The First National Bank of Eureka v. Wilson
| Decision Date | 09 June 1917 |
| Docket Number | 20,740 |
| Citation | 101 Kan. 72,165 P. 859 |
| Parties | THE FIRST NATIONAL BANK OF EUREKA, Appellant, v. NANNIE WILSON and MAMIE E. WILSON, Appellees |
| Court | Kansas Supreme Court |
Decided January, 1917.
Appeal from Sedgwick district court, division No. 1; THOMAS C WILSON, judge.
Judgment affirmed.
SYLLABUS BY THE COURT.
1. BANK--Contract with Customer--To Manage Exchange of Land--Breach by Bank--Damages--Charter Powers--Ultra Vires--Estoppel. Where a national bank undertakes through its officers to assist a customer in the financial transaction of exchanging her land for certain lien notes and other property, and agrees to hold the deed conveying the land of the customer until the lien notes should be properly indorsed by the other party guaranteeing their payment, and the officers of the bank, after receiving compensation for their services, accept the notes without the proper indorsement and then deliver the customer's deed to the land, in violation of their agreement, by reason of which the customer suffers loss, the bank may not, when sued for the loss so occasioned and after enjoying the benefits of the transaction, set up the defense that the agreement made and the business done was in excess of its charter powers, nor escape liability upon the ground that the acts of its officers were ultra vires.
2. SAME--Act of Bank Officers--Binding on the Bank. Under the evidence it is held that the officers of the bank in making and carrying out the agreement were acting for the bank and not for themselves individually.
Howard J. Hodgson, of Eureka, J. Graham Campbell, and Ray Campbell, both of Wichita, for the appellant.
E. L. Foulke, C. A. Matson, and J. D. Wall, all of Wichita, for the appellees.
The First National Bank of Eureka brought this action against Nannie Wilson and Mamie E. Wilson upon a promissory note given in renewal of a note dated December 17, 1910. The defendants filed a cross-petition setting up a counterclaim to the bank's demand. The jury's verdict was in favor of the defendants, who recovered judgment for costs. The plaintiff appeals.
The facts upon which the defendants' counterclaim was based were substantially as follows: About September, 1910, the defendant, Nannie Wilson, entered into an oral agreement with Ira A. Braden to exchange her land in Greenwood county and some personal property for certain land in Texas and five vendor's lien notes belonging to Braden. Desiring to have her agreement in writing and her interests carefully protected, she sought the assistance of the plaintiff bank, and the assistant cashier referred her to Ira P. Nye, then vice president of the bank. He undertook to draw up a contract showing the agreement between defendant and Braden, to look after her interests in the transaction and to see that she was fully protected in the exchange of properties. The vice president was instructed to deliver the papers conveying the defendant's property to Braden upon the latter's fully complying with his part of the agreement, part of which was to furnish an abstract showing a good merchantable title to the Texas property and also to guarantee the payment of the vendor's lien notes by his indorsement. This part of the agreement, as incorporated in the contract written by Nye, was expressed as follows: "And to furnish an abstract showing good and merchantable title and to indorse, assign, transfer and set over to said first party (Nannie Wilson) five certain promissory notes for $ 1158.60 each." The first of these notes became due January 1, 1911. Nye delivered to Braden the papers conveying title to defendant's property, but accepted the vendor's lien notes from Braden indorsed without recourse, and the abstract which he accepted failed to show good title to the Texas land. The defendant was unable to collect payment of the lien notes when due, and being unable to resort to Braden for their payment, had to take the land securing the notes, from which she was unable to realize their full value. This fact together with the partial failure of title to the Texas land subjected defendant to a loss much greater than the amount of the plaintiff's demand, but the statute of limitations having run against her claim, she was not allowed to offset more than the amount of the plaintiff's claim against her. It was in expectation of realizing upon the first lien note, due January 1, 1911, which was left with plaintiff bank for collection, that defendant had borrowed from plaintiff the $ 700...
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