Shawnee State Bank v. Vansyckle
| Decision Date | 19 July 1922 |
| Docket Number | 22052 |
| Citation | 189 N.W. 607,109 Neb. 86 |
| Parties | SHAWNEE STATE BANK, APPELLEE, v. H. E. VANSYCKLE, APPELLANT |
| Court | Nebraska Supreme Court |
APPEAL from the district court for Douglas county: JAMES M FITZGERALD, JUDGE. Reversed.
REVERSED.
North & Donovan, for appellant.
Stout Rose, Wells & Martin, contra.
Heard before LETTON, DEAN and DAY, JJ., CLEMENTS (E. J.), and WELCH, District Judges.
This is an action brought by appellee on a promissory note for the sum of $ 12,500, dated May 19, 1919, due one year from date, with interest at 8 per cent. from its date, executed by the appellant, H. E. Vansyckle, in favor of the Missouri Valley Cattle Loan Company. The plaintiff alleged that before maturity of said note the Missouri Valley Cattle Loan Company, for a valuable consideration paid by plaintiff in the regular course of business, sold, indorsed, transferred and delivered it to plaintiff. The defendant, Vansyckle, denied that the Missouri Valley Cattle Loan Company sold, indorsed, transferred and delivered said note to plaintiff; denied that plaintiff was the owner and holder for value of said note; and alleged that there was no consideration for said note. He also alleged facts constituting fraud in the inception of said note. Plaintiff replied by general denial. The plaintiff at the commencement of the trial admitted to the jury that the defendant, Vansyckle, has a good defense to said note, on the grounds of fraud and lack of consideration, against the payee of the note. Plaintiff then proceeded to introduce evidence to show that it purchased said note in good faith, for a valuable consideration, before maturity, without notice of any infirmity in the note. Upon the close of the trial the court, on motion therefor by plaintiff, instructed the jury to find for the plaintiff and against the defendant, Vansyckle, and also his codefendant, Missouri Valley Cattle Loan Company, for the full amount of the note with interest; whereupon the jury returned such a verdict. From the judgment rendered on this verdict the defendant, Vansyckle, has appealed.
The question now to be determined is whether or not the purchase of said note, in good faith, for a valuable consideration, by plaintiff, and its indorsement and delivery before it became due by the payee thereof to plaintiff, was established by the evidence to such an extent that there was nothing for the jury to pass upon. If each and all of said facts were not so established, then such of them as were not so established were for the jury to determine, and not the court, and there was error in not submitting the same to the jury.
To prove that it was an innocent holder of the note for value, in good faith, before the same became due, plaintiff called as a witness F. P. Elmore, its cashier. He testified that he had general conduct of the affairs of plaintiff, and had been making the loans of the bank and purchasing notes for the bank since June 1, 1919; that nobody else during that time made loans for or purchased notes for the plaintiff. He testified that during the fall and summer of 1919 he purchased for plaintiff promissory notes given to the Missouri Valley Cattle Loan Company to the amount of about $ 68,000, and that included therein was the note in suit; that he purchased these notes, not direct, but from one H. W. Huttig, Muscatine, Iowa; that said Huttig was a note broker, who was also engaged in the sash and door business, and that he had known Huttig for 10 or 15 years. Said Elmore also testified that in the last of July or first of August, in plaintiff's office in Topeka, he first had a conference with said Huttig about the purchase of these Missouri Valley Cattle Loan Company notes; that he did not purchase any notes from him at that time, but made the first purchase in August. He does not testify as to what took place at that conference. Said Elmore further testified that he purchased the note in suit August 26, 1919, for Shawnee State Bank, through said H. W. Huttig, the note being sent direct from Missouri Valley Cattle Loan Company, and that, when he received it, it had that company's indorsement on the back; that the bank paid for the note $ 12,500 and accrued interest figured at the rate called for in the note. Elmore further testified that at the time he purchased the note he did not know the defendant, Vansyckle, had never heard of him, nor had had any dealings with the Missouri Valley Cattle Loan Company; that before he purchased he wrote a bank as to the responsibility of Vansyckle, and that he had no information about the details of the organization of the Missouri Valley Cattle Loan Company, did not know the consideration for the note, and did not have notice or knowledge when he purchased it that Vansyckle claimed a defense to it. On cross-examination said Elmore testified that in August or September, 1919, he did not know any of the officers of Missouri Valley Cattle Loan Company; that before he bought the note he had never seen the signature of V. W. Gittings (the indorsement of said note set forth in the petition of plaintiff purports to have been made by V. W. Gittings, secretary, for Missouri Valley Cattle Loan Company). He also testified that he did not know the signature of the defendant, Vansyckle, at the time he purchased the note, made no inquiry as to what the note was given for, that Huttig told him he was getting 5 per cent. commission for the sale of these notes, and that he received a letter from Huttig with reference to the Vansyckle and other notes. This letter was introduced in evidence, and is dated August 16, and contains the following:
And after listing several other notes, amounting in the aggregate, with said Vansyckle note, to $ 31,592.75, said letter proceeds:
Previous to this time said Elmore had received a letter from said Huttig, which is in evidence, bearing date July 3, but which he testifies as July 30. This letter is as follows:
Elmore also testified that before the purchase of the Vansyckle note plaintiff had been furnished with a financial statement of Missouri Valley Cattle Loan Company. This statement was introduced in evidence. The witness Elmore testified that he thought 5 per cent. a very good commission, not too large on unknown paper; that what he would call known paper was such as Swift's and Armour's and standard paper like that; that he did not think on unknown paper this was an extra large commission. The statement of the Missouri Valley Cattle Loan Company introduced in evidence showed among its resources the following items: "Commission, $ 117,525;" "paper on hand, $ 508,591.22;" "paper past due, $ 62,251.57;" "paper redeemed awaiting maturity, $ 17,055.61;" "loans sold on approval, $ 52,656.45;" "notes receivable, $ 269,387.48;" "rediscounts pending, $ 89,145.24;" "suspense, $ 8,554.16." Said statement showed among its liabilities the items, "paper paid and not redeemed, $ 43,593.68;" "escrow, $ 276,780.94." The court in the trial, on objection by plaintiff, would not permit plaintiff's cashier to testify what his understanding was as to said items, "commission, $ 117,525," and "suspense, "$ 8,554.16." To the ordinary layman these items without explanation are unintelligible. He would also think that the item, "paper on hand, $ 508,591.22," would include the items, "paper past due," "paper redeemed awaiting maturity," "loans sold on approval," "notes receivable," and "rediscounts pending," above set forth. Without any explanation as to those items, it would appear as if there was a duplication of the assets in said statement. It is also unintelligible how property in "escrow" can become a liability, unless it be by a conversion of the property in escrow. And such would be the interpretation naturally to be placed upon such statement. Here was in the hands of the plaintiff before it purchased the note in suit notice that the payee of the note had property in escrow which was a liability against payee. Such property, on account of the nature of the business of the payee, one would naturally infer would be notes in escrow. Plaintiff purchased said note August 26, 1919, paying therefor its face value with accrued interest, and crediting the said note broker on his indebtedness to plaintiff 5 per cent. of the face of the note on account of said broker's commission for selling the same. And at the same time it purchased a number of other notes in favor of the Missouri Valley...
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