Home Land Co. v. Osborn

AILSHIE, J. (After stating the facts.) — A great number of errors have been assigned on the admission and rejection of evidence and the giving of certain instructions by the court and the refusing to give others, but they all revolve about the leading and decisive question presented by appellant to the effect that the note sued on was merely a pledge in the hands of the Effingham bank, and that the title to the same never passed to the bank and that the bank was unable' to pass title to the respondent in this case. If that question should be resolved against the contention of appellant, the other assignments of error can prove of no avail. The Effing-ham bank took the paper and paid the face value thereof.. The transaction was not accompanied by any pledge agreement. The assignor and holder of the paper, the First National Bank of Nez Perce, guaranteed the payment of the note. The collections of interest were made through the First. National Bank of Nez Perce. In other words, the Effingham bank did not call directly on the maker of the note for interest, and presumably did not expect to call directly on the maker for the principal when due, but it 'called on the guarantor, the First National Bank of Nez Perce, which responded in the payment of interest as the same fell due, and it accordingly called on the maker for the same. The guarantor therefore performed the duties of a collecting agent,, solely for the protection of its guaranty on the paper and a profit of four per cent interest, which represented the difference between the rate the note bore and the rate the Effing-ham bank was to accept. These facts, however, did not reduce this transaction, involving negotiable commercial paper, to the mere condition of a pledge. In applying the law governing pledges of goods and ehattéls to that of negotiable paper, some distinctions must be observed in the matter of presumptions, growing out of the transactions. A deposit of the ordinary100 personal property as collateral for the payment of a loan carries with it certain presumptions which would not arise on the transfer of commercial paper where the face value thereof is paid for the same. In other words, in the absence of a specific agreement or understanding that it should be a pledge, the law of negotiable instruments raises the presumption that title has passed, and that the holder thereof is the owner and entitled-, to maintain his action thereon for the recovery thereof. (See secs. 3508 and 3648, Rev. Codes; Craig v. Palo Alto Stock Farm, 16 Ida. 701, 102 Pac. 393.) Under the facts as disclosed by the record in this case, it is clear to us that the bank of Effingham took title to the note sued upon, and was entitled to maintain its action thereon for the collection of the same. It had a right to sell and transfer the paper to the respondent. We find no error of law which would either call for or justify a reversal of the judgment in this case. One question of fact, however, would seem to require a modification of the judgment. It is contended by appellant that $1,200 had been paid on the note, while the respondent claims that only eight hundred was paid, and the jury allowed only $300 on interest. The indorsements on the note as pleaded are as follows: “Interest paid to March 4, 1907; interest paid to March 4, 1909.” The note bears date March 4, 1905, and bears interest at the rate of twelve per cent per annum. The cashier of the Bank of Nez Perce testified that the bank books showed under date of March 2, 1908, a deposit in favor of the Effingham State Bank of $800 received from Osborn. He further testified that the books showed that in January, 1909, “there was charged to the account of the Effingham State Bank on account of Osborn $400.” The witness further says: “The record shows that there was $400 deposited for the benefit of the Effingham State Bank..... The record shows that Effingham for Osborn got $400 for interest about that time.” The record is somewhat confusing as to-, the date. At one place it states January 18th and at another place January 6, 1909. The witnesses seem to adhere substantially to these statements, but on cross-examina [101] tion there is some confusion introduced into the record which evidently had the tendency to lead the jury to conclude that only $800 had been paid on the note. As we read the record, however, we do not find any substantial dispute or denial of the proposition that $1,200 was received on account of this note. We have concluded to order a conditional modification of the judgment by reducing it in the sum of $100, provided the plaintiff herein within thirty days after the going down of the remittitur file a waiver of that sum and an acceptance of the judgment reduced in the sum of $100. .Upon failure to do so, a new trial will be granted. Judgment modified as above stated. The total costs of printing the transcript, brief of respondent, and forty pages of appellant’s brief, and the other taxable costs in the case, will be divided equally between the appellant and respondent. Sullivan, C. J., concurs.