Plymouth County Bank v. Gilman

• Decision Date: 18 June 1892
• Citation: Plymouth County Bank v. Gilman, 3 S.D. 170, 52 N.W. 869 (S.D. 1892)
• Parties: Plymouth County Bank v. Gilman. [a1]
• Court: South Dakota Supreme Court

52 N.W. 869

3 S.D. 170

Plymouth County Bank v. Gilman. ^[a1]

Supreme Court of South Dakota

June 18, 1892

Syllabus by the Court.

1. Where a note and mortgage were transferred to an incorporated bank as collateral security and for collection, evidence of the statement of the cashier of such bank, made while the note and mortgage were still in the bank uncollected, to inquiries as to whether or not they had been collected, that the failure to collect the note and mortgage was the "fault" and "neglect" of the bank, was not admissible, such statement not being the statement of any fact in the line of his duty as such cashier, nor within the scope of his authority as an officer of the bank, but the mere expression of his opinion as to the conduct of the bank.

2. The principal question in issue in this case was as to whether or not the bank had been guilty of negligence in collecting the note and mortgage. Upon such an issue, evidence of the statement of the cashier of the bank that the failure to collect the note and mortgage was the "fault" and "neglect" of the bank was important, and this court cannot say that the admission of this evidence did not unjustly prejudice the plaintiff's case.

3. A question decided by the supreme court on a former appeal becomes the law of the case in all its stages, and will not ordinarily be reversed upon a second appeal of the same case when the facts are substantially the same.

4. The same rule applies where the former decision was made by the late territorial supreme court, this court being the successor of that court.

5. A record on a former appeal in the same action may be looked into for the purpose of ascertaining what facts and questions were before the court, so as to see to the proper application of the rule that such decision is the law of the case.

Appeal from circuit court, Minnehaha county.

Action by the Plymouth County Bank against Frazier Gilman to recover on a promissory note. From a judgment for defendant plaintiff appeals. Reversed.

Winsor & Kittredge, for appellant. Palmer & Rogde, for respondent.

CORSON J.

Appeal by plaintiff from a judgment in favor of defendant for $530 and interest on a counterclaim. This was an action by the plaintiff to recover of the defendant $412, and interest, on a certain promissory note, given by the defendant to the plaintiff, bearing date January 18, 1875. The defendant answered, admitting the execution and nonpayment of the note and pleaded by way of counterclaim that at the time he executed said note he transferred to the appellant, which will be hereafter designated as the bank, six promissory notes, amounting to $1,150, and a mortgage securing the same executed by one Mason as collateral security for the payment of his said notes; and also with the agreement that said bank should collect said Mason notes and mortgage for a commission of 10 per cent. and the costs of collection. He further alleges that at the time he so transferred said Mason notes and mortgage to the bank the mortgaged property was of greater value than the face of the said notes; that he had not received anything on account of said notes and mortgage that through the negligence of said bank said Mason notes were not collected; that the maker had become insolvent, and the mortgaged property had become worthless; and that by reason of said negligence the defendant has been damaged to the amount of the face value of said notes and interest; and prayed for a judgment against the bank for the amount of said notes and interest, less the amount due on his own note to the bank. The bank, in reply to said counterclaim, denied all negligence, and alleged affirmatively that it sent the said Mason notes and mortgage to a reputable firm of attorneys for collection, and instructed them to proceed and collect the same; that said attorneys did proceed to foreclose said mortgage, but failed to realize from such foreclosure and sale of the mortgaged property a sum more than sufficient to pay the expenses, costs, and charges of such sale. It further alleged that, if there was any negligence in enforcing the collection of said notes and mortgage, it was the negligence of the attorneys employed by it, and not of the bank, and that it was not, therefore, responsible for such negligence, as it had performed its duty by using due care in the selection of competent and reputable attorneys to conduct the foreclosure proceedings. On the trial, the defendant gave evidence tending to prove the facts substantially as alleged in his answer, subject to certain objections and exceptions that will be hereafter noticed. The plaintiff also gave evidence tending to prove the facts alleged in its reply, which were substantially as follows: That in the latter part of June, 1875, the said Mason notes not being paid, it sent them to a reputable firm of attorneys, with instructions to foreclose the mortgage given to secure them; that an action of foreclosure was in a short time thereafter commenced, and a judgment of foreclosure rendered in October, 1876, but no sale of the mortgaged premises was made thereunder; that in 1880 the said attorneys, deeming the service made, upon which the judgment of foreclosure was obtained, insufficient, they caused said judgment to be vacated and set aside, and a new service of process made by publication, and thereafter entered a new judgment, upon which a sale of the mortgaged premises was made in the fall of 1881, and that at such sale the property was sold for a sum about sufficient to pay the expenses of sale. It also proved that the firm of attorneys retained by it was a reputable firm, and this fact was not controverted. Numerous errors are assigned, which may be condensed and considered under four heads: (1) Error of the court in admitting evidence of the defendant as to the statements made to him by the cashier of the bank in the spring of 1875; (2) error of the court in admitting evidence of the value of the mortgaged property during the six months after the Mason notes and mortgage came into the possession of the plaintiff; (3) error of the court in refusing to direct a verdict for the plaintiff; and (4) error of the court in permitting counsel for the defendant to open and close the case to the jury.

1. The defendant testified that in January, 1875, after obtaining the loan from the bank, evidenced by his note of $412, and transferring the Mason notes and mortgage to the bank, he left for the east, where he remained until the spring of 1875; and that soon after his return he called at the bank and had a conversation with the cashier, from whom he obtained the money. He was then asked the following question: "State what talk you had concerning these [Mason] notes at that time." To which he answered: "I went in and asked him how much he collected; if he got all the notes. He said, 'No,' and I was surprised, and found fault with him." Plaintiff's counsel objected to any evidence as to the statements of the cashier, on the ground that such statements were incompetent, irrelevant, and immaterial, and upon the further ground that an...