The Salt Lake herald-Republican. [volume] (Salt Lake City, Utah) 1909-1918, 1910-08-28
MUST PAY NOTE
TO COVER THEFT
Joseph Nelson, Former Cashier
of Utah National, Loses
His Suit.
SUPREME COURT RULING
Justices McCarty and Prick Hold
There Was Consideration in Ex-
ecution of Paper.
SUPREME COURT RULING

Joseph Nelson who was cashier of
the Utah National bank at the time
when S106, ESQ was stolen from the re-
serve chest OF the bank in the winter
OF lS07-l908, must pay the note of
SiS,25O which he executed after the
theft was discovered, and which, with
$4,000 cash contributed by President
W. 5. Mccormick for the same pur-
pose, was delivered To the bank in or
der 10 protect the institution
This, in effect, is the decision hand
ed down by the supreme court yester-
day in an opinion written by Justice
W. NJ. McCarty. Justice j. E. Frick.
In separate opinion, cOncurs, and
Chief Justice ID. y. Straup dissents.
As set forth in Justice McCarty's
opinion confirming the decision OF the
lower court, the substance of the case
IS as follows.
January u. 1903. it was. discovered
that Sl06,250 was missing" from the
vaults of the bank. W. s Mccormick.
president OF the bank, owned 1000
shares of the banks stock, and Joseph
Nelson owned fifty shares. Soon after
the loss was discovered Nelson and
Mccormick held conferences over the
matter, in which they agreed that un-
less they took immediate and secret
action 20 replace the money so as TO
bring the reserve fund up TO the legal
requirement before the books could
be examined by the national bank eX-
aminer, the comptroller OF currency
would close the bank, and if the public
became aware of the condition il
would result in a run" on the bank.
They decided that il must be kept Sc
cret from the directors and stOckhOld-
ers as well.
Nelson Gives Note.
Mr.. Mccormick insisted that Nelson
should put up S13,25G, and he agreed
to put up $4,000 to make up the de-
ficiency in the reserve fund, and these
sums, with $4,000 from the surplus
fund OF the bank. would make up the
S106,250. T. r. Cutler, vice president
of the bank, was called in as arbi-
traitor. and he decided that. in case the
thief was discovered and the money
restored to the bank, Nelson should
have One-half of his S13,25O before
Mccormick received any portion of his
$4,000 The note given by Nelson
provided for payment in thirty days,
with interest at per cent. and 10 per
cent additional in case the note was
collected through an attorney.
Nelson refused 10 pay the note,
claiming that he had received no con-
sideration or service of value for the
money. Suit was brought by the Utah |
National bank for collection and the |
trial in the district court, before Judge |
George G.. Armstrong, resulted in a |
verdict for the bank. Nelson there |
upon appealed to the supreme court.
Consideration is Shown.
Justice McCarty holds that. mas
much as the payment of $4,000 by /
and S13.25O by Nelson /
saved the bank from probable ruin
and added 10 the value of the stock /
held by both the president and cashier
IF the bank. this constituted a consid-
Grafton for the note given by Nelson.
He also expresses the opinion that
he note itself is prima facie evidence
hat it has been given for a consider
alton.
Justice McCarty also holds that the
S63.25O advanced by Mccormick and
Nelson to cover up the theft was ad-
sanced with the understanding that it
should be repaid 10 them by the bank
)nly in case the stolen money was re-
covered or the stockholders volun-
arily decided 10 reimbur them. Con-
,erning Nelson's liability for the theft,
Justice McCarty says that the cOndi-
ion on which Nelson executed the
lOte was that Of a compromise for his
liability To the bank for at least a part
II the money stolen.
Part of Assets.
Justice Frick. in concurring. says
he amounts agreed to be paid by Me-
cornick and Nelson We're To be d part
# the banks assets, and. by the pay
nent. the banks assets were made
good, and they accomplished what
hey intended to accomplish in pre-
'enting the failure OF the bank
Chief Justice StTaup, in dissenting.
ays: Appellant urges that the ulti-
nate fact of consideration was not
ound, and that the evidence is insult
icient TO show a good or valuable
l think the appellant
5 entitled to prevail in both cOnten-
ions" calling attention 10 the fact
hat the very thing on which McCor-
lick and Nelson disagreed was the
manner in which their payments
would be refunded, either when the !
1O6.25O was recovered or the stock
folders of the bank were induced TO
make the S63,250 good. He said the
'ayments were made simply TO tide
he bank over until the money was re ,
overed or the stockholders could be
allied together TO refund the S63.250. j
All the circumstances taken together
re inconsistent with and exclude the