Citizens State Bank v. Houser

The opinion of the court was delivered by West, J.: As a defense to an action by the bank on •a promissory note the defendant set up an alleged •agreement with the bank by which it was to guarantee the payment of $1000 on a certain note which he had .signed with his son-in-law, Miller, as surety. The vital question in the case was whether the bank made such guarantee or whether its cashier, Smith, made it for himself only. After the defendant, Houser, had testified a demurrer to the defendant’s testimony was overruled, but after the bank’s testimony was introduced the trial court directed a verdict in its favor. The appeal presents the one question whether or not it was error to take the case from the jury, and this depends on whether or not the defendant, Houser, produced evidence which entitled him to its consideration by the .jury. While the cashier testified that practically all the numerous notes leading up to and involved in the controversy were held by him and not by the bank, he .stated that the bank had a mortgage on certain horses [352] and mules, and that he had a mortgage on certain other-animals ; that the bank took possession of some twenty-five head of stock in October, 1912. The defendant testified, among other things, that in 1910 he had a mortgage on the alfalfa grown on the ranch where his son-in-law lived, to secure a note of $2100, and had started to bale the alfalfa when the. cashier told him if the hay was baled and shipped out it would be necessary to buy other hay for the stock on the place; “He did not know how the stock would be wintered and that they had a mortgage on it,” and said: “You ship that hay off of the ranch out, bale it and ship it and sell it, why that stock will starve, or we will have to buy hay from other points, and we will just as soon buy it from you. If you will turn this hay over to the Bank, why I will endorse on a new note, a thousand dollars I will guarantee the payment of the hay;” Houser further testified that the hay was fed; that Miller fed it to the stock that the bank had there. “Smith told me and Miller told me. It was J. E. Smith, the cashier, that told me.” In another place he testified : “This man Smith was the cashier of the Citizens State Bank at Grainfield. And also at different times the president told me any business I done with Mr. Smith would be O. K. I talked with him about it. Mr. Lee Johnson is president. . . . There was an amount stated as to what I should be paid for the hay, one thousand -dollars, -at the time and as a part of the transaction that endorsement was made on that note that has been read in evidence. The Bank nor anyone else has ever paid me-the thousand dollars. Nor has the guarantee been fulfilled on that note by reducing it one thousand dollars.” The answer alleged that the cashier in indorsing the guarantee on the twenty-one-hundred-dollar note was acting for the plaintiff, which was denied by the reply. This note was made payable to the order of J. C. Houser at the Citizens State Bank, and recited that “This note and mortgage with the same are given for the purpose of securing J. C. Houser, for any or all [353] notes which he has heretofore' endorsed for E. E. Miller.” Endorsed upon the back: “Oct-2-1911, for value received I hereby guarantee One thousand dollars of this note. J. E. Smith.” Houser testified that during all the time in question J. E. Smith was the acting cashier and that the maj ority of the transactions he had with the bank were through Mr. Smith. It is contended by counsel that except a few opinions and conclusions there is no evidence anywhere that the hay was sold to the bank. But from the statements which Houser testified were made to him by the cashier it might well be believed, in the absence of convincing-testimony to the contrary, that it was really a transaction with the bank and not with the cashier, Smith, and while the evidence of this character and to this effect was somewhat meager, its weight and sufficiency were for the jury along with all the other testimony in the. case, and it was error to disregard it and direct a verdict. The judgment is therefore reversed and a new trial ordered.