144 Iowa 251 | Iowa | 1909
On July 24, 1907, the First National Bank of Chariton was engaged in business under the national banking act at Chariton, Iowa. At the same time, and for some time thereafter, the Bussell Bank was a partnership engaged in the conduct of a private banking business at Russell, Iowa. F. B. Crocker, the cashier and manager of said national bank, was also a partner with one Brandon in the ownership and control of the Russell Bank; Brandon, with the assistance of employes, having the immediate charge of the business. On the date above named, as was subsequently revealed, the national bank had been subjected to great loss and depletion of its assets by the defalcation and fraud of Crocker, but this condition was concealed, and did not become public until about October 31, 1907, when Crocker committed suicide, and the bank’s insolvency was made known. On the date named J. A. McKlveen, having no knowledge or notice of the true condition of said bank, and believing it to be sound and solvent, deposited therein the sum of $1,000, receiving therefor a certificate in the following form:. “The First National Bank of Chariton. Not subject to check. Chariton, la., July 24, 1907. Certificate of deposit. Dr. J. A. McKlveen has deposited in this bank one thousand dollars, payable to his order on demand, upon the return of this certificate properly indorsed. $1,000. No. 90,483. W. B. Beem, Assistant Cashier.” On the back of this instrument there appears a printed paragraph or statement in the following form: “Interest Agreement. This certificate will draw three per cent, interest per annum if left six months; no interest if drawn before six months. No deviation in any case from
The indorsers admit the facts as hereinbefore stated, but deny liability on two grounds: First, that said certificate is an instrument payable on demand; that to charge the indorsers thereof presentment and demand of payment and notice of nonpayment were required to be made within a reasonable time after the date thereof, and that said Bussell Bank and its receiver did not make such presentment and demand, or give the indorsers notice of the nonpayment of the certificate within a reasonable time; and, second, that the Bussell Bank and its receiver are estopped to assert any claim, because the partnership owning and controlling said Bussell Bank was charged with notice of the failing condition of the national bank, and of the necessity of the
It is due to counsel that we advert to his suggestion that, as we have held in Elliott v. Bank, 128 Iowa, 275, that the statute of limitations does not begin to run upon an ordinary certificate of deposit until demand and refusal of payment, it follows of logical necessity that the liability of the indorser of such certificate continues in full force until the paper is matured by such demand. But wé cannot concede the correctness of the analogy or of the deduction sought to be made. The holder of such paper may delay the demand unreasonably as respects the rights of the indorser, whose liability is contingent only while the delay in no manner prejudices the maker, whose liability is original and absolute. Bor the protection of the former the statute, as we have seen, provides that presentment and notice of nonpayment of such paper, in order to bind him, must be made within a reasonable time after “its issue.” The holder must act within that limit if he wishes to retain the benefit of the indorsement.
II. The • conclusion reached in the preceding paragraph of this opinion renders it unnecessary to discuss or pass upon the alleged errors as to tire findings and rulings of the trial court on the issue of estoppel. The question as to the extent to which the Russell Bank and its receiver are bound by the knowledge of Crocker is one not in all respects easy of solution; and, there being no present necessity for entering that field of inquiry, we shall not attempt it.
Bor reasons stated in the first paragraph of the opinion the judgment of the District Court is affirmed.