| Minn. | Oct 3, 1892
This action was tried by the court, and from its findings tüe following facts appear: One P. F. Pratt was during all the time, from the year 1883 until after January 16, 1889, the cashier of the First National Bank of Anoka, which bank, through its cashier, had, during all that time, transacted a large amount of business with the plaintiff.
On September 17, 1888, one Maria B. Nell had executed her promissory note to the First National Bank of Anoka for $5,000, with interest payable in four months from date without grace; and September 27th following, the plaintiff discounted this note, and paid the face value thereof, less the usual discount, to the First National Bank of Anoka, and the same was thereupon indorsed, and delivered to the plaintiff, and the Anoka bank thus became conditionally liable thereon as indorser. Afterwards, on the 16th day of January, 1889, the day before this note became due, the maker thereof, Mrs. Nell, executed another promissory note, payable to Pratt, whereby she agreed to pay to his order, six months thereafter, the sum of $10,000, with interest at 10 per cent., payable at the plaintiff’s bank in St. Paul. The court further specifically finds as follows: That thereafter, on the 16th day of January, 1889, the day before the first-named note became due, Pratt appeared at the bank of the plaintiff with the last-mentioned note for $10,000, with the following indorsements thereon, all made in his handwriting: “P. F. Pratt;” and “First National Bank of Anoka, P. F. Pratt, Cr.,” — which was his usual way of signing his name as cashier of the Anoka bank. Plaintiff knew that all the indorsements were in the handwriting of Pratt, who then requested the officers of the plaintiff bank to discount the note
It is also found that “the plaintiff [meaning its officers] in good faith believed that said Pratt was acting as cashier of said bank in said transaction, and had no evidence to the contrary, and no reason to believe anything to the contrary, except what appeared by said .proceedings, and said notes hereinbefore specified; that said plaintiff .gave credit to said First National Bank of Anoka, and not to said Pratt, in all of said transactions.” “Both of said notes were made by said Nell, and by her delivered to said Pratt, for his individual use and accommodation; but plaintiff had no notice or knowledge thereof, except as shown by the notes themselves, until after it had •discounted them.”
The principal question presented on this appeal is whether the .facts found by the court warranted the conclusion that the Anoka ■bank is liable upon the note as indorser, the same having been duly protested.
It is not assigned as error that the findings of the court above •quoted are not sustained by the evidence, and the foregoing statement contains all the material facts embraced in the findings hearing on the defendant’s liability, so that, if there were any other facts •or circumstances affecting the question of the plaintiff’s good 'faith in the purchase of the note, they cannot be considered here.
The defendant insists that the plaintiff’s cashier, who discounted the note in suit, was not justified upon these facts in supposing that Pratt was acting officially, as cashier of the Anoka bank, in procuring the money on the note; and that Pratt’s statements or conduct in the transaction were immaterial, in view of the fact that the note
In view of the fact that Pratt was the acting cashier of the Anoka bank, entitled to make indorsements in this form of paper belonging to the bank, and presented himself in that capacity in this instance, the discussion is substantially narrowed down to the question whether the paper itself bore marks of suspicion sufficient to affect the title of the plaintiff as a purchaser in good faith, which upon the facts would otherwise be presumed. But in determining this case we cannot separate the different parts of the transaction, and consider the paper apart from the circumstances under which it was presented. Pratt assumed to be acting in his official capacity, and appeared to be engaged in the business of his bank.
He proposed to take up the note which he had before rightfully negotiated in behalf of' the bank as cashier, and to substitute another executed by the same party. And the cashier of the plaintiff bank, as the court finds, in good faith believed that Pratt was acting officially for the Anoka bank, and the evidence sustains this finding. If the new note had been of the same amount as the old one taken up, the fact that it ran to Pratt would hardly be claimed to be sufficient to excite suspicion. And so, if the note had been subsequently negotiated by plaintiff, and had passed in the regular course of business into the hands of a remote indorsee, it would hardly be claimed that such indorsee was not a bona fide purchaser, either on the ground of notice from the note itself, or that he was bound to have instituted a preliminary inquiry as to the authority of Pratt to make the second indorsement as cashier. The fact that Pratt appeared to be the first indorser, and the bank the second indorser, was not, of itself, a circumstance so extraordinary or suspicious as to make the case one of gross negligence on the part of the plaintiff, and subject it to the imputation of bad faith in receiving the paper. Nor, in the face of the finding of the good faith of the officers of the plaintiff in the transaction, did the circumstance that the surplus, over the amount due upon the old note, was paid directly to Pratt, either in currency or by check running to him, amount to notice of
A stricter rule would seriously embarrass the transfer of negotiable paper.
Upon the findings of fact in the case, we think the legal conclusion reached was proper, and the order denying a new trial is affirmed.
(Opinion published 53 N. W. Rep. 178.)