Manistee Nat. Bank v. Seymour

• Decision Date: 07 January 1887
• Citation: 31 N.W. 140,64 Mich. 59
• Court: Michigan Supreme Court
• Parties: MANISTEE NAT. BANK v. SEYMOUR.

31 N.W. 140

64 Mich. 59

MANISTEE NAT. BANK v. SEYMOUR.

Supreme Court of Michigan

January 7, 1887

Error to Manistee.

Action to enforce the collection of a promissory note. There was a trial by jury, and a verdict and judgment rendered for the plaintiff. The defendant appealed.

D.S. Harley, (Benton Hanchett, of counsel,) for plaintiff.

Raussdell & Benedict and A.V. McAlvay, for defendant and appellant.

CHAMPLIN, J.

This suit is brought to enforce the collection of a promissory note dated April 12, 1884, payable in three months to the order of plaintiff, and signed by the defendant. The plea was the general issue, and notice that the note was void,--it having been obtained without consideration, and under an express promise from the plaintiff that it should not be enforced; that the money mentioned in said note was advanced by the plaintiff to one H.C. Tallman, and security taken therefor in the name of the defendant, at the especial instance of, and for the sole benefit of plaintiff, and with the express understanding between the plaintiff and defendant that he should not be held liable on said note,--the security taken being in the name of the defendant and the said note given by him to the plaintiff as a simple accommodation to the plaintiff.

Upon the trial it appeared that on October 2, 1882, H.C. Tallman made his note for $2,000, payable two months after date to the order of John Seymour, who indorsed it, and Tallman then procured it to be discounted by the plaintiff and deposited the avails to his credit with plaintiff. On October 23, 1882, Tallman made his note for $4,000, payable to the order of John Seymour, who indorsed it, and Tallman then procured it to be discounted by the First National Bank of Manistee. This note was payable in 90 days, and both were to draw 10 per cent. interest after maturity. To secure Seymour for his liability upon these indorsements, Tallman executed a mortgage upon his real estate to Seymour. Defendant, Seymour, was a stockholder and a director in the Manistee National Bank, and had been since its organization. Tallman was engaged in a mixed business,--lumbering merchandising, and real estate.

At the suggestion of the cashier of the Manistee National Bank Seymour had solicited Tallman to place his account with the Manistee National Bank, and Tallman asked the cashier what line of discount or accommodation he could obtain, and was told that he could have $10,000 upon satisfactory indorsements. Tallman suggested as indorsers a Mr. Williams and the firm of J.C. Williams & Co., druggists, of Syracuse, New York, and Tallman says that the cashier promised to look them up, and ascertain if they would be satisfactory as indorsers, and that afterwards told him that they were all right. The cashier denies this, and says they were suggested as indorsers, and he then and there turned to Bradstreet's Commercial Reporter, and informed Tallman that they were rated at from $20,000 to $25,000, and were apparently all right; but they lived eight or nine hundred miles from Manistee, and the bank could not take them, without an indorser there in the state. This was after the note of October 2d was discounted, and just before it matured. It was not paid at maturity, and Seymour waived protest.

Tallman went to Syracuse, New York, and from there sent to plaintiff a note for the purpose of renewing that of October 2d, made by him, payable to the order of J.C. Williams, for $2,000, at 90 days, dated December 14, 1882. When this note reached the plaintiff by mail, the cashier sent a telegram to Tallman, at Syracuse, that they could not accept or use Williams' paper without Seymour's indorsement. Tallman says that he immediately sent a telegraphic dispatch to Seymour not to indorse for him. Tallman returned to Manistee from the twenty-first to the twenty-third of December. The 24th fell on Sunday, and Monday was Christmas. Tallman testifies, although he is not positive, that the $2,000 note made at Syracuse, December 14th, was discounted by the plaintiff on Saturday the 23d, with Williams' indorsement, in renewal of the note of October 2d, and that he paid the interest on that day. His impression is that at the time it was discounted the defendant had not indorsed it. Tallman also testifies that on the twentieth day of December the plaintiff, in the regular course of business, discounted and placed to his credit another note, dated December 26, 1882, for $4,000, payable at 90 days to the order of J.C. Williams & Co., signed by Tallman, and indorsed by J.C. Williams & Co., and that he is under the impression that this note was not indorsed by defendant when it was discounted. These notes were entered upon the discount ledger of the bank on the 27th, and at that time they both bore the signature of defendant as indorser. These notes were not paid at maturity, and May 3, 1883, defendant gave his individual note for the amount of both notes, $6,066.44, at 90 days. This note was renewed, from time to time, the renewal note including the accrued interest until April 12, 1884, when the last note in renewal was given, which is the note in suit.

The defendant claims, and his testimony tended to show, that he did not indorse the Tallman notes, of dates December 14th and 26th, until after they had been discounted by the plaintiff; and that he then indorsed them at the request of Mr. Burr, the cashier of the plaintiff, with the agreement that he should not be harmed or holden on them, and that his individual notes were given upon the faith of this original agreement; the object being, as he claimed, to enable the bank, through his indorsement of the Tallman notes, to enforce the mortgage security given by Tallman to Seymour.

Inasmuch as both Tallman and Seymour agree in saying that Tallman refused to request Seymour to indorse these notes for him, and expressly told him not to do so, it is needless to observe that the arrangement set up by defendant would lack any legal validity for accomplishing the object stated, for the reason that it would be a fraud upon Tallman's rights. The plaintiff, however, claims that the two Tallman notes of December 14th and 26th were discounted by the plaintiff, in the usual course of business, for Tallman, with defendant's indorsement thereon, made before they were discounted, and in reliance upon his legal liability thereon as such indorser, and that there was no agreement or understanding that he should not be harmed or should not be holden on them; and that they were taken up by Seymour, and his own note given therefor, because he was liable for the payment thereof, and the several renewals of these individual notes were each and all made without any such agreement as claimed by defendant. The plaintiff's testimony tended to establish this claim.

From a review of the record it is quite apparent that there is an irreconcilable difference between the testimony of the principal witnesses to the transaction above narrated on the part of the plaintiff and defendant. If the testimony introduced upon the part of the plaintiff is believed, the recovery is right, and ought not to be disturbed, while, on the other hand, if the testimony introduced on behalf of the defendant is entitled to credence, the judgment ought to be reversed. The proper tribunal has passed upon the credibility and weight of the testimony. The jury have found a verdict for the plaintiff, thus indicating that they relied upon the testimony introduced by the plaintiff as containing the true version of the controversy, and their verdict must stand, unless it appear that errors in law were committed upon the trial that affects the rights of the parties to their prejudice.

The assignment of errors relied upon by counsel for defendant all relate to the charge of the court to the jury, and in refusing to charge as requested by the defendant.

The first error assigned embraces a portion of the charge of the court found upon page 184 of the record; another portion found upon page 187; and a refusal to charge as requested by the defendant, found upon page 192. The instructions complained of in the first assignment of error are as follows: "The defendant, while admitting the execution of this note, has tendered a plea in this case that this note was given by him to the bank without consideration; and upon that score his main defense is predicated,--a total want of consideration." Also: "Now, this is what Mr. Seymour claims. The other side claim, in rebuttal of that theory, that these notes were discounted by the bank after this man Seymour had put his name upon the paper; that they declined and refused to discount the paper without getting some man they knew to indorse it who was reliable. That is their claim. I will say to you right here, as matter of law, if the claim is true, the plaintiff can recover in this suit, and all other facts in the case--disputed facts--became immaterial; because, if that indorsement was made before discount by the bank, it affords a good consideration of the making of the notes afterwards, and the plaintiff can recover." Also in refusing to charge, as requested by the defendant, as follows: "If the cashier of the plaintiff's bank obtained the note sued upon for a special purpose, namely, that defendant might, in case of default by Tallman, foreclose the mortgage, or sue J.C. Williams & Co. at the expense of the bank, and for its sole use and benefit, it being understood that defendant himself should never be called upon to pay anything thereon, the bank is estopped from suing and maintaining a suit against Seymour on said note, and from denying the authority of the cashier in this suit; your verdict must be for defendant."

It is claimed for this assignment that the charge, and...