144 Iowa 203 | Iowa | 1909
The note in suit is for the principal sum of $1,000, payable March 1, 1903, and is signed by II. B. Kreger, E. E. Smith and A. L. Palmer; the first named being the principal debtor and the last two his sureties. Kreger, though named as a defendant in the action, was not served with notice, and has not appeared thereto. The sureties make defense, denying liability on the note, and plead matters by which they claim plaintiff is estopped from maintaining the action. These grounds, stated as briefly as practicable, are as follows: Eirst, that they were deceived and misled into becoming sureties for Kreger by the fraudulent misrepresentations of the bank, acting by its cashier, in representing Kreger to be solvent and safe, when in fact he was insolvent, and already indebted to the bank in large sums; second, that after the note became due, and they learned of Kreger’s financial straits, they informed the bank that Kreger had title to or an interest in certain land in Minnesota, against which they would immediately begin legal proceedings to protect themselves from loss, whereupon the bank by its cashier proposed that it would itself at once proceed to enforce the collection against said property, and defendants need not give themselves further trouble about
is concerned, there was a well-defined conflict in the testimony, and the verdict of the jury thereon cannot be said to be without sufficient support. It is argued; however, that, whatever may be the fact in this respect, the cashier is not shown to have had authority to bind the bank in said matters, and that the bank cannot be estopped by his‘conduct. Without now entering into any discussion of the general power and authority of a bank cashier,' we are quite clear that, in the absence of special restriction known to the party with whom he deals, the apparent scope of such authority is broad 'enough to include the acts and agreements alleged by the defendants in this case. As a matter of common knowledge the cashier is ordinarily the active financial manager and agent of the bank. Tie is the one officer who as a rule is always present during business hours, exercising actual and immediate supervision of its affairs. He is the officer with whom the customers of the bank come most frequently in contact. Among other things, it has been held' that he may compromise, a debt due the bank; U. S. v. Bank, 21 How. 356 (16 L. Ed. 130); Young v. Hudson, 99 Mo. 102 (12 S. W. 632); Corser v. Paul, 41 N. H. 24 (77 Am. Dec. 753); Stebbins v. Lardner, 2 S. D. 127 (48 N. W. 847); Bank v. Hick, 73 Mo. App. 354; may institute suits and attachment proceedings in the name of the bank; Bank v. Whitmore, 40 Hun (N. Y.), 499; may em
It is not denied that the bank held several unsecured notes against Kreger in addition to the note in suit, which it was naturally and properly anxious to collect or secure. Hnder such circumstances it was also both natural and proper that it should desire to reach and subject Kreger’s land to the payment of its claim as far as it might legitimately be done. As this land was the only fund or source in sight from which there was any prospects of making a collection, it was obviously to the advantage of the bank to proceed itself to sue out an attachment for the entire indebtedness, rather than to have the sureties upon this one note proceed independently. If then, under these conditions, upon being informed of defendants’ intention to proceed against the land, the cashier said to defendants that they need go no farther, and the bank would bring the suit and protect them against loss, at the same time concealing from them the existence of the bank’s claim over and above the one on which they were sureties, leaving them to believe that whatever was derived from a sale of said land would be first applied to the payment of the debt for which they were liable, we think that such representations and agreements were within the apparent scope of his authority, and if defendants, relying thereon, refrained from further action, and allowed the bank to proceed to exhaust the only means by which they could have protected themselves, the bank will not be heard to deny the power of the cashier in that respect, or to assert the right to apply the sum thus realized first to the payment of the unsecured debts of Kreger. To do otherwise would be to relieve the appellant from the most ordinary obligations of good faith. Owens v. Stapp,
„3. Same: fraudulent representations : evidence. III. The court by its charge submitted to the jury the question whether the defendants Smith and Palmer were iriduced to become sureties upon the note in suit by the false and fraudulent representations of plaintiff’s * *• cashier as to the financial standing and responsibility of the principal maker, Kreger. A careful study of the record leads us to the conclusion that there is no evidence found therein on which the jury could have properly found for the defendants on this branch of the defense, and that the submission of that issue was prejudicial error. The only testimony as to representations of any kind has reference to conversations had in a general way with the cashier three or four weeks before the note was given. In these conversations Kreger’s name was mentioned, and the cashier stated Kreger had plenty of money yet, and had gone away from Wellman with $1,000, had invested it in land, and land had been advancing in price, and he seemed to be all right.. At the time of this talk Smith and Palmer had not been requested to become sureties for Kreger, and so far as appears that transaction was not in contemplation by either party. It was not until three or
VII. Exceptions were preserved to several rulings upon the admission of evidence, but we find none which are not governed by familiar rules of law and none that we deem erroneous.
Other points made in the argument are too numerous to permit of their consideration separately without prolong
Nor the error mentioned in the third paragraph of this opinion a new trial must he awarded. — Reversed.