Camas Prairie State Bank v. Newman

STEWART, J. The facts in this case are out of the ordinary of business transactions. On July 1, 1907, IT. E. Newman, Jr., a member of the firm of H. E. Newman & Sons, drew a cheek on the First National Bank of Shoshone, Idaho, payable to the order of the Camas Prairie State Bank, for the sum of $500, and the Camas Prairie State Bank cashed said cheek and paid to H. E. Newman, Jr., the amount stated therein, $500. The Camas Prairie State Bank presented such check to the First National Bank of Shoshone, which declined to pay the same. This action is based upon such check, in which the plaintiff, the payee of said cheek, brings this action to recover from H. E. Newman & Sons the amount paid upon said check. The answer of the defendants admits that H. E. Newman, Jr., drew such check, and that the plaintiff cashed the same, and that it was presented to and not paid by the First National Bank of Shoshone. The defense made by IT. E. Newman & Sons is that the check was drawn by H. E. Newman, — 723 — Jr., for the purpose of obtaining money with which to gamble contrary to the laws of this state, being drawn for his own individual purpose and not within the scope of the partnership, and that H. E. Newman, Jr., did not have the right or authority to draw such check, and that the plaintiff had reason to know and believe, and did know and believe, that said check was issued for such purpose, and without the authority of said H. E. Newman, Jr., to draw the same. It is also alleged in the answer that the check was executed for the purpose of obtaining money with which to gamble with one Lee Mink, contrary to law, and at the solicitation of said Lee Mink, and that when the check was drawn and presented to the plaintiff, that the plaintiff required said Mink to indorse said check, which was done accordingly, and at the time the same was drawn the plaintiff had in its possession money of said Mink more than sufficient to pay said check, and which could have been applied in the payment of the same, but which was not done, although plaintiff knew that the money so obtained from the plaintiff on said check was to be used in gambling with said Mink, and was lost to him in gambling, and that plaintiff wilfully and fraudulently conspired with said Mink, and refused to apply the money in its hands for the payment of said check, although having the right and power so to do. Upon the issues thus presented, the cause was tried to a jury, which returned a verdict for the plaintiff for the amount sued for. This appeal is from the judgment and from an order overruling a motion for a new trial. It is admitted by the evidence in this case that H. E. Newman, Jr., was a member of the firm of H. E. Newman & Sons; that Newman, Jr., drew the cheek in controversy and the plaintiff cashed the same; that H. E. Newman, Jr., received the amount named in such check, to wit, $500, from the plaintiff. It also further appears that H. E. Newman, Jr., had been gambling with one Lee Mink and had lost the sum of $300, and had drawn checks for such sum upon the First National Bank of Shoshone payable to the order of Lee Minie, signed the same in the same amount as the check in contro — 724 — versy, and that after drawing the cheek in controversy, the three checks drawn in favor of Lee Mink were taken up and paid with the money received from the plaintiff upon the check in controversy, and that thereafter H. E. Newman, Jr., continued to gamble until he had lost the balance of the money received from plaintiff. These facts are testified to by H. E. Newman, Jr. Thus the facts in this case are rather out of the ordinary, as it is clearly shown by the evidence of H. E. Newman, Jr., that he was engaged in violating the laws of this state in gambling, and that the money paid upon the check in controversy was used for such illegal and unlawful purposes. In this connection it may be Well to observe that it was the duty of the trial court, and we assume that the trial court performed this duty, to direct that the parties engaged in such unlawful business, as shown by the evidence in this case, should be prosecuted for such offense and dealt with as provided by the laws of this state. Under the law a check is an instrument by which a depositor seeks to withdraw funds from a bank. As between the drawer and the payee it is an evidence of indebtedness. Usually a cheek is given for money borrowed or a debt contracted, and in commercial transactions as well as in law it is equivalent to the drawer’s promise to pay and an action may be brought thereon as upon a promissory note. (1 Morse on Banks and Banking, sec. 388.) The cheek then in controversy in this case was an obligation on the part of H. E. Newman & Sons to pay a debt to the plaintiff, and when payment was declined by the drawee, the plaintiff had a right of action to recover the debt of which such check was a mere evidence. If the check was given for the purpose of procuring money with which to gamble, and the plaintiff was a party to such transaction and cashed the check with the knowledge that it was to be used for such unlawful purpose, the plaintiff cannot recover, as the courts will not lend their aid or assistance in violation of the laws of this state, or to aid or abet in the commission of crime. (20 Cyc. 939.) — 725 — This question, however, was an issue of fact to be tried and determined by the jury under proper instructions, and in this case having been submitted to the jury and they having determined that matter against the contention of respondents, their verdict will not be disturbed unless it is not supported by the evidence. From an examination of the evidence, we think it clearly appears that while the money procured upon said check was used and lost by H. E. Newman, Jr., gambling, yet it also appears that the plaintiff had no knowledge at the time the check was cashed as to the purpose for which the money was to be used, and that the evidence clearly supports the verdict of the jury upon this question. It is also argued that inasmuch as the check was drawn by H. E. Newman, Jr., for purposes outside of and beyond the scope of the partnership business of H. E. Newman & Sons, that for that reason the plaintiff cannot recover in this action. The check, however, appears regular upon its face and it is admitted that H, E. Newman, Jr., had authority to issue checks in the name of IT. E. Newman & Sons, and when the cheek was so issued, unless the plaintiff was advised or knew that the check was drawn for a purpose outside and beyond the scope of the partnership, the right to recover therein will not be denied the plaintiff, and upon this question the verdict of the jury is conclusive, and we are satisfied the evidence is sufficient to support the verdict. It is next argued that inasmuch as Lee Mink indorsed such cheek, and the drawee refused to pay the same, and as the plaintiff was then advised of the purpose for which the check was drawn, it was the duty of the plaintiff to have applied money then in the bank on deposit in the name of Lee Mink in the discharge of such check and indebtedness, and that the plaintiff, upon failure to so apply the deposit of Lee Mink, cannot recover from the defendants. The trouble, however, with this contention is that the knowledge obtained by plaintiff, with reference to the purpose for which the money was to be used, was obtained after the transaction was closed, and after the plaintiff had paid to Newman, Jr., the amount of said check. The liability of the defendants to the plain — 726 — tiff must be determined from the conditions as they existed at the time the plaintiff cashed such check, and after the check was cashed, it became a debt of the defendants, and the plaintiff had a right to rely upon the defendants to pay the same, even though plaintiff might also have recovered the amount of such indebtedness from Mink by reason of his being an indorser. The fact that Mink was an indorser would not require the plaintiff to look to him to pay the indebtedness. The plaintiff in law could look to the drawer of such cheek, as the maker of the original obligation, and there is no principle of law which imposed upon the plaintiff the necessity of applying money in its hands upon deposit in the name of Lee Mink in the discharge of such obligation, and certainly the facts did not require it. It is also contended that the trial court erred in denying the defendant the right to show that previous to the time the check was cashed by plaintiff that H. E. Newman, Jr., had been drinking, and was intoxicated at the time the check was cashed. Whether Newman had been drinking previous to the time the check was cashed is certainly immaterial, and whether his condition was such at the time the check was cashed, as to make him liable upon a contract made by him, is a matter of defense which is not set forth in the answer in this case or plead as a defense. If Newman, Jr., was incapable by reason of intoxication from making the contract or entering into the obligation to pay plaintiff the money received upon the check, such facts should have been plead as a defense, and cannot be proven under the plea, that the money was advanced for gambling purposes with knowledge on the part of the plaintiff of the use to which such money was to be applied. It is next urged that the court erred in not granting a new trial upon the ground of newly discovered evidence. The showing, however, is insufficient, for the reason that it does not show diligence, but, on the contrary, shows that what is claimed as newly discovered evidence was in the possession and knowledge of the defendants at the time of the former — 727 — trial. This is not newly discovered evidence. (12 Ency. PL & Pr. 804.) There are some other questions presented by the record but which we do not deem of sufficient importance to discuss in detail. We find no error in this record, and believe that the verdict of the jury is fully supported by the evidence. The judgment is affirmed. Costs awarded to the respondent. Ailshie, J., concurs.