New England Nat. Bank of Kansas City v. Hubbell
| Citation | 238 P. 308,41 Idaho 129 |
| Parties | NEW ENGLAND NATIONAL BANK OF KANSAS CITY, a Corporation, Appellant, v. J. I. HUBBELL and DOW WILLIAMS, Respondents |
| Decision Date | 07 July 1925 |
| Court | Idaho Supreme Court |
APPEAL AND ERROR-MOTION FOR DISMISSAL-BILLS AND NOTES-CONDITIONAL DELIVERY-BURDEN OF PROOF-EFFECT OF RENEWAL NOTE-TRIAL-INSTRUCTIONS-EVIDENCE-DECLARATIONS AGAINST INTEREST-COMPETENCY-CORPORATIONS-NOTICE TO OFFICERS-ESTOPPEL OF OFFICERS AS AGAINST CORPORATION.
1. A motion for dismissal of an appeal will not be considered if the motion and supporting papers in themselves do not show moving party's right to dismissal.
2. In the absence of an agreement that an indorsement shall not take effect as a contract until additional indorsers are secured, a promissory note is complete as a contract, against the indorsers, upon its manual delivery to payee, regardless of whether the indorser or the payee undertakes to procure additional signatures.
3. If there is an agreement limiting the effect of the indorsement the note does not constitute a liability against the indorser until the additional indorsers are procured.
4. An understanding by one party to a promissory note does not constitute an agreement, so as to limit the effect of an indorsement.
5. The party setting up the defense of conditional delivery of a promissory note has the burden of proving such defense.
6. In determining whether or not a single instruction is prejudicial, it will be considered in connection with other instructions.
7. Instruction on burden of proof considered in connection with other instructions given, and held not prejudicial.
8. Where a party introduces evidence tending to show delivery of a promissory note as a present obligation, as against evidence of conditional delivery produced by other party, the court is required to instruct the jury upon the law applicable to both theories of the case.
9. Where the evidence is such that a jury could find a verdict in favor of some defendants, and against others, they should be instructed accordingly.
10. Where both the original note, upon which the action is brought, and a note given in renewal thereof were indorsed by defendants upon the condition that a certain number of indorsers should be procured before the indorsement should take effect against the defendants, the execution of the renewal note did not under such circumstances bar the defendants from setting up against the original note the defense that the condition had not been complied with.
11. Notice to an officer of a corporation is notice to the corporation unless the officer, as a matter of fact, is acting adversely to the corporation.
12. Refusal of an instruction that the jury should not be influenced by the fact that one party to an action is a large corporation is not error where there is not reason to distrust the integrity of the jury or impute partiality to them.
13. A party by becoming a director of a corporation does not lose the right to interpose in an action upon a promissory note by the corporation against himself and others a defense thereto which accrued to him prior to the time he became such director, nor is he barred from claiming that the corporation has not performed a condition precedent to its acquiring a right of action against him on such note.
14. In an action upon an original note, evidence that defendant as a member of the loan and discount committee of a bank had approved a note given in renewal thereof is admissible as a declaration against interest to rebut claim by such defendant, indorser on both notes, that the bank had acquired no right of action against him by its failure to procure other indorsers on such notes.
15. The judgment of the lower court will be reversed where, on the whole record, the instructions given did not fairly present the appellant's case to the jury, and it thereby did not have a fair and impartial trial.
APPEAL from the District Court of the Ninth Judicial District, for Bonneville County. Hon. Geo. W. Edgington, Judge.
Action upon promissory note. Judgment for defendants. Reversed and new trial granted.
Judgment of the district court reversed, with directions. Costs awarded to appellant.
G. D McClintock, for Appellant.
A party to a suit is entitled to have instruction given at his request presenting his theory of the case. (14 R. C. L. 799; Jones v. City of Caldwell, 20 Idaho 5, 116 P. 110, 48 L. R. A., N. S., 119; Biggs v. Seufferlien, 164 Iowa 241, 145 N.W. 507; Poole v. Consolidated St. Ry. Co., 100 Mich. 379, 59 N.W. 390, 25 L. R. A. 744; Russell v. State, 77 Neb. 519, 110 N.W. 380; 14 R. C. L. 794; Gypsy Oil Co. v. Ginn, 88 Okla. 99, 212 P. 314; Anderson v. Wallowa National Bank, 100 Ore. 679, 198 P. 560.)
A note delivered as a present obligation with an understanding that the indorsers may secure other signers is not a conditional delivery. (Zimbleman & Otis v. Finnegan, 141 Iowa 358, 118 N.W. 312; Rohrman v. Bonser, 157 Ky. 397, 163 S.W. 193; Mitchell v. Altus State Bank, 32 Okla. 628, 122 P. 666; McGregor v. Skinner (Tex.), 47 S.W. 398.)
If there are two defendants in an action, one of whom may under the evidence be found liable and the other not liable, it is error to give instruction which assumes that if one defendant is liable, both are liable. (Hansen v. Crocker, 160 Ill.App. 514.)
An instruction undertaking to state the material facts necessary to a party's recovery, but omitting therefrom material facts, is fatally defective. (Wiemer v. Temple, 145 Ill.App. 498; Southern Ry. Co. v. Lawler, 11 Ala. App. 241, 65 So. 857; Springfield Con. Ry. Co. v. Gregory, 122 Ill.App. 607; Dudley v. State, 40 Ind.App. 74, 81 N.E. 89; Atlantic Coast Line Ry. Co. v. Newton, 118 Va. 222, 87 S.E. 618; Indianapolis Trac. & Term. Co. v. Mathews, 177 Ind. 88, 97 N.E. 320; Illinois Cent. Ry. Co. v. Warriner, 132 Ill.App. 301, 82 N.E. 346.)
Giving of a renewal note waives any defense to original of which maker had knowledge at time of renewal. (Longacre v. Robinson, 274 Pa. 35, 117 A. 408; McGinnis v. McCormick, 28 Ga.App. 144, 110 S.E. 341; Thorpe v. Cooley, 138 Minn. 431, 165 N.W. 265; Adams v. Overland Auto Co. (Tex. Civ.), 202 S.W. 207.)
One who has had time and opportunity to ascertain the facts about a note and delivers a renewal thereof will be deemed to have knowledge of any defects and waive them. (Smith v. Smith, 4 Idaho 1, 35 P. 697.)
A bank will not be charged with knowledge or notice of facts known to one of its officers in connection with a transaction in which such officer is interested adversely to the bank, or is an officer of a corporation dealing with the bank, and this is true even though such officer is the only one who acts for the bank in such transaction. (American Nat. Bank v. Ritz (W. Va.), 74 S.E. 679, 40 L. R. A., N. S., 156; First Nat. Bank v. Foote, 12 Utah 157, 42 P. 205; Lamson v. Beard, 94 F. 30, 36 C. C. A. 56, 45 L. R. A. 822; People's Savings Bank v. Hine, 131 Mich. 181, 91 N.W. 130; Union State Bank v. First Nat. Bank, 122 Ark. 612, 184 S.W. 411; First Denton Nat. Bank v. Kenney, 116 Md. 24, Ann. Cas. 1913B, 1337, 81 A. 227; City Bank of Wheeling v. Bryan, 78 S.E. 400; Smith v. Wallace Nat. Bank, 27 Idaho 441, 150 P. 21.)
Inasmuch as corporate officers hold property for the corporation and not otherwise, they are estopped to dispute the corporation's title to or custody of the property. (4 Fletcher on Corporations, 3519.)
James S. Byers, for Respondents.
The makers of a note may show by parol that the note sued upon was not signed as a completed contract, but subject to the condition that the note was to become binding only when signed by another or all of a number of designated persons, and that none should be bound unless all those whom it was agreed should sign the note did in fact sign it. (Vincent v. Russell, 101 Ore. 672, 201 P. 433, 20 A. L. R. 417, and notes.)
If the delivery of the note was conditional, the instrument does not become a binding obligation until the condition on which its delivery depends has been fulfilled. (3 R. C. L., sec. 43; Carter v. Moultan, 51 Kan. 9, 37 Am. St. 259, 32 P. 633, 20 L. R. A. 309; C. S., sec. 5883; 20 A. L. R. 440, 442; Joyce on Defenses to Commercial Paper, secs. 312-316, 489, 490; 8 C. J. 205.)
It is a good defense where the note was not to take effect until other signatures were procured. (Joyce on Defenses to Commercial Paper, sec. 315.)
The mere giving of erroneous instructions is not reversible error where the verdict is clearly right on the merits. (Brickwood, Sackett's Instructions, sec. 190; Hughes on Instructions, sec. 243; Shawnee Nat. Bank v. Wootten and Potts, 24 Okla. 425, 103 P. 714, 38 Cyc. 1813.)
The facts in this case are substantially as follows: On August 12, 1919, the Thousand Springs Land & Irrigation Company, an Idaho corporation, herein referred to as the company executed and delivered to the State Bank of Idaho Falls, hereinafter named as the State Bank, a promissory note in the principal sum of $ 8,500, dated August 12, 1919. About the same time, the note was indorsed by respondents W. T. Pettinger, C. W. Mulhall, J. I. Hubbel, Dow Williams and Armour & Douglass, copartners, by T. M. Douglass, Jr., and by W. H. Clyne, these parties being some of the stockholders of the company. In December, 1919, the company, by reason of the nonpayment of the state corporation license fee, forfeited its right to do business, and did not procure a reinstatement. About May 12, 1920, a note for the principal sum of $ 9,000 bearing on its face the statement that it was given "in renewal of note $ 8,500.00 and int. dated August 12, 1919," was signed in the company's name by A. T. Shane and V....
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