National Bank of Commerce v. Bottolfson
| Decision Date | 17 May 1929 |
| Docket Number | 6404 |
| Parties | NATIONAL BANK OF COMMERCE OF NEW YORK, Appellant, v. OLE BOTTOLFSON, Respondent. |
| Court | South Dakota Supreme Court |
Appeal from Circuit Court, Clay County, SD
#6404—Reversed
Lyon, Bradford & Grigsby, Sioux Falls, SD
Attorneys for Appellant.
Payne & Olson, Vermillion, SD
Gunderson & Gunderson, Vermillion, SD
Attorneys for Respondent.
On June 29, 1923, the respondent, Bottolfson, made and delivered to the Commercial & Savings Bank of Sioux Falls a promissory note, which, omitting date and signature thereon, is as follows:
On August 9, 1923, the cashier of the payee bank addressed and mailed a letter to the plaintiff, National Bank of Commerce of New York, in part as follows:
In this letter, with a note of $50,000, by the Commercial & Savings Bank payable to plaintiff bank, there was inclosed, with other notes, the Bottolfson note first above mentioned, indorsed by the payee. The note of $50,000 was promptly discounted and the Commercial & Savings Bank was given credit, with plaintiff bank, for the proceeds. At maturity of the $50,000 note, it was renewed by a new note of the same amount, secured by the same collateral, including the Bottolfson note, which note was likewise discounted and the proceeds credited to the Commercial & Savings Bank.
This action was commenced by the National Bank of Commerce of New York against Bottolfson for the amount due upon his note, upon which no payments had been made. Upon the answers of a jury to special interrogatories of the court, judgment was entered below for the defendant, from which judgment, and from order overruling motion for new trial, plaintiff appeals. The defendant pleaded fraud in the procuring of his signature to the note, and serious questions of substance, pertinent to that defense, are argued on this appeal. But it is not claimed that the plaintiff had knowledge or was placed upon any notice of the facts which are claimed to be sufficient to establish fraud on the part of the Commercial & Savings Bank, the payee of the note. On the contrary, it was stipulated that plaintiff bank had no actual notice or knowledge of any claim of defense to the Bottolfson note.
Preliminary to the question on which we think this appeal should turn, we may consider whether the Bottolfson note, first above set forth, is a negotiable instrument. Respondent contends that the note is not certain in point of date of payment, due to the fact that, by its terms, the makers and indorsers are bound to any extension of time of payment that the holder may see fit to grant; that the date of maturity is rendered uncertain because such extension may be granted before maturity as well as after maturity; and that the note, for these reasons, does not comply with Rev. Code, § 1708. So far as here important, the provisions of statute, applicable, read thus:
“An instrument to be negotiable must conform to the following requirements: ...
“An instrument is payable at a determinable future time, within the meaning of this part, which is expressed to be payable:
The foregoing provisions are identical with portions of sections 1 and 4 of the Uniform Negotiable Instruments Act; 5 U. L. A. pp. 7, 41. Although courts differ concerning the question, this court is definitely aligned with the view that provisions, in a note, for extension of time of payment without notice to the makers, indorsers, and guarantors, does not render the note nonnegotiable. Security National Bank v. Gunderson, 596. The instrument here in suit is therefore a negotiable instrument.
A motion by appellant for directed verdict having been denied, the trial court, as above stated, submitted certain special interrogatories to the jury. The answers to these questions form a special verdict upon which the judgment appealed from is based. All of these questions, save one, pertain to alleged facts involved in the matter of fraud. The one special finding, material to this appeal, is as follows:
“Question: What, if anything, did the Commercial and Savings Bank of Sioux Falls owe upon the renewed note of the latter bank to the New York bank, March 31, 1925?
After verdict the plaintiff moved that this finding of the jury be vacated and that plaintiff have judgment notwithstanding the verdict. The motion was denied.
The only evidence on the question as to the amount due plaintiff on the $50,000 note of the Commercial & Savings Bank is found in a deposition of plaintiff’s vice president, taken about six months before the trial. This witness testified that the note of $50,000 was received, as first above stated, from the Sioux Falls Bank with the Bottolfson note, and other notes, as collateral, and that it was renewed at maturity by another note of $50,000 with the same collateral. The witness further stated that the appellant bank had received no payments on the note up to January 25, 1924, on which date appellant was advised that the Sioux Falls bank had been placed in the hands of the state banking department; that receiving this information the appellant bank immediately applied, upon the $50,000 note, the money it held to the credit of the Sioux Falls bank, in the sum of $3,226.81. “Since that time,” stated the witness, “we have received payments and realizations amounting to $36,033.09.”
The fair inference from this testimony is that the amount unpaid on the $50,000 note at the time the witness testified was, at least, the principal sum of $50,000 less the sums last above stated. As a matter of ordinary calculation, the unpaid amount thus ascertainable from the testimony of the witness was $10,740.10.
This affirmative testimony entitled plaintiff to the benefit of the presumption that a condition once shown to exist may be presumed, within reasonable limitations, to continue. To reject such proof as inadequate because taken by deposition a few months, or let us say a few weeks, before trial, would be to assert a proposition of unusual if not of startling consequence in the field of the law merchant. To escape the effect of such a theory the holder would have always to personally attend at trial, or trust to the presence and testimony of others who might be adversely interested. Such a result might not seem of extraordinary application to other subjects of litigation, but it would not seem to harmonize with the particular objects which brought the law merchant into existence. The testimony of plaintiff’s vice president aforesaid was uncontradicted. Where the testimony of a witness is uncontradicted and not inherently improbable, and there are no circumstances tending to raise a doubt...
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