Security State Bank of Melrose, Minn., v. First Nat. Bank
| Decision Date | 28 February 1927 |
| Docket Number | 6008. |
| Parties | SECURITY STATE BANK OF MELROSE, MINN., v. FIRST NAT. BANK OF ISMAY. |
| Court | Montana Supreme Court |
Rehearing Denied March 18, 1927.
Appeal from District Court, Custer County; S.D. McKinnon, Judge.
Action by the Security State Bank of Melrose, Minn., against the First National Bank of Ismay. From a judgment of nonsuit plaintiff appeals. Affirmed.
George M. Farr, of Miles City, and Clyde McLemore, of Baker, for appellant.
George J. Murphy, of Ismay, for respondent.
Appeal from a judgment of nonsuit in an action for the recovery of proceeds from the sale of mortgaged cattle.
The facts are undisputed and are substantially as follows: Two brothers, Elmer and A. C. Bair, reside in the vicinity of Ismay, in Custer county, and originally did all their banking business with defendant bank. In 1914, they borrowed from this bank and gave to it a chattel mortgage on certain cattle. In 1916, the mortgage note remaining unpaid. they sought a further loan for the purpose of purchasing additional cattle, but were refused. Elmer Bair then secured a loan from Himsl, cashier of the First State Bank of Plevna an agent for the plaintiff bank, and executed a chattel mortgage on the Bair cattle to plaintiff bank, which mortgage was filed in Custer county. Thereafter Bair Bros. did most of their banking business with the Plevna bank, but continued to carry an account with defendant bank and paid their mortgage debt to it. In 1918 Elmer Bair borrowed $460 from the defendant bank, and, being asked for security, told Ayers cashier, with whom he had always done business, that he had no security to give. In 1919 plaintiff's mortgage was renewed and the renewal filed in Custer county. In the winter of 1919-20, with the consent of the mortgagee, Bair shipped the cattle to South Dakota, and in the fall of 1920 shipped 21 head thereof to Iowa, consigned to Clay, Robinson & Co., livestock commission merchants, without giving the consignee any direction as to the disposition of the proceeds of the sale, but "guessed" that, as the brand on the cattle was recorded, it would know where to send the money. The sale netted $808.65, which amount the consignee remitted to defendant bank, with instruction to place the same to the credit of Elmer and A. C. Bair, in whose joint names the brand was recorded. This remittance was received September 3d. Ayers, cashier, credited the amount to the account of Elmer Bair, in which there was then a balance and against which both brothers had the right to check. He mailed a duplicate slip to Bair, and, after the lapse of 20 days, during which time he heard nothing from Bair, applied $445.55 of the remittance, with the former balance in the account, to the satisfaction of the Bair past-due note, marked the note "Paid," and sent it to Bair. On receipt of the canceled note, Bair called at the bank, and advised Ayers that the remittance should have gone to Himsl, and notified Himsl of what had been done. In December Himsl made demand upon Ayers, as cashier, for the full amount of the remittance, which demand was refused to the extent of the $445.55 applied on the Bair note. This action was then instituted and issue joined.
On the trial, at the close of plaintiff's testimony, the court held that plaintiff had "failed to prove a sufficient case for the jury." and ordered the entry of a judgment of nonsuit. From the judgment so entered plaintiff has appealed. The sole question presented is as to the sufficiency of the evidence to require its submission to the jury.
1. The complaint alleged that the cattle were sold without the consent of the mortgagee. Here there was a clear failure of proof, as Himsl testified that he gave his consent and it appears from the record that such consent was without an agreement that the proceeds be applied on the mortgage debt. Himsl testified that he "presumed" the proceeds would be remitted to him. For the purpose of this opinion we will assume that this testimony would have been sufficient to warrant a jury in finding that such was the intention of the parties.
The plaintiff asserts that the defendant had knowledge of the mortgage; but it was not a creditor to whom the filing of the mortgage imported notice within the contemplation of section 8279, Revised Codes 1921, as it was not seeking to enforce its claim against the mortgaged property. Isbell v. Slette, 52 Mont. 156, 155 P. 503. However, as the case was taken from the jury, again we will assume that the jury would have been warranted in finding from the evidence that the defendant had actual knowledge of the mortgage. This knowledge would not alone be sufficient to render the defendant liable; the plaintiff was required to show that the defendant had knowledge of the origin of the funds deposited.
2. It is well settled that when money is deposited in a bank to the credit of one of its debtors, without an express agreement to the contrary...
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