Central Bank of Bingham v. Perkins , 43 Idaho 310 ( 1926 )

It would be impracticable to set out in full the evidence introduced in the trial of this cause. After reading the record I am satisfied, however, that the evidence is not sufficient to justify an affirmance of the judgment, and that there is ample evidence to justify the conclusion that the note sued upon and made payable to the Citizens' State Bank was delivered to the bank conditionally.

It is conceded that respondent stands in no better position than the Citizens' State Bank would have been in had it brought the action, and that all defenses against the payment of the note may be urged with like effect against respondent as could have been made against the original payee.

The conditions of the delivery of the note in question, as testified to both by the maker and the cashier of the Citizens' State Bank, were that the note was delivered to the bank with the express understanding that it was to be used for the accommodation of the bank and not for the accommodation of the Iron County Coal Company. While the coal company may have received the proceeds of the note, it was given to the bank for its accommodation in order to make a loan to the coal company. It further appears that the maker of the note was told that he would not be called upon to pay either the principal or interest thereon, but that the note would be returned to him canceled. That the maker received no consideration for the note is amply supported by the evidence. I am unable to see, in so far as the facts in this case are concerned and particularly touching this phase of the case, that they differ in any respect from the facts adduced in the case of Central Bank of Bingham v.Stephens, 58 Utah, 358, 199 P. 1018, wherein the supreme court of Utah held that there was a conditional delivery of the note and denied a recovery in favor of the bank suing thereon.

I am further satisfied that when the principles of law announced by this court in First Nat. Bank v. Reins, 42 Idaho 720,248 P. 9, are applied to the facts in the case at bar, a recovery on the note here sued upon cannot be sustained. InFirst Nat. Bank v. Reins, supra, this court laid down the following rule, which is amply supported by authority, that: "It is also well settled that if a written instrument is delivered, the purpose for which it was delivered, as between the parties and as to those having notice, may be shown by parol, and the effect of the admission of such testimony is not violative of the rule against the admission of parol evidence to vary the terms of a written instrument, but is to show the intention of the parties and what the agreement was."

The agreement between appellant and the Citizens' State Bank (through the bank's cashier, Kelly), coming from the mouth of Kelly, was that as cashier he received appellant's note through the mail, and that it was mailed to him at his request and as cashier of the bank; that he asked appellant to send the note to the bank and that it would be used as a mere matter of form and returned, canceled, before maturity; and that appellant received no consideration for the note. When asked the question, by whom the note was to be returned, Kelly answered, "the bank."

In Central Bank of Bingham v. Stephens, supra, upon the question of the conditional delivery of the note in that case, witness Kelly was interrogated as follows and replied as indicated:

"Q. Didn't you then, when he hesitated, when Mr. Stephens hesitated, didn't you then say, 'Tom, this is a matter of form; I'll. hold this for 8 or 10 days and hand it back to you.' Didn't you in substance say that to him? A. Yes; very possibly.

"Q. And didn't you say, 'Tom, this note is not going to be used for any purpose; I just want it for a few days, and I'll hand it back to you?' A. I may have said something similar to that."

Under like circumstances the note was obtained from appellant in the instant case. Appellant understood and so did Kelly that the note was taken for the accommodation of the bank and that appellant would not be called upon to pay it, and that it would be returned to appellant, canceled, by the bank. The findings of the trial court to the contrary are not supported by the evidence. These conditions attaching to the note were binding upon the bank taking it as well as upon the bank seeking to enforce its payment. Neither of them could enjoy the benefits of the transaction and escape the conditions thereof.

If a bank, through its cashier who is permitted to transact the business of the bank without let or hindrance, can obtain from one not schooled in high finance a note for the accommodation of the bank, delivered conditionally, and later on treat the note as one delivered unconditionally and mulct the maker for the full amount of both principal and interest, and attorney fees; or if one standing in the same position as the payee bank and taking the note precisely as the payee bank took it — with the conditional agreement under which it was taken — may do this, I am much in doubt that upholding such a result is supporting "good business practices the commercial world."