St. Louis Nat. Bank v. Flanagan

• Decision Date: 18 June 1895
• Citation: 31 S.W. 773,129 Mo. 178
• Parties: ST. LOUIS NAT. BANK v. FLANAGAN.
• Court: Missouri Supreme Court

31 S.W. 773

129 Mo. 178

ST. LOUIS NAT. BANK v. FLANAGAN.

Supreme Court of Missouri, Division No. 2.

June 18, 1895.

ACTION ON NOTE — LIABILITY OF SURETY — UNAUTHORIZED DISCOUNT — EVIDENCE — PLEADING AND PROOF — VARIANCE — DEPOSITION — IMPROPER ADMISSION — HARMLESS ERROR.

1. In an action by a bank against the surety on a note dated December 14, 1892, and payable in 30 days, plaintiff's president testified that when the note was first offered him by the maker he refused to discount it, because the maker had borrowed enough from the bank, and that subsequently, on January 9th, believing that the maker's indebtedness to the bank had been reduced, he discounted the note, and placed the proceeds to the maker's credit, and that the note was then brought to him for discount by the cashier of the bank, and that on that day the maker made no request of the witness to have it discounted. On the 8th of January the president and cashier learned that the maker had defrauded the bank to the extent of $24,000. After the refusal to discount the note, the maker had placed it in the custody of the cashier, from which it was not removed till the day it was discounted. The cashier testified that on the 8th the maker told him he might have the note discounted, if his line had been reduced enough to stand it, but there was evidence that on that day the maker told the cashier not to present it for discount. The proceeds of the note were offset against an overdraft of the maker. Held sufficient to warrant a finding that the cashier, on January 9th, had no authority from the maker to present the note for discount.

2. Where a depositor takes to a bank, for discount, his note, on which there is a surety, and, on the refusal of the bank officials to discount the note, he leaves it in the custody of the cashier, and the latter, after learning of the maker's insolvency, and without request from him, procures the note to be discounted by the bank, and its proceeds credited against the maker's overdraft, the surety cannot be held.

3. In an action by the bank against the surety on the note, it was proper to allow the surety to testify to the purpose for which the maker stated he wanted his signature to the note.

4. It was proper to refuse to allow the president of the bank to testify as to whether he had spoken to the maker regarding the discount after it was made, the purpose of the offer not appearing.

5. Evidence of what the maker said to the cashier regarding the consideration moving between him and the surety was properly excluded.

6. Evidence of what the cashier said to the maker or the maker to the cashier, after the note was discounted, regarding its discount, was properly excluded.

7. Where, in an action against a surety on a note, the petition is in the usual form, and defendant set up that plaintiff bank was not a holder for value, but wrongfully appropriated the note and discounted it, and placed the proceeds to the maker's credit, for the purpose of offsetting the maker's overdraft, and the reply denied all the allegations of the answer, except as to the overdraft, and averred that plaintiff discounted the note at the maker's request, and placed the proceeds to the credit of his account, it was proper to exclude proof that the unauthorized discount of the note by plaintiff's cashier, in whose custody it was left by the maker, was ratified by the maker.

8. Error in admitting the deposition of a witness is cured by his being subsequently recalled, and giving substantially the same testimony.

9. A judgment will not be reversed because a deposition was improperly admitted, where the witnesses for the objecting party corroborate the evidence contained in the deposition.

Appeal from St. Louis circuit court; Leroy B. Valliant, Judge.

Action by the St. Louis National Bank against Francis G. Flanagan on a promissory note. Judgment was rendered for defendant, and plaintiff appeals. Affirmed.

This is an action on the following note: "$6,000.00. St. Louis, December 14, 1892. Thirty days after date, for value received, we promise to pay to the order of the St. Louis National Bank six thousand dollars, payable at St. Louis National Bank, with interest from maturity at the rate of eight per cent. per annum. A. K. Florida. F. G. Flanagan." The petition was in the usual form. The answer of respondent, Flanagan, set up as a defense that he signed the note as maker, with Florida, for the accommodation, purely, of Florida, and without receiving any value or consideration whatever, and that plaintiff knew this when it took the note; that Florida never negotiated or delivered the note, for value, to plaintiff, and, if he ever delivered it at all, plaintiff gave no value for it; that plaintiff did not acquire the note in good faith, or in the ordinary course of business, but wrongfully appropriated the same, and pretended to discount it, and place the proceeds of said discount to the credit of Florida, for the purpose of paying an existing indebtedness of Florida to the bank, caused by overdrafts, to the amount of $7,789.53. The reply denied all the allegations of the answer, but admitted that Florida was indebted to the bank upon his account current, by overdrafts, to the amount of $7,789.53, and averred that on the 9th of January, 1893, Florida requested plaintiff to discount the note in suit; that this was done, and the proceeds, $5,989.34, were placed to Florida's credit in his account current; and that plaintiff applied the same towards payment of his said overdrafts.

At the trial the plaintiff offered the note in evidence, and rested. The defendant then offered to read the deposition of Lewis C. Nelson, taken by a notary public, August 23, 1893, at the instance and on behalf of defendant, as the declaration of the plaintiff. Plaintiff objected on the ground that the said Nelson was in court. This was conceded to be the fact. But the court overruled the objection, and plaintiff excepted. Examined by Mr. Grover, for defendant. The deposition was, in substance, as follows: "Am president of the plaintiff bank. Florida kept an account with plaintiff bank, — a pretty extensive account. We often discounted paper for him. His account was often overdrawn. Q. Now, I will ask you when you first saw this note that your bank sued on in this case. (Note shown to witness.) A. Well, I cannot state exactly what time I first saw it. It appears to have been discounted January 9th. It has my official stamp upon it, January 9, 1893. Q. That don't answer the question. A. Well, I don't know when I did see it first. I might have seen it first December 14th. You asked me a question that it would be preposterous for me to answer. Q. Can you state when it first came before the bank, or before you, for discount? A. Well, it was presented to me by Mr. Burr some time before it was discounted, — a few days before, I think. Q. What do you mean by `a few days'? A. I mean a few days. Q. Three? A. It might have been three, or ten. I should call either a few days. Q. Well, was it entered on your book when it was first presented for discount by Mr. Burr? A. No, sir; it wasn't. Q. Was it presented for discount to you by Mr. Burr, or did Florida hand it to you, the first time you saw it was offered for discount? A. I am not positive. It might have been presented by both. I know it was presented by one or both. Q. Well, what was done with it when it was first presented, — the first time? A. I declined to take it. Q. On what grounds? A. Well, I said Mr. Florida had all the money from the bank that he was entitled to at that time. He had borrowed all that I thought he ought to have. Q. Was he in good credit at the time in your bank? A. Yes, sir; fairly so. So much so, I would have taken that note with Flanagan's indorsement on it. Q. Now, Mr. Nelson, Flanagan's name was on it. Why didn't you take it? A. I have stated before that I thought he had all the money he was entitled to. Q. Flanagan's name, then, cut no figure in it when it was first presented? A. I shouldn't have taken it, in any event, unless Mr. Flanagan's name had been there. Q. Mr. Flanagan's name was not on all the paper Mr. Florida had in your bank at that time, was it? A. No, sir; somebody else's name was, I suppose, equally as good for what they represented. Q. When that note was first presented to you, you didn't consider Mr. Florida's single name as good for the amount? A. Well, there are very few single names that `go' in our bank. Q. You didn't consider Florida's single name at the time that note was first presented to you for discount, — you didn't consider it as good? A. Well, it might have been good. I would not have taken it. Q. You would not? A. No, sir; I wouldn't have taken it. Q. Do you know what amount of discount you carried for Florida at that time? A. I don't remember just now. Q. 1 mean at the time this was first presented for discount. A. I don't remember just now. Q. Do you know whether those discounts — any of them — were paid off between the time this note was first presented and the time of the discount? A. My impression is, they were. Q. You don't know? A. I think they were more than the amount of the note paid off from the time it was presented to the time it was presented and accepted. When it was first presented, I considered his discount line amply full, considering the condition of the supply of money I had on hand at the time; and when it was presented the second time, I think, his line had been materially reduced during the few days that had elapsed afterwards. Q. Now, prior to the discounting of this note, hadn't you had an interview at your residence at Normandy with Florida, at which Hammett was present, about his financial situation, and about the money that he owed your bank? A. Prior to the discount of that? Q. Yes, sir; prior to the 9th of January, when that note was discounted. A. I believe I had. Q. It was on Sunday afternoon, wasn't it? A. Yes, sir. Q. The 8th...