — that no man shall be allowed to make evidence for himself." The following authorities may be consulted as establishing the...