84 N.W. 373 | N.D. | 1900
This case must turn upon a question of fact. It was tried by the court below, and is triable de novo here. Plaintiff sues upon a negotiable promissory note, as indorsee. Defendant pleads an inherent equity in - the note, and alleges that plaintiff took it with notice of such equity. He succeeded in reducing plaintiff’s recovery by the amount of such equity. The trial court found that plaintiff took the note with knowledge, and upon that question of fact the case hinges. On March 6, 1896, the defendant, Baldwin, purchased a half section of land from the Security Trust Company at the agreed price of $4,500. He executed to the grantor five promissory notes for $500 each, and two notes for $1,000 each, taking a contract for a deed. The two notes last mentioned represented two mortgages then upon the premises, for $1,000 each, which Baldwin was to pay as a part of the purchase price. One of the mortgages would mature late in the year 1896, and the grantor, by parol, agreed to get that mortgage extended for four 3'ears, or until 1901. A written memorandum showing that such extension was to be made was entered in the loan register of the Security Trust Companv. The home office of this corporation was at Nashua, N. H., but the AVestern office and principal place of business was at Grand Forks, N. D., and the transaction in question was had at the latter office. In June, 1896, the North Dakota Milling Company executed and delivered to the Security Trust
It is conceded that at this time the plaintiff, Gregg, was the president of the Security Trust Company, and a member of the executive board thereof, and that the transactions of' the company, such as the sale of lands, were always intended to be, and as a rule were, submitted to and discussed in detail by the executive board, sitting at the home office of the company, in Nashua, N. H. It is urged that these facts raise a presumption of actual knowledge on his part. We may grant that such a presumption arises. Its force is not great, under the circumstances. It appears that the written contract with defendant was detained in the Western office. The register of loans was, of course, in that office. If the contents of the contract were transmitted to the Eastern office, that alone, without the memorandum upon the loan register, would convey no intimation of any agreement for extension. We have no reason to suppose that plaintiff or the executive board was ever apprised of that memorandum entry. The Security Trust Company was engaged in making loans upon real estate. The memorandum was simply a reminder that a loan was to be made upon that tract of land at a future date at 7 per cent, interest. Naturally the matter would not be reported until the loan was made. There is in the evidence Mr. Gregg’s clear and emphatic statement that he knew nothing about such an arrangement. That statement is contradicted only by the circumstances already stated. In our minds, they are far from sufficient to overcome positive testimony.
But respondent insists chiefly that plaintiff must be charged with knowledge by reason of the knowledge of his agent. In the spring of 1896 one Russell was sent from its home office, as agent of the Security Trust Company, to investigate the condition of the Western office, and' report the same to the home office. He had full authority to examine all books and papers in the Western office, and to investigate the value of all securities held in that office. The business of the office was at that time large, and loans aggregating about $1,-000,000 were then outstanding. The agent, Russell, entered upon the discharge of his duties, and continued therein until in June, 1896, when he and Mr. Clifford, an officer and general Western manager of the Security Trust Company, went East. The contract with Bald
In the case at bar the respondent relies upon, the fact that Russell must have received knowledge of the details of the transaction between defendant, Baldwin, and the Security Trust Company after March 6, 1896, the date of such transaction, and prior to the time he went East, in June, 1896; and he urges that this fact furnishes strong evidence that the knowledge was present in Russell’s mind when he acted as plaintiff’s agent in selecting the collateral notes. That it is a circumstance of weight must be admitted. Its weight would be greater were the Baldwin transaction an isolated one, or one of a few. The evidence shows that it was one of many, — presumably, several hundred. Russell was examining them for the purpose of making a final report thereon. The evidence shows that he made memoranda concerning each transaction. He did not trust to memory. He knew that the details of so many transactions could not be carried in the mind. He testifies positively that at the time he selected the collateral notes there was no knowledge or notice present in his mind of any agreement or understanding upon the part of the trust company to procure an extension for Baldwin. His conduct corroborates his testimony. He was at that moment the agent of plaintiff. To him he owed, the first duty. He was bound to select valuable collateral. He savs he selected the Baldwin note because he knew Baldwin’s reputation as a business man. Certain it is that,
We have decided this case along the lines upon which it was presented by counsel. No claim is made that the offset would not be proper if plaintiff took with knowledge. The District Court of Grand Forks county is directed to so far modify its former judgment herein as to render judgment in favor of plaintiff and against defendant for the full amount of the one note for $500 and interest as therein provided, with costs of both courts. Modified and affirmed.