American Trust Co. v. Anagnos

*329 AdaMs, J. Tbe plaintiff excepted to tbe following instructions: “Tbe court charges that tbe defendant having admitted execution of this note, it will be jour duty to answer this issue $5,000 with interest from 3 March, 1927, but if tbe defendant has satisfied you by tbe greater weight of tbe evidence that it was agreed by a representative of tbe bank that it should not be paid, that be should not be called upon to pay it, but that it was a matter of accommodation of tbe bank or if you shall find it to be true by tbe greater weight of tbe evidence that tbe note was without consideration, tbe court charges you defendant would not be liable, then you would answer that issue Nothing.’ ” Every negotiable instrument is deemed prima facie to have been issued for a valuable consideration, and every person whose signature appears thereon to have become a party for value — value being any consideration sufficient to support a simple contract. C. S., 3004, 3005. It will be noted that tbe jury was instructed in tbe alternative as to tbe agreement “by a representative of tbe bank” and tbe want of consideration : tbe issue should be answered “Nothing” if tbe agreement was made or if there was no consideration for tbe note. We have no knowledge that any particular finding was tbe basis of tbe verdict. According to tbe testimony of tbe defendant, M. A. Turner, who was president of tbe Charlotte Bank and Trust Company, requested tbe d&-fendant to give him a note for $5,000 as an accommodation to him, promising to execute to tbe defendant a note for tbe same amount. Notes were thus interchanged on 4 September, 1926, and at maturity they were returned to tbe respective makers. Turner then asked tbe defendant to execute another note for tbe same sum in place of tbe one 'Turner bad returned. Tbe defendant did so, but tbe Charlotte Bank and Trust Company, not Turner, was named as payee. Turner then gaye bis note to tbe defendant. If tbe defendant’s testimony be accepted, tbe transaction was intended as an accommodation not to tbe bank, but to Turner; and if Turner was acting only for bis own interest tbe bank would not be bound by bis agreement with tbe defendant. It is settled law that an officer of a bank cannot bind tbe bank by bis acts in respect to matters in which be is personally interested, and that those who have business with him are deemed to know that be cannot use tbe funds of tbe bank for bis own benefit. Grady v. Bank, 184 N. C., 158; Bank v. West, ibid., 220; Stansell v. Payne, 189 N. C., 647; Quarries Co. v. Bank, 190 N. C., 277, 280. In Bank v. Wells, 187 N. C., 515, it-is said: “Ordinarily a bank is presumed to have notice of matters which are known to its president, upon tbe theory that be will, in tbe line of bis duty, communicate to tbe bank such information as be has, but tbe law recognizes tbe frailty of human nature, and where tbe president has a personal *330 interest to serve or is acting in a transaction in Ms own behalf, the presumption does not obtain that he will communicate to the bank matters which are detrimental to him.” It is not unreasonable to presume that Turner made the Charlotte Rank and Trust Company payee in the defendant’s note with the design of using the funds of the bank for his own benefit. If he did so and made use of the funds there is no presumption that he communicated to the bank his agreement with the defendant. On the contrary, under these circumstances, the bank would have parted with its money on the strength of the defendant’s note, and the defendant, nothing else appearing, would be liable thereon. It may be true that the defendant received nothing in consideration of his note except the note of Turner. But the note he executed to the bank may have been supported by a valuable consideration though the defendant neither received nor expected to receive any benefit; it is sufficient if the bank was subjected to loss or inconvenience. In a legal sense a valuable consideration may consist in some right, interest or benefit accruing to one party, or in some forbearance, detriment, loss, or responsibility given, suffered, or undertaken by the other. Brown v. Ray, 32 N. C., 73; Institute v. Mebane, 165 N. C., 644; Fawcett v. Fawcett, 191 N. C., 679; Fertilizer Co. v. Eason, 194 N. C., 244. The instruction complained of is subject to these criticisms: (1) an agreement between Turner and the defendant would not be binding on the bank if Turner was personally intei’ested in getting the amount of the note from the bank for his own benefit — a phase of the case which the jury was not permitted to consider; (2) there is no sufficient evidence that the note in question was executed as a matter of accommodation to the bank; (3) the phrase “without consideration” should be more fully explained in view of the plaintiff’s contention that Turner received the amount of the note from the bank and used it for his own benefit. For the error assigned there must be a New trial.