Oilton State Bank v. Ross

NICHOLSON, J. This action was instituted by the Oilton State Bank, as plaintiff, against B. B. Ross and Terry Marlin, as defendants, to recover the sum of $2,500, with interest and attorneys’ fee, upon a promissory note made, Executed, and delivered by B. B. Ross to the First National Bank of Oilton, payment ¡of 'vihieh wias guaranteed by the defendant Terry Marlin by an instrument in writing reading as follows: “Oilton, Oklahoma, “March 11, 1919. “First National Bank, “Oilton, Okla. “Gentlemen: I will guarantee payment on the note which I ask you to carry signed by B. B. Ross. I prefer not to indorse note, but you can hold this letter and I will protect you against any loss on same.. “Mr. Ross owns a farm and other property. If this is nut satisfactory, let me hear from you. “Xours truly, “Terry Marlin.” lit was alleged in the petition that the plaintiff had purchased thej First National Bank of Oilton, and was the owner of the property and assets of said bank, including the note sued upon. The defense relief upon vfias that the note and guaranty were executed and delivered to the bank without consideration, and solely for the accommodation of the hank, and at its request. A jury was waived and the cause tried to the court, which trial resulted in a judgment in favor of the defendants, from which the plaintiff has appealed. Plaintiff's first contention is that the court erred in overruling its demurrer to th^ evidence of defendants. Both Ross and Marlin testified that the note was given without consideration and solely for the accommodation, of the bank, and Marlin testified that the guaranty was executed without consideration, at the request of the officer of the bank, and solely for the accommodation of the ¡bank. A demurrer to the evidence admits the truth of all the evidence adduced, and all the facts which it tends to establish, as well as every fair and reasonable inference to be drawn therefrom (Singer v. Citipens Bank of Headrick, 79 Okla. 267. 193 Pac. 41; Boatman v. Coverdale, 80 Okla. 9, 193 Pac. 974; Sharum v. Sharum, 82 Okla. 266, 200 Pac. 176; Goar v. Brown, 82 Okla. 227, 200 Pac. 156); therefore, the truth of the evidence of the defendants was, for the purpose of the demurrer, admitted. But it is said that Marlin’s testimony shows 'that he executed the guaranty of the note for the purpose of deceiving the bank examiner, and under these circumstances he is precluded from setting up any defense thereto, and the cases of State Bank of Moore v. Forsyth (Mont.) 108 Pac. 914, 28 L. R. A. (N. S.) 501, and German American State Bank v. Watson, 99 Kan. 680, are cited as sustaining this position. In Bank of Moore v. Forsyth, supra, the facts were that the defendant, at the request of the cashier of the hank, executed the note involved for the purpose of substituting this note for the notes of the cashier, held by the bank. The bank parted with consideration for th^ note, and the court held that the hank was entitled to recover regardless of the fact that the defendant actually received nothing for th^ note. The first paragraph of the syllabus hi that ease reads: "It is a valid defense to. the .enforcement of a note against the maker, by the party to whom it vlas delivered, that the note was without consideration and was delivered on condition that the maker should not be held liable thereon.’’ In German American State Bank v. Watson, supra, the facts' were that one Blitz applied to the bank for a loan, hut at that time he had already borrowed from the bank as much as it could loan to any one individual. The president of the bank advised the defendant of this situation, and requested him to execute a note for the amount it loaned to Blitz, and stated to the defendant that he would incur no obligation by the making of said .notd. The court held that while the note was made at the request of the president of the bank, it wag in fact made for the’ accommodation of Blitz, who received the consideration therefor, and further held Ithat under the facts in that case thq' maker of the note *26 could not defend an action tliereon by showing that it was executed without benefit to him undqr an agreement exempting him from liability, in order to enable the bank to which it was payable to make an additional loan to a customer who had already borrowed to the limit allowed by law, for the reason that having voluntarily signed the note in order that the bank examiner might believe it to be an asset of the bank, he ought not to be permitted to deny that in effect. It will be observed that there was a consideration for .the note, viz., the money loaned to Blitz. This case does not go to the length of holding that thcj payment of a note .executed entirely vlithout consideration and solely for the accommodation of the -payee may be enforced by such payee, and we have been referred lo no authority so holding. While the law will not permit the maker of a note, wheire there is -a consideration therefor, to show an oral agreement -at the time of its execution that he was not to be liable on the note!, for the reason that this would violate the rule forbidding the contradiction of a written instrument by parol evidence, this rule is not infringed by permitting it to he shown by parol what eause'd. the party thus to obligate himself, and thereby -test the! question of whether he, is legally bound as the Writing imports, or whether he is by any cause Wholly or partially freed from liability thereon. Rice v. Rice, 101 Kan. 20, 165 Pac. 799. By the provisions of section 7698. Comp. Stat. 1921, absence or failure of consideration is a. matter of defense as against any person not a holder in due course, and partial failure of consideration is a defense pro tanto, whether the failure is an ascertained and liquidated amount or otherwise. As between the original parties to a note, the consideration therefor may always, ini the absence of an estoppel, be! inquired into, and a want or'failure of consideration constitutes a good defense. 8 Cyc. 31, and cases there cited; Bank of Commerce of Sulphur v. Webster et al., 70 Okla. 68, 172 Pac. 943; Jesso French Piano & Organ Co. v. Bodovitz, 73 Okla. 87, 174 Pac. 765. There is no question o-f a holder in dud course involved in this case. The note in question was given to the First National Bank of 'Oilton, which w|as afterwards. by its stockholders and officials, denationalized, and the plaintiff, a state bank, succeeded to its assdts and liabilities. An es-toppel was not pleaded, and the’1» is no evidence in the record of any conduct upon the part of the defendants which would est(..p them from questioning the consideration for the note. The trial court properly . overruled the demurrer to thej evidence. This leaves for consideration the question of whether the judgment is .supported by the evidence, for this being an action at law, the judgment will mot be disturbdU if there is competent evidence reasonably tending to support It. Elson v. Walker, 80 Okla. 237, 195 Pac. 899; Jackson v. Dardin, 82 Okla. 256, 200 Pac. 223; Katterhenry v. Williamson, 78 Okla. 221, 190 Pac. 404; Mounts v. Boardman Co., 79 Okla. 90, 191 Pac. 302. Marlin testified that he was formerly interested in the First National Bank of Oil-ton, and that he sold his interest therein to O. G. Morris and Claude Phillips; that Morris was cashier and Phillips active vice president of the bank at the time of the execution, of the note in controversy, which w.as executed some time after he had sold hi-s interest in the bank. He testified in regard to the transaction, in part, as followjs: “Q. Did you have a conversation, with either Morris or Phillips relative to a note* being put in the bank? A. There wasn’t much of a conversation. They spoke to me about it, yes, sir. Q. Which one spoke to you about it? A. Morris first spoke to me about it, they were both .at the desk when they talked to me about it, but Mr. Morris was the first one to -ask me about it. Q. What was it that Mr. Morris asked you about the note? A. Morris said to me that ‘Our deposits have dropped off the last few days like everything; our hank balance, our exchange is very low and we have 'got to do something .about it.’ ‘Well,’ I said, ‘You better run over to Tulsa and borrow a few thousand dollars to carry you over here for a little -uPBle-’ He said, ‘We were wondering if you would -objqct to letting us have your note to use here in the bank for a short time.’ I did object.; I said, T would rather not do it.’ Q. What reason did you give for not wanting to do it? A. I said, T think I will go i.n the] banking business some place again in the state of -Oklahoma, and don’t like to have my note out for the bank examiner to criticize.’ That was the reason I objected to making the note myself. Q. Then what followed after the conversation? A. Just at that time they said, ‘We will go ove!r to 7ale, we have some friends over there that v|e can get to supply us with a .note -and we will go -ovqV there and get one as quick ns we can 'get away.’ Q. Now, then, was there .anything ever said to yon about wanting you to asis-ist them in getting the note? A. Yes, sir; later in the day I was leaving *27 there and going over to Glencoe, but was coming back to Oilton in a day or two later Just before I started to the train to go to Glencoe, I tbink it was Mr. Morris said to me, ‘Will you be in Bambee?’ And I said, ‘Yes, I am going to Pawnee and g..-ing to Glencoe.’ He said, ‘Don’t you know someone over there that you could get to make us the note?’ He said, ‘You can tell them — 1 you can assure them that there will be no obligation resting on them and, get them to make us a note that we can use here for a little while.’ Hd said, ‘It will be a great accommodation to us.’ We — I first said to Morris, ‘I don’t much like to do that.’ But he insisted and I said, ‘I mill see what I cun do about it.’ So I went over to Glen-coe and 'asked Mr Ross while I was there. I asked him if he vstould object to signing such a note and he said, ‘I will -sign it if you want me to.’ Q. Then -after this noqe was signed by Mr. Ross in Glencoe, what if anything did you do with the note? A. I carried it back over to Oilton and turned it over -to the First National Bank. Q. Wha-t if anything was said relative to the Rois-s note? A. They thanked me for it, and that was all that, was said at that time. They took it and put it away some place. Q. Then what if anything was done later in reference to the note? A. I think it ulas the next day they asked me what date the bank examiner bad been there and I said to them to look on the books, that I didn’t remember. They went and looked on their books to find out just when we had been examined and they found that it was only a short time until they were due another- examination. They said to me, ‘What do you think Mr. -. the bank examiner will say about this Ross note?’ I eay-s, T don’t know, he may cuss you out a little about it.’ ‘Well,’ they said, ‘We would hate to get in bad with the bank examiner over that.’ I -said. ‘Yes, you don’t want to do that.’ They asked me if I wouldn’t indorse ii‘i anl I said no, I wouldn’t w-ant to do that. There was nothing more said about it then until soon 'before I went to the train again to come back to Pawned, and they come to me again about it. and .said, ‘If yon won't indorse that note won’t yo-u give us a letter of some kind so that if when the examiner comes along he d’-esn-’t object ito it. that can satisfy him, and then as soon as he is gone we will send this back to you? W-ell, I finally said, ‘Yes, boys, I guess I will do that.’ I hated tn> turn thojm down. I said, T guess I will do .that.’ Q. . Did you receive any consideration ‘whatever for signing this letter? A. Not one nickel: no, sir. Q. You say it was made w-hen in reference to the time the note was m-ade? A. The letter? Q. Yes. A. It was made two or three days after the note was made, about three days I think. Q. Do you know whether or not Mr. Ross received any consideration of any kind whatever for making this note? A. He did not.” The defendant Ross testified as follows: “Q. Do you remem-ber the occasion of signing a notd over in Glencoe in 1919? A. I remember that fact. I don’t remember the date. Q. W-ho w-as it presented the instrument to you to sign? A. Mr. Marlin. Q. What statement, if any, -did h^ make to you in asking you to- sign it? A. Well, he a-sked me if I wo-uld sign a note for -the bank, that it incurred .no obligation and was an accommodation note. Q. Is that about -all that was said? A. That is about all. Q. And you signed it? A. Yes, sir. Q. Did you receive anything for signing it? A. No, sir. Q. Did you know at thei time what bank it was 'on? A. No, I didn’t. Q. Di-d you give enough attention to even read the note? A. I didn’t read it. Q. You never had .any business dealings with this bank? A. No, -sir. -Q. Didn’-t you know anything about them or any of their officers? A. No.” O. G. Morris testified that the note and guaranty were giv-en ini lieu -o-f -a note of Marlin’s for the sum -of $2,500, but Marlin denied ibis. The evidence asi to one material fact, viz., whether or no-t th^re was a. consideration for the note, i-s conflicting, and under these circumstances this cour-t wiill not weigh the evidence, but if there is competent evidence reasonably supporting the judgment, the same will not be disturbed. Hays v. Azbill, 76 Okla. 313, 184 Pac. 945; Stewart v. Riddle. 76 Okla. 70, 184 Pac. 443; Railway Mail Association v. Edmonds, 79 Okla. 33, 191 Pac. 159; Knights & Daughters of Tabor v. Chestnut, 82 Okla. 192, 200 Pac. 148. There is competent evidence reasonably supporting the judgment, -therefore such judgment will .not be disturbed. The judgment is affirmed. JOHNSON, O. J., and BRANSON, WARREN, and GORDON, JJ., concur.