Hayes v. State Exch. Bank

• Citation: 1915 OK 1057,54 Okla. 124,153 P. 1112
• Decision Date: 14 December 1915
• Docket Number: Case Number: 5602
• Parties: HAYES et al. v. STATE EXCHANGE BANK.
• Court: Oklahoma Supreme Court

1915 OK 1057

153 P. 1112

54 Okla. 124

HAYES et al. v. STATE EXCHANGE BANK.

Case Number: 5602

Supreme Court of Oklahoma

Decided: December 14, 1915

Syllabus

¶0 BILLS AND NOTES--Action on Note-- Accommodation Indorser--Notice of Conditions--Sufficiency of Evidence. The plaintiff sued B. and H. to recover on a promissory note. Plaintiff introduced the note in evidence and rested. At conclusion of defendants' evidence, the court sustained a demurrer thereto and gave judgment for plaintiff. Defendants B. and R., as principals, and H., accommodation indorser, were indebted to plaintiff on a note of prior date. The note having fallen due, B. went to H. for the purpose of renewing the paper. H. indorsed the note (on the back), but instructed B. not to turn it over to plaintiff until it was signed by R., and gave it to B. to take to R. for his signature. B. on the same day took the note to plaintiff and gave it to its managing officer, telling him H. wanted R.'s indorsement on the note, and the managing officer remarked that it did not make any difference to him whether R. signed it or not. R. did not sign. H. denies liability. Held, the facts and circumstances were sufficient to put plaintiff on notice of the instruction given by H. to B. at the time he indorsed and delivered the note to him for the purpose of getting R.'s indorsement, under which facts it was error to sustain a demurrer to the evidence and give judgment for plaintiff.

Error from Superior Court, Oklahoma County; Edward Dewes Oldfield, Judge.

Action by the State Exchange Bank against W. N. Hayes and another. Judgment for plaintiff, and defendants bring error. Reversed and remanded for new trial.

McAdams & Haskell, for plaintiffs in error

G. A. Paul, for defendant in error

WATTS, C.

¶1 The State Exchange Bank sued R. O. Brewer and W. N. Hayes to recover on a promissory note in the superior court of Oklahoma county, where the case was tried to the court. Plaintiff introduced the note in evidence and rested, and at conclusion of defendants' evidence the court sustained a demurrer thereto and gave judgment for plaintiff. Defendant Hayes brings error.

¶2 The record discloses that on July 19, 1912, defendant Brewer and John R. Rose, as principals, and Hayes, as an accommodation indorser, were indebted to plaintiff, evidenced by promissory note of prior date; that on July 19, 1912, the note having fallen due, Brewer went to Hayes for the purpose of renewing the paper. Hayes indorsed the note (on the back), but instructed Brewer not to turn it over to the plaintiff until it was signed by Rose, and gave it to Brewer to take to Rose for his indorsement. Brewer on the same date took the note to the bank and gave it to Mr. Cockrell, vice president and managing officer, telling him Hayes wanted Rose's indorsement on the note, and he (Brewer) would have Rose come in and sign the note, and Cockrell remarked that it did not make any difference to him whether Mr. Rose signed it or not. Rose did not sign the note, and on this state of facts Hayes denies liability. We will add that Hayes tendered the above state of facts, most of which were objected to by plaintiff and excluded by the court, but we will treat the evidence as if the court had admitted it and sustained a demurrer thereto.

¶3 Counsel for the bank discuss the proposition in the light that the bank was the only party having a right to fix conditions, and, as the paper in the form mentioned was acceptable to it, Hayes cannot be heard to complain; but this position is unsound. Hayes was a party to the proposed contract and could name conditions on which he was willing to so continue, which the bank could accept or decline, but could not hold the note as valid if it had notice and disregarded Hayes' instructions. To so construe would do violence to mutuality of contracts.

¶4 There is no question but what Hayes had a right to and did fix conditions on which he would sign the note; that is, he would indorse provided Rose's signature was gotten before delivery. The note was signed and delivered to Brewer with that understanding, and by his acceptance he at least acquiesced therein.

¶5 We think the case turns on the point as to whether the plaintiff had knowledge of, or the facts and circumstances were sufficient to put it on notice of, the instructions given by Hayes to Brewer at the time Hayes indorsed and delivered the note to Brewer for the purpose of getting Rose's indorsement before the delivery of the note.

¶6 Rev. Laws 1910 defines "notice" as follows:

"Sec. 2924. Actual notice consists in express information of a fact.

"Sec. 2925. Constructive notice is notice imputed by the law to a person not having actual notice.

"Sec. 2926. Every person who has actual notice of circumstances sufficient to put a prudent man upon inquiry as to a particular fact, and who omits to make such inquiry with reasonable diligence, is deemed to have constructive notice of the fact itself."

¶7 Neither is there any doubt in our mind but that the facts and circumstances were sufficient to put the bank on notice....