Ladd v. Ardmore State Bank

• Decision Date: 06 October 1914
• Docket Number: Case Number: 3683
• Citation: 43 Okla. 502,143 P. 170,1914 OK 461
• Parties: LADD v. ARDMORE STATE BANK.
• Court: Oklahoma Supreme Court

1914 OK 461

143 P. 170

43 Okla. 502

LADD v. ARDMORE STATE BANK.

Case Number: 3683

Supreme Court of Oklahoma

Decided: October 6, 1914

Syllabus

¶0 1. BILLS AND NOTES--Action Against Indorser--Answer--Sufficiency to Present Defense. Plaintiff sought to recover of defendant as an indorser on a promissory note. Defendant alleged facts showing he was acting for and as agent of plaintiff in allowing his name to be used as payee in said note and in indorsing same to plaintiff; that he had no interest in said note; that same was indorsed without any consideration; that the note was tainted with usury; that it was agreed between plaintiff and defendant that defendant was not to be held liable as indorser. Plaintiff filed a general reply and a motion for judgment on the pleadings, which motion was by the court sustained and judgment rendered against defendant for the amount sued for. Held, that the answer constituted a legal defense, and the court committed prejudicial error in sustaining the motion for judgment on the pleadings.

2. CHATTEL MORTGAGES--Construction -- Debt Secured. Plaintiff sued to foreclose a lien on certain personal property belonging to defendant, which it claimed under a certain chattel mortgage, executed to secure a promissory note in favor of plaintiff for $ 155. This note had been paid before the institution of this suit. The mortgage contained a provision to the effect, "and all other open accounts, owing by party of the first part to second party." It was not contended that defendant was indebted to plaintiff, other than on the note upon which defendant appeared as indorser. Held, that plaintiff had no lien upon said property by virtue of said mortgage, and the judgment of the trial court in favor of plaintiff for recovery of the property was erroneous and unauthorized.

L. S. Dolman, for plaintiff in error

Sigler & Howard, for defendant in error

RIDDLE, J.

¶1 Plaintiff in error, defendant below, prosecutes proceedings in this court from a judgment of the county court of Carter county. To his petition in error is attached a transcript of the proceedings of the trial court, and also a case-made. Plaintiff instituted a replevin suit against defendant for possession of certain personal property, claiming same under a chattel mortgage. The mortgage was executed to secure a specific debt, evidenced by a certain note in the sum of $ 155, of even date with the mortgage, to wit, December 30, 1908, due November 1, 1910. The note was payable to the order of the plaintiff bank. This note was not in controversy. It is further alleged:

"That the mortgage, besides securing the above indebtedness, especially provided that it should secure all open accounts owing by the said C. B. Ladd to the Ardmore State Bank, a copy of said mortgage is hereto attached and marked 'Exhibit A.' Thereafter, on January 29, 1910, the defendant indorsed and transferred to the plaintiff a certain note for $ 200, signed by L. F. Cohee and payable to C. B. Ladd; * * * that said note is still due and unpaid; that said Ladd, by reason of the non-payment of the said note by the said Cohee, became indebted and bound to pay the plaintiff the sum of $ 200, with interest as above stated and ten per cent. attorney fee."

¶2 It is alleged that by reason of the nonpayment of said note, the conditions of the mortgage had been breached, and that plaintiff was entitled to a foreclosure of his mortgage lien. It prayed for judgment for the amount of the note and $ 50 attorney's fee, and for foreclosure of the mortgage. The mortgage is in the usual form of chattel mortgages, with this provision:

"And all other open accounts, owing by party of the first part to second party, then this instrument to be void and of no effect; otherwise, to remain and be in full force and effect."

¶3 The second note referred to in the petition was of date January 29, 1910, and due October 1, 1910, and bearing the same date as the alleged indorsement. Defendant filed his answer, denying generally and specially each allegation of the petition, except such as are specifically admitted. He admits that he executed the mortgage set out in plaintiff's petition to secure an indebtedness of $ 155, and specially avers that the indebtedness had long since been paid and discharged, but that plaintiff had refused to discharge the mortgage of record. He further sets up as a defense that while he appeared as payee in the note and indorser on same, yet in truth said note at the time it was executed was not the note of said defendant, and that defendant has never owned or been the holder of same; that said bank did not take said note in due course of business from defendant, but took the same, together with a chattel mortgage, in the name of defendant after an agreement between plaintiff and defendant, and in order to protect said bank against the charge of usury in said note, upon which it was agreed that this defendant should not be liable, but should act as payee and indorser of said note for the benefit of said bank; that on the date said note was taken, and for a long time prior thereto, defendant had been a customer of said bank, and collecting for said bank; that upon request of plaintiff, through its officers, he permitted his name to be used as payee in said note and mortgage given to secure it, with a distinct understanding that he should not be liable as indorser thereon. He further alleged that Cohee, the maker of said note, borrowed from said bank the sum of $ 150 upon said note, and that said note upon its face called for $ 200; and, in order that said Cohee could not plead the defense of usury on said note, defendant was requested by said bank to permit his name to be used as such payee; that said note and proceeds thereof and the mortgage never came into his hands, and was never held by him, and that he was never the owner or holder of same; that his name was used as a trick and device on the part of said bank at its request, as above stated; that defendant received no consideration, nor paid out any money by reason of said note; that by reason of the confidential relation existing between plaintiff and defendant, he permitted his name to be used for the purpose of protecting the plaintiff; that plaintiff never sought to hold defendant on said note until after he had brought suit in his name against the maker, Cohee, in a justice of the peace court; and that by reason of the fact that defendant refused to testify that he was the owner of said note, plaintiff brought this suit against him. The answer was sworn to by defendant. Plaintiff filed a reply, denying generally and specifically the affirmative allegations in the answer. It further denied the allegation that there was any agreement whereby the note in question should be taken in the name of the defendant, as alleged, and for the purposes alleged. Thereafter plaintiff filed a motion for judgment on the pleadings, which was, on the 10th day of January, 1912, sustained and judgment rendered in favor of plaintiff for the sum of $ 269.90, and possession of the property described in the mortgage. To the action of the court sustaining said motion and rendering judgment on the pleadings, defendant excepted. In his petition in error, plaintiff assigns the following errors:

"(1) The court erred in sustaining the motion for judgment on the pleadings. (2) The court erred in rendering and entering judgment against plaintiff in error and in favor of defendant in error upon the pleadings."

¶4 On the part of defendant in error, at the threshold of this case, we are met with the proposition that this court has no jurisdiction, first, for the reason that the case-made attached to the petition in error was not served within the time allowed by law; and, second, that the certificate to the transcript is insufficient. Suffice it to say that motions to dismiss upon these...