Putnam v. Chase

• Citation: 212 P. 365,106 Or. 440
• Parties: PUTNAM v. CHASE.
• Decision Date: 06 February 1923
• Court: Oregon Supreme Court

212 P. 365

106 Or. 440

PUTNAM v. CHASE.

Supreme Court of Oregon

February 6, 1923

In Banc.

Appeal from Circuit Court, Douglas County; J. W. Hamilton, Judge.

Action by Benjamin B. Putnam, substituted for Claude P. Hay, as Bank Commissioner of the state of Washington, acting for and on behalf of the First International Bank of South Bend, an insolvent corporation, against E. C. Chase. From an order granting new trial after judgment on verdict for defendant defendant appeals. Affirmed.

Hay, as bank commissioner of the state of Washington, brought this action against Chase to recover upon a promissory note for $3,700 executed by Chase on March 28, 1911, in favor of the First International Bank of South Bend, Wash., and bearing interest at the rate of 8 per cent. per annum. Benjamin B Putnam purchased this claim and succeeded Hay as plaintiff here.

The complaint alleges the plaintiff Hay's official character and states that as such bank commissioner he had succeeded to the title, and was the owner and holder of all the notes and other securities belonging to said bank, and that said bank became insolvent and failed in business on July 19, 1915. It is further alleged:

"That under and by virtue of the laws of the state of Washington it is the duty of the bank commissioner of said state to take possession of all of the assets of insolvent banks in said state and to liquidate the same. That under and by virtue of said laws the plaintiff is in possession of the assets of said First International Bank of South Bend including the note hereinabove set forth. That on the 19th day of July, 1915, the duties of the office of bank commissioner were performed by the bank examiner in said state; that since that date the office of bank commissioner has been created by an act of the Legislature of the state of Washington, and the duties theretofore performed by the bank examiner devolved upon the bank commissioner by virtue of said act."

The defendant answered, admitting the execution of the note, but denying every other allegation of the complaint excepting the corporate existence of the First International Bank of South Bend. For an affirmative defense the following was pleaded:

"That at Portland, state of Oregon, on the 28th day of March 1911, at the instance and request of the First International Bank of South Bend, Wash., for its accommodation, and for the purpose of increasing its apparent assets, and tiding over financial difficulties, and making a satisfactory showing to the bank examiner, and without any consideration whatsoever therefor, and under the promise made at the time by said bank to him that he would not be bound or held therefor, nor assume any liability therefor whatsoever by reason thereof, the defendant made, executed, and delivered to said bank the promissory note described in plaintiff's complaint, and not otherwise. That defendant never received any consideration of any kind or nature whatsoever for said note, and the same was and is null and void. That plaintiff holds said note, if at all, as the legal representative of said bank, and as trustee for the stockholders thereof, and not otherwise, and in such capacity he sues upon the same."

To this the plaintiff replied as follows:

"Comes now the plaintiff above named, and for his reply to the separate and further answer and affirmative defense of the defendant to the plaintiff's cause of action, admits that the plaintiff holds the note set out in plaintiff's complaint in his capacity as bank commissioner of the state of Washington, but denies that plaintiff holds same as trustee for the stockholders or otherwise than as stated in plaintiff's complaint and denies each and every allegation in said further and separate answer and affirmative defense."

Thereafter the cause was tried to a jury, which found for the defendant, and on the same day a judgment was rendered on said verdict. The plaintiff thereupon filed a motion to set aside the verdict and judgment, which was sustained by the court, the reason for the ruling thereon being set forth in an opinion from which the following is an excerpt:

"The execution of the note is admitted. The defense pleaded is that the defendant was an accommodation maker, and that the note was executed at the request of an officer of the bank in order that it might make the assets of his bank appear better and more valuable, and alleges that therefore the note was without consideration. I am inclined to the opinion that the defense alleging the facts that a note was given merely to make the assets of the bank appear better is not available where creditors of the bank would be adversely affected by such defense. It is a question in pleading whether this fact should...