The plaintiff is trustee in bankruptcy of the copartnership, Kiefer Brothers'" Banking Company, composed of Adam, John and W, H. Kiefer, and, as such, brings this action on a promissory note of $880, dated April 25, 1910, payable 10 months thereafter, with interest at the rate of G per cent per annum. This note was executed by defendants with John Kiefer to the Gaylor-Kiefer Realty
“A controversy having arisen as to whether one half of said 640 acres was of any value whatever, and these defendants making claim that said one half was worthless and should not be paid for, the said realty company agreed in writing, which is attached hereto, by copy, as a part hereof, and marked Exhibit A, to convey to these defendants 160 acres, in settlement of said controversy. Defendants allege that said realty company has failed to make such conveyance, and that the said 160 acres of land was and is reasonably worth at least the sum of $5,440, no part of which has been paid these defendants, nor has anything been done in any way to indemnify these defendants on account of the failure to convey said 160 acres.”
It was further alleged that Adam. Kiefer was at all times a member of the banking company; that said company, at the time of acquiring the note, had full notice and knowledge of all the matters pleaded. By way of amendment, these defendants say that:
“As to all the transactions heretofore recited, said Adam Kiefer had full knowledge, and that he was actively engaged in the conduct thereof; that, after the note now in suit, together with the two others, had become the property of the Kiefer Brothers’ Banking Company named in the title hereof, the said Adam Kiefer, on behalf of the said banking company, orally agreed with these defendants that the sum of $6,000 which had been realized from the sale of
They further alleged:
• “That the sums realized from the said sale had come into the possession of the said Kiefer Brothers’ Banking Company at and before the time when the said oral agreement to make the endorsement was so made; * * *
“That the said Kiefer Brothers’ Banking Company, acting through said Adam Kiefer, orally agreed to make the said endorsement for and in consideration of thereby becoming the owner of and subrogated to .all the rights and claims that these defendants then had, or had theretofore liad, against the said original payee of said notes.”
Kortemeyer & Oo. Las Vegas, N. M.
1909
June 30, Balance above........................$2,301.63
July 30, Geo. A. Fleming, Ins................... 32.00
May 10, Int. on $2,336 ........................ 176.72
Plowing 80 a. $2.50........................ 200.00
Well equipment ........................... 110.65
Balance (red ink) ........................... 5,236.
$8,300.00
W. 0......................................... 1,990.25
C. Balunler ................................... 1,990.25
A. K. ..:...................................... 1,990.25
[Other side of ledger.]
Feb. 1. 10 By large nuiles ...................$ 450.00
Feb. 1. 10 By small mules ................... 250.00
Feb. 1. 10 By 160 a. land ..................’. 2,000.00
Apr. 1. 10 By 160 a. land.................... 2,400.00
Apr. 1. 10 By 160 a. land ................... 3,200.00
$8,300.00
Sept. 1. 10 160 acres sold ...................$2,400.06
Int. on $5,236 from April 23 to Feb. 1, ’ll.... 265.00
Int. on $2,000 to Feb. 1, ’ll................ 60.00
The above account, below the figures $8,300, on both sides of the ledger, is in pencil marks. Adam Kiefer testified that the account was what it purports to be, and that the letters W. A. K. represented Kortemeyer, C. B. represented Balunler, and W. O. represented Ozias, and that the lower part indicated the amount to which each was entitled out of the deal on the New Mexico land; that they were made after the land was sold and “aftpr we knew what the price was to be;” that the entries were estimates of what each one would get. In answer to a question as to the object of putting down the items, he answered:
“These figures were put down there to determine as to what the syndicate would have, each of us, when this settlement was made and the land sold according to our agreement, just what it could be sold for, and those mules were bought at the time these parties went down to improve the land.”
“Q. Did they (defendants and Adam Kiefer) at any time receive the item of April 1, 1910? A. Not on that date especially. * * These figures were put there for the purpose of determining the amount due each member of the syndicate, that would show the amount due the syndicate divided up into four parts, with these other credits below that would indicate the amounts assigned to each party .of the syndicate. * * * When those pencil entries were made in this account, it had been represented to us that this New Mexico land had been sold for a certain price. Mr. Earle Kiefer, of the Gaylor-Kiefer Realty Company, made that representation — represented that to our syndicate — and those figures were put down there upon that representation as made by him, supposing his representations to be true. At this price so represented by Earle Kiefer, the Gaylor-Kiefer Realty company would have been owing to each of us the sum of $1,990.25. * * * •Q. And there is nothing on these books that shows that they ever paid a cent of that money, is there? A Not through their own hands. * * * Q. And after they sold it, the Gaylor-Kiefer Realty company owed to your syndicate these several sums of money here? A. Yes, sir. Q. But you haven’t got anything to show that they ever paid them, have you ? A. Not in separate amounts.”
On redirect examination, the witness was asked, referring to the upper portion of the account:
“Q. Oh, that makes the four quarters, and then interest on $5,236 from April 2 — $265, again interest on $2,4.00 to Feb. 1, 1911, $60; now, did those represent any payment of money with Kiefer Brothers’ Banking Company —Kiefer Brothers’ Banking Company get any money from that syndicate such as is entered there ? A. Well, not just those amounts.”
“Q. Did that syndicate ever pay to the Kiefer Brothers’ Banking Company that $3,064 in cash — this amount hero represented in this cash transaction? A. Why, if it was paid in, it was paid in by the Gaylor-Kiefer Realty Company through the various items in their account. Q. Yes? A. It might have been reckoned in their account.”
It will be noted that the witness does not deny that the banking company had received from the realty company the proceeds of the New Mexico land, but admits that it might have been paid in and entered, in the realty company’s account. The statement of the account is inconsistent with his explanation, and the circumstance that credits appear for sales at different times and that interest on sums on hand is computed arid credited, is strongly corroborative of Kortemeyer’s testimony of Kiefer’s repeated admissions that the banking company had received the money. The evidence has convinced us that the banking company received the $6,000 belonging to these defendants, and, though promising to endorse the sum on their notes, failed to do so.