Lee v. Hildebrand
| Decision Date | 02 May 1930 |
| Docket Number | 27079 |
| Citation | 230 N.W. 673,119 Neb. 717 |
| Parties | MILES N. LEE, APPELLANT, v. CHARLES P. HILDEBRAND, APPELLEE |
| Court | Nebraska Supreme Court |
APPEAL from the district court for York county: HARRY D. LANDIS JUDGE. Affirmed.
AFFIRMED.
Syllabus by the Court.
One to be an " accommodation maker" of a promissory note must not receive any benefit or consideration directly or indirectly by way of the transaction of which the note was a part, and the transaction must be one primarily for the benefit of the payee.
Parol evidence is admissible to prove that the note was given without consideration as accommodation paper and for a special purpose.
Accommodation paper executed for a specific purpose cannot be enforced against the accommodation maker by a holder who took it, knowing it was being used for an entirely different purpose than that for which it was executed.
It is not error for the trial court to direct a verdict where the questions developed at the trial are purely questions of law and where the evidence will not support a conflict upon questions of fact for the jury to determine.
Appeal from District Court, York County; Landis, Judge.
Action by Miles M. Lee against Charles P. Hildebrand. Judgment for defendant, and plaintiff appeals. Affirmed.
Miles N. Lee, Sullivan & Wilson and George W. France, for appellant.
W. L. Kirkpatrick and Good, Kirkpatrick & Dougherty, contra.
Heard before GOSS, C. J., ROSE, DEAN, GOOD, EBERLY and DAY, JJ., and MESSMORE, District Judge.
This action was brought by appellant in the district court for York county to recover on a promissory note. His petition was in the usual form and prayed judgment against appellee for $ 2,427.24, with interest thereon at 10 per cent. from August 21, 1925.
Appellee's answer admitted the giving and delivery of the note, alleged the same was given without consideration and that he received no value therefor; further, the note never was a valid and enforceable asset of the Farmers State Bank of Erickson and appellant was not the holder thereof in due course; that in the autumn of 1920 the bank owned and carried among its current assets two notes made by R. E. Coe and Harry L. Patchen in the aggregate of about $ 2,000, secured by a chattel mortgage upon certain pop-corn; that Coe and Patchen delivered said corn to the bank in good condition in the fall and winter of 1920 and 1921, and said corn was of the reasonable market value of approximately $ 3,000; that said corn was kept by the bank until it was finally disposed of; that in November, 1921, the corn still remained in the possession and control of the bank, which still had among its assets the notes of Coe and Patchen which were overdue and unpaid; that the bank, desiring to close out its transactions with these men, agreed with them whereby the bank was to surrender to them their notes and they were to deliver and turn over to the bank said corn as its own property; further, the bank, being desirous of replacing and substituting in its current assets other paper in an amount equal to the Coe and Patchen notes and accumulated interest, persuaded appellee to give his original note, at that time representing to him that his note was merely a funding of values, that he would never have to pay the note, and the bank would in a short time sell said corn and retire his note from the proceeds of the sale thereof; that appellee had never seen said corn, and the bank represented to him, on the giving of each renewal note, that the corn was ample in quality, quantity and condition to satisfy the renewal notes appellee made from time to time, and that he relied on the representations so made to him; that the bank never made a demand on him for the payment of the original note nor any of the renewals thereof; that the security therefor was liquidated by the bank, the corn having been fed to swine, the swine sold, and the proceeds from the sale thereof in the sum of $ 655.27 indorsed on said note, all of which was without appellee's knowledge; that the guaranty fund commission of Nebraska took charge and control of said bank in January, 1926, and made no demand on appellee for the payment of the note in question.
Appellant's reply admitted that appellee made, executed and delivered to said bank his promissory note on or about November 21, 1921; admitted that R. E. Coe and Harry L. Patchen were indebted to the bank, as set forth in appellee's answer, and that they transferred their title and interest in said corn to the bank; that appellee executed and delivered his note to the bank in an amount equal to the principal and interest of the notes of Coe and Patchen; admitted that the bank fed said corn to swine, sold the same, and the proceeds from the sale thereof in the sum of $ 655.27 were credited on appellee's note. Appellant denied each and every allegation of fact in appellee's answer; denied the existence of the alleged agreement; plead the illegality thereof and an estoppel to assert the same, if made; denied appellee was an accommodation maker and that the note was given for a funding of values; set out the renewals of the original note made by appellee, the appointment of a receiver for the bank, and the sale of appellee's note to appellant by said receiver, and that said note was carried as an asset of the bank.
On the trial of the action, at the close thereof, the trial judge directed a verdict for appellee, from which ruling appellant appeals.
The evidence adduced at the trial shows the note sued upon to be a fifth renewal of the original note given by appellee to said bank and differs therefrom only as to the amount and date; that the president of the bank, Mr. Doran, obtained from appellee, his son-in-law, the original note on November 21, 1921, and at that time had a conversation with appellee as follows: "The conversation was this, that the Farmers State Bank at that time owned 1,500 bushels of pop-corn that they couldn't carry in the pouches of the bank, and he said that the price of pop-corn at that particular time wasn't very good, and they were holding the pop-corn for a higher market, and he asked me if I would sign my note for this amount that the bank had in the pop-corn at that time, with the understanding that they would sell the pop-corn and cancel the note; and that's what I did."
It appears that Coe and Patchen each owed the bank on their separate notes, and the collateral for said notes was certain pop-corn; that the bank was examined on August 14, 1921, and a recommendation made that the Coe and Patchen notes must be liquidated; Coe and Patchen each later signed a waiver, assigning their title and interest in said corn to the bank; said notes were carried as assets of the bank on December 7, 1921, when the bank was examined, and on February 4, 1922, the Coe and Patchen notes were charged off the books as assets of the bank and appellee's note went into the bank at that time in the exact amount of the Coe and Patchen notes, with interest added.
Mr. Boyle, cashier of the bank, testified that Mr. Doran brought appellee's note with him when he came up on one of his trips to Erickson and said we could place it in the assets of the bank for this corn that we have taken over from these parties. He further testified he knew the note was given by appellee for the accommodation of the bank, and Mr. Doran said he preferred putting in the note for the corn rather than carrying it as an item of property the same as they carried real estate on the bank's books.
Mr Jones, who succeeded Boyle as cashier of the bank, testified that appellee...
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