#### Bank of Monticello, Respondent, vs. Dooly, imp., Appellant.

*February 24*—

March *11, 1902.*

*Promissory notes: Statutes: Banks and "banking: Cashier's note: Accommodation indorsers: Authority of cashier: Discounts: Consideration.*

1. Under sec. 1675 — 50, ch. 356, Laws of 1899, providing that every negotiable instrument is deemed *prima facie*to have been issued for a valuable consideration; and every person whose signature appears thereon to have become a party thereto for value, the introduction in evidence of a negotiable note establishes *prima facie*that it was given for value, and that every maker and indorser appearing thereon have signed for value.

*2.*General authority to a bank officer *to make*discounts does not authorize him to hind the bank by discounting notes to which he is a party.

;3. The directors of a bank, on examining its loans, found a note payable to D. and signed by its cashier as a joint maker. On the cashier’s attention being called thereto, he stated that D. had agreed to indorse it, and D., having been called in, indorsed the note. *Held,*that when the note was found among the notes turned over by the cashier as cash or collateral, it was *prima facie*proof that the cashier had advanced the bank’s money upon a note to which he was a party, and hence that the bank had not bought the note prior to the directors’ meeting.

4. In such case D. having signed the note for the purpose of meeting requirements imposed by the bank’s directors before they would consent to purchase the note, the original consideration advanced by the bank attached to the transaction, and it was immaterial that no money passed directly to D.

*591Appeal from a judgment of tbe circuit court for Green county: 33. E. DuNwiddie, Circuit Judge.

*Affirmed.*

Tbis is an action against tbe defendant *Dooly*and one Brisk upon a joint and several promissory note for $1,000, dated March 11, 1901, signed by one J. B. Sears (now deceased) and tbe defendant Prisk as makers, payable September 1, 1901, to tbe order of tbe' appellant Dooly, and indorsed in blank by *Dooly.*Tbe complaint is tbe ordinary complaint upon a promissory note against tbe maker and indorser. Tbe defendant Prisk answered separately, but does not appeal from tbe judgment; bence it is not necessary to state bis answer at length. Tbe defendant *Dooly*answered separately, alleging that be bad no knowledge or information as to tbe execution of tbe note, and that on tbe 11th of March, 1901, and up to tbe 20th of April, 1901, one J. P. Sears, now deceased, was the cashier of tbe plaintiff bank. Further answering, tbe defendant *Dooly*denies that be ever indorsed or delivered said note to tbe plaintiff for value or to procure credit, and alleges that be knew nothing of said note until tbe 20th of April, 1901, when tbe plaintiff represented to him that it owned said note, and that it would be necessary for tbe defendant to indorse tbe same in order to confer title on tbe plaintiff, and that upon such request, and for tbe sole accommodation of tbe plaintiff, the defendant *Dooly*indorsed said note for tbe purpose only of conferring title, and without receiving any consideration or value therefor. Tbe action was tried before a jury. Tbe plaintiff introduced tbe note and rested. Thereupon tbe defendant introduced tbe testimony of one Humiston, tbe vice-president of tbe plaintiff bank, and proved by him that Sears was cashier of tbe bank up to April 18, 1901, on which day a directors’ meeting was held, and tbe loans of tbe bank were examined by tbe full board of directors ; that among tbe notes held by tbe bank which were examined by tbe board was tbe note in question, signed by Prisk and Sears, but not then indorsed by *Dooly;*that be *592(Humiston) called Sears’ attention to the note, and Sears said tbat *Jim Dooly*bas to sign tbat note. He said it was a three-cornered deal, and *Jim Dooly*bas to sign it, — bas to go on tbat note witb us. Being asked wbat there was about tbe note tbat specially attracted bis attention, be said, tbe size of tbe note, tbe amount of tbe note, and tbe signatures. Tbe court then asked, “Wbat is tbe purport of tbis testimony?” and Mr. Becker, defendant’s attorney, replied, “I want to prove tbat Mr. Sears was requested by tbe officers of tbe bank to bave *Mr. Dooly*come and indorse the *note.”*Plaintiff’s counsel tben said: “We concede tbat *Mr. Dooly*was called in to go on tbis note.” *Mr. BecJcer:*“Do you concede tbat be said it was a tbree-cornered affair ?” *Mr. Jeffreys:*“It was a tbree-cornered affair.” *Mr. Beclcer:*“All right.” Defendant was tben called on bis own behalf, and said tbat be knew nothing of tbe note until tbe 19th or 20th of April, 1901, when be put bis name on tbe back at tbe Bank of Monticello. Being asked at whose request, and whether be received any consideration for bis signature, the court ruled tbat if tbe request was by Mr. Sears (who bad been shown to be dead at tbe time of the trial), tbe testimony could not be received. Thereupon Humiston was again called, and it was shown by him tbat at tbe directors’ meeting on tbe 18th of April be told Sears to call *Dooly*in and bave him sign tbe note; that be did tbis because tbe directors did not consider tbe note good without *Dooly’s*signature, and be told Sears tbat if *Dooly*signed it would be all right; tbat be never saw any money banded to any one for tbe note; and tbat tbe cashier, Sears, turned tbe note over to tbe bank as cash or collateral. One Breylinger; who bas been cashier of tbe plaintiff bank since April 18, 1901, was called as a witness, and testified tbat *Dooly*signed tbe note in tbe bank on tbe 18th of April; tbat Sears was asked to bave *Dooly*sign the note, and went out, and came back again witb *Mr.*Dooly, and tbat *Dooly*came up to the desk, read it, wrote bis name on tbe back, and banded it to *593Mr Sears; that be did not know wbetber the bank ever paid *Mr. Dooly*or any other person any consideration for indorsing the note. The court rejected all testimony tending to show that *Mr. Dooly*received no consideration at the time he signed the note. At the close of the evidence the court directed a verdict for the plaintiff for the amount of the principal and interest due upon the note. The defendant made a motion for a new trial upon the minutes of the court, which was overruled, and judgment was entered upon the verdict, and the defendant appeals.

Eor the appellant there was a brief by *J. M.*Becker, attorney, and *J. L.*Sherron, of counsel, and oral argument by *Mr. Becker.*

Eor the respondent there was a brief by *Golin W. Wright*and *Fethers, Jeffris &*Mouat, of counsel, and oral argument by *Mr. Wright*and *Mr. M. G. Jeffris.*

WiNsnow, J.

The court was plainly right in directing a verdict for the plaintiff. The note was a negotiable note. When the plaintiff introduced it in evidence, it had made *prima facie*proof that it was given for value, and that every person whose signature appeared thereon had signed for value. Negotiable Instruments Law (Laws of 1899, ch. 356, sec. 1615 — 50). The defendant attempted to meet the case so made by showing that *Dooly*did not sign the note until after it had been purchased by the bank, and then that he received no consideration for his signature. But in attempting to make this proof, he showed affirmatively that the note had never been purchased or discounted by the bank until after he put his signature thereon. The note was signed by Sears, the cashier.' It is not shown that Sears had authority from the board of directors of the bank to discount notes. Even had he possessed such authority as to the notes of third persons, he could not bind his bank by discounting his own note. General authority to a bank officer to make discounts does not author*594ize Mm to bind tbe bank by discounting notes to wbicb be is a party. Tbis limitation is absolutely necessary for tbe protection of tbe bank and tbe important interests wbicb are intrusted to it by tbe business community. *Rhodes v. Webb,*24 Minn. 292; Bolles, Bank Officers, §§ 161, 476, 494; 1 Morse, Banks, § 173.

Wben tbe directors of tbe bank examined its loans and discounts on tbe 18tb of April, 1901, they found among tbe notes wbicb tbe casbier turned over as casb or collateral tbe note in question. Tbis is certainly *prima facie*proof that tbe casbier bad advanced tbe bank’s money upon tbe note. There is no proof to tbe contrary in tbe case, either received or offered; hence it must be considered as a fact. Tbis being tbe fact, and it being the law that tbe casbier could not bind tbe bank by discounting bis own note, it necessarily results that the bank bad not bought tbe note prior to the directors’ meeting, and that wben tbe directors met on tbe 18 th of April they could refuse to receive tbe note altogether, or they could require additional signatures before receiving it; and any one who signed for tbe purpose of'meeting such a requirement would be bound, upon tbe plainest principles, and it would be entirely unnecessary for any new consideration to proceed from tbe bank to such signer. His signature would be a part of tbe original transaction, and one of tbe conditions upon wbicb, only, tbe bank consented to purchase tbe note at all. It appears without dispute that this was just what occurred in tbe case before us. Tbe bank directors, finding tbe note among tbe bank’s discounted notes for wbicb money bad been advanced, refused to accept it unless indorsed by *Dooly,*and *Dooly*indorsed it. Tbe original consideration advanced by tbe bank attached to tbe transaction, and it is immaterial that no money passed directly to *Dooly.*Hence, irrespective of all questions of evidence, the judgment must be affirmed. Under tbe admitted facts, tbe judgment was right, and none of tbe evidence offered could affect tbe case, bad it been received.

*By the Gowrt.*— Judgment affirmed.