State Bank of Willow River v. Pangerl

• Decision Date: 14 December 1917
• Docket Number: No. 20576.,20576.
• Court: Minnesota Supreme Court
• Parties: STATE BANK OF WILLOW RIVER v. PANGERL et al.

139 Minn. 19

165 N.W. 479

STATE BANK OF WILLOW RIVER

v.PANGERL et al.

No. 20576.

Supreme Court of Minnesota.

Dec. 14, 1917.

Appeal from District Court, Pine County; J. C. Nethaway, Judge.

Action by the State Bank of Willow River against Paul Pangerl and wife and E. C. Townsend. Judgment for plaintiff, and defendant Townsend appeals. Reversed.

Syllabus by the Court

In an action on a promissory note made by the defendant makers at the request of the plaintiff bank to the defendant payee without consideration passing from him to them, and indorsed by the defendant payee to the plaintiff at its request and without consideration, the evidence is held to show as a matter of law that the indorsement was for the accommodation of the plaintiff and it cannot recover thereon.

The rule that upon the transfer of a promissory note the effect of the payee's indorsement cannot be varied by parol does not prevent the showing of want of consideration or that paper is accommodation. Wm. H. Lamson, of St. Paul, for appellant.

Ottocar Sobotka, of Pine City, for respondent.

DIBELL, C.

This is an action by the State Bank of Willow River against Paul Pangerl, Marie Pangerl, his wife, and E. C. Townsend upon a promissory note. There were findings and judgment for the plaintiff. The defendant Townsend appeals. The defendants Pangerl did not answer and have no defense.

1. On October 7, 1912, the Pangerls made a note to the plaintiff bank for $1,178.60 due in six months. On March 27, 1913, the Pangerls made to Townsend a note for $352. This note was indorsed by Townsend and is the one in suit. The facts attending its execution are about these: Peter Praxel was the cashier of the bank. A day or two before the making of the note he went to Rutledge, a few miles from Willow River, where Townsend and the Pangerls lived. He arranged either with Townsend to get the Pangerls to make a new note, or with Paul Pangerl personally. He later made out the note at the bank and sent it by mail to Townsend and the Pangerls signed it. Pangerl did not know that the note ran to Townsend. Townsend's explanation of his indorsement is that he had the note among some checks for deposit, that Praxel called in a few days and was to take the checks to the bank, and that in indorsing the checks he inadvertently indorsed the note. He then refused to deliver it until Praxel gave him what he calls a ‘clearance.’ This was furnished a few days later in the form of a memorandum signed by Praxel agreeing to reimburse him if he had to pay the note and it was then delivered to Praxel for the bank and was credited upon the $1,178.60 note. The Pangerls got the benefit of it. Townsend got nothing. It was never a subsisting obligation between him and the Pangerls. He was on it as an accommodation either for the Pangerls or for the bank. The Pangerls never heard of his connection with it until suit brought. He was not accommodating them. The evidence is conclusive that Townsend indorsed and delivered the note at the request of Praxel and as an accommodation to the bank. Townsend says that Praxel suggested that this would avoid the necessity...