Rankin v. Blaine County Bank

• Decision Date: 21 January 1908
• Citation: 93 P. 536,20 Okla. 68,1908 OK 7
• Parties: RANKIN v. BLAINE COUNTY BANK.
• Court: Oklahoma Supreme Court

93 P. 536

20 Okla. 68, 1908 OK 7

RANKIN v. BLAINE COUNTY BANK.

Supreme Court of Oklahoma

January 21, 1908

Syllabus by the Court.

A principal may maintain an action on a written contract made by his agent in his own name, and evidence may properly be admitted to show that the principal was the real party in interest, notwithstanding the rule of law that an agreement reduced to writing may not be contradicted or varied by parol evidence.

[Ed Note.-For cases in point, see Cent. Dig. vol. 20, Evidence, § 2112.]

Where a bank borrows money from another bank, and authorizes its cashier in his own name to pledge promissory notes taken in the name of the cashier, but belonging to the borrowing bank as security for the loan, and the loaning bank fails, having on deposit money belonging to the borrowing bank in excess of the amount borrowed on the pledged promissory notes, the borrowing bank may institute suit in its own name against the receiver of the failing bank for the recovery of the promissory notes pledged, and in such suit, upon proper allegation and proof, is entitled to the return of the notes and to have the sum borrowed on them set off against the amount on deposit.

Error from District Court, Logan County; J. L. Pancoast, Judge.

Action by the Blaine County Bank against George C. Rankin, receiver of the Capitol National Bank of Guthrie. Judgment for plaintiff, and defendant brings error. Affirmed.

Flynn & Ames, for plaintiff in error.

Dale & Bierer, for defendant in error.

KANE J.

This is an action brought by the Blaine County Bank, a corporation against J. A. Willoughby, receiver of the Capitol National Bank of Guthrie, Okl., for the return of certain promissory notes deposited by the Blaine County Bank with the Capitol National Bank as collateral, to secure loans made by the Capitol National Bank to the Blaine County Bank. Since the cause was filed in this court, George C. Rankin, as receiver, was substituted as plaintiff in error, in lieu of Mr. Willoughby.

The plaintiff in error states the facts in his petition below, as follows: "That during the time said Capitol National Bank was engaged in the banking business said plaintiff deposited with said bank, at various times, sums of money, and that at the date said Capitol National Bank failed and closed its doors it had on deposit in said bank, to the credit of plaintiff, the sum of $11,914.89, and on said date also had with said Capitol National Bank the following described notes, to wit: [Here follows description of notes.] Plaintiff states that said notes were placed with the Capitol National Bank under an arrangement and agreement with one Charles E. Billingsley, at that time president of said bank, as security for money advanced to and placed by the Capitol National Bank to the credit of plaintiff herein; that at the time, to wit, April 4, 1904, when said Capitol National Bank ceased doing business, said above-described notes were held by the said Capitol National Bank to secure an advancement made by said last-named bank to the plaintiff bank in the sum of $3,224.25, which sum of money had theretofore been so advanced and placed to the credit of said plaintiff bank upon the books of the Capitol National Bank, and which said sum of money made and constituted a part of the $11,914.89, which the plaintiff bank had on deposit with said Capitol National Bank at the time said Capitol National Bank ceased doing business; and at the time said notes above described were placed in said Capitol National Bank it was agreed by and between the Blaine County Bank, plaintiff herein, and Charles E. Billingsley, as president of the Capitol National Bank, that said notes should be returned to the plaintiff herein as the same became due and payable, and when so returned charged to the account of plaintiff herein upon the books of said Capitol National Bank. Plaintiff alleges that when said Capital National Bank failed, and the defendant receiver had been appointed and qualified to take charge of the assets of said Capitol National Bank, plaintiff demanded of said receiver a return of said notes so left in said Capitol National Bank, as aforesaid, and that the amount thereof, to wit, the sum of $3,224.25, be charged against the deposit, which said plaintiff had in said Capitol National Bank at the time it failed and ceased doing business, which demand has been by the receiver refused, and said receiver has failed to comply with the demand of plaintiff, and is threatening to, and will, if not restrained, attempt to collect the said notes from the makers thereof, greatly to the injury and detriment of plaintiff."

The following, taken from the statement of defendant in error, in its brief, fairly states the details of the arrangement between the banks, as shown by the evidence: "These notes had been taken by the Blaine County Bank in the name of Ed. S. Wheelock, who was then acting as the cashier of the Blaine County Bank, and had been sent to the Capitol National Bank under a certain arrangement and agreement between the officers of the Blaine County Bank and the Capitol National Bank, whereby the Capitol National Bank was to advance, for the benefit of the Blaine County Bank, the face value of the notes at an agreed rate of interest-at 8 per cent. per annum-during the time such advancements were to run. Under this arrangement the Capitol National Bank advanced the money to Ed. S. Wheelock. Ed. S. Wheelock immediately transferred it to the Blaine County Bank."

The following is a further statement of the facts in relation to these notes taken from the brief of plaintiff in error: "Five of the notes in question are payable to the order of Ed. S. Wheelock at the Blaine County Bank, and are indorsed 'payment guaranteed, Ed. S. Wheelock.' The remaining four notes are payable to the order of Ed. S. Wheelock, cash, and are likewise indorsed 'payment guaranteed, Ed. S. Wheelock."'

These notes, it seems from the evidence, represented loans made by the Blaine County Bank to some of its customers out of the funds of the bank. The plaintiff in error, defendant below, tried his case on the theory that, at the time of the suspension of the Capitol National Bank, the Blaine County Bank had no right, title, or interest in and to the notes; that the notes were then, and are now, the property of the Capitol National Bank; that the Capitol National Bank purchased them from Ed. S. Wheelock, and they came into the hands of the receiver as part of the assets of the bank. The court submitted the question of the ownership of the notes to the jury, and the jury found as follows: "We, the jury in the above-entitled cause, do, upon our oaths, find that the notes in controversy in this cause were placed in the Capitol National Bank as security for loans and advancements to the plaintiff." Thereupon the court rendered judgment in favor of the plaintiff, from which judgment the defendant appealed to this court.

It is practically conceded by counsel for both parties, if evidence was properly admissible for the purpose of proving that the Blaine County Bank was the owner of the paper and pledged it to the Capitol National Bank as collateral for a loan made by the Capitol National Bank to the Blaine County Bank, that said Blaine County Bank is entitled to the relief it prays for in its petition. But counsel for plaintiff in error, to avoid this conclusion, contends that: "(1) The court erred in refusing to receive evidence as to the general custom of banks in rediscounting negotiable paper. (2) The court erred in submitting special interrogatories to the jury, because such interrogatories called for conclusions from the jury and not for facts. (3) The court erred in rendering judgment in favor of the defendant in error, because (a) the promissory notes in question and the indorsements thereon show that such notes were the property of Ed. S. Wheelock at the time of their transfer to the Capitol National Bank, and the court had no power to take into consideration parol evidence for the purpose of changing, varying or contradicting such instruments; (b) such judgment was not based upon any general verdict of the jury."

There seems to be no serious contention as to the agreement entered into between the two banks. Wheelock and Billingsley substantially agree in their statement of facts, no matter how much they may differ from each...