Case Name: UTAH NATIONAL BANK OF SALT LAKE CITY v. NELSON
Court: Utah Supreme Court
Jurisdiction: Utah
Decision Date: 1910-08-27
Citations: 38 Utah 169
Docket Number: No. 2102
Parties: UTAH NATIONAL BANK OF SALT LAKE CITY v. NELSON.
Judges: 
Reporter: Utah Reports
Volume: 38
Pages: 169–218

Head Matter:
UTAH NATIONAL BANK OF SALT LAKE CITY v. NELSON.
No. 2102.
Decided August 27, 1910.
Rehearing Denied November 22, 1910
(111 Pac. 907).
1. Bills and Notes — Action—Pleadino—Consideration. Under Comp. Laws 1907, sec. 1576, providing that every negotiable instrument is deemed prima facie to have been issued for a valuable consideration, in an action on a note, it is not necessary to allege or prove a consideration to make out a prima facie case. (Page 177.)
2. Bills and Notes — Action—Findings—Consideration—Necessity. Since a consideration need not be alleged or proved to make out a prima facie case in an action on a note, if defendant does not affirmatively allege want of consideration, a finding of consideration need not be made. (Page 178.)
3. Bills and Notes — Findings—General Findings' — Sufficiency. In an action on a note, where the answer alleged generally that it was without consideration, a general finding that it was executed for a valuable consideration, received by the maker, negatived the affirmative allegation of the answer and was sufficient to support a verdict for plaintiff. (Page 179.)
4. Trial — Findings—Ultimate Facts — Conclusions oe Law. A finding that the note sued on, alleged generally by the answer to have been executed without consideration, was delivered for a valuable consideration, was a finding of an ultimate fact and not a conclusion of law. (Page 181.)
5. Bills and Notes — Actions'—Sufficiency of Evidence. In an action on a note executed by defendant, the cashier of plaintiff bank, wbicb, together with a sum advanced by the president, was deposited in the bank to make up a defalcation and prevent a run on the bank, evidence held to show that such officers did not regard the amount advanced as a loan to the bank, to be returned regardless of whether the money stolen should be otherwise replaced. (Page 184.)
6. Contracts — “Consideration.” There is a sufficient consideration for a promise whenever the act of the promisee results in a benefit to the promisor, or at his request, to a third person, or imposes a loss or inconvenience, or obligation on the promisee at the instance of the promisor, though no advantage result to him. (Page 185.)
7. Bills and Notes — Consideration—Promise for Third Party. Defendant, the cashier of plaintiff bank, executed a note, which, together with a sum advanced by the president, was deposited as a part of the bank’s assets, to make up the amount of a defalcation. While the principal purpose in making the deposit was to prevent a run on the bank, it appeared that the president would have refused to advance the amount advanced by him if defendant had not agreed to advance the amount of the note. Held, under the rule that, where a promise is made between two parties for the benefit of a third, an action will lie thereon by the party to be benefited, that the execution of the note by defendant was supported by a sufficient consideration so as to authorize an action thereon by the bank. (Page 189.)
8. Bills and Notes — Consideration—Contribution to Common Undertaking. The note was also supported by a sufficient consideration under the rule making mutual promises to contribute toward a common undertaking a sufficient consideration for each of them. (Page 189.)
9. Bills and Notes — “Consideration”—Forbearance—Exercise of Legal Right. When defendant, the cashier of plaintiff bank, executed a note to the bank in order to make up in part a defalcation by some unknown person, he believed that he was legally liable for at least a part of the defalcation, as did the president and vice-president; but there was a controversy as to the amount defendant should pay, which was left to the vice-president, who decided that defendant should pay the amount of the note, whereupon defendant, without protest, executed the note to the bank for that amount without any promise of reimbursement unless the stolen money should he recovered or the stockholders voluntarily assess themselves to replace it. Defendant, as cashier, was custodian of the money stolen. Held, that the arrangement between defendant and the other officers was a compromise of any claim tine bank bad against defendant, tbe subsequent ratification of wbieb by tbe directors released defendant from any claim by tbe bank, and sucb compromise was a sufficient “consideration” for tbe execution of tbe note, even if defendant were not actually liable for tbe defalcation; any suspension or forbearance in good faitb of a legal right being sufficient to sustain a promise. (Page 192.)
10. Bills and Notes — Consideration—Sufficiency. Defendant bank cashier and tbe president of tbe bank agreed to each pay a certain sum into the bank in order to make up a defalcation to prevent a run on tbe bank; defendant executing a note for thirteen thousand two hundred and fifty dollars to tbe bank for bis part, °and tbe president paying in a certain amount in cash.- Tbe cash payment by tbe president enhanced tbe value of defendant’s stock in tbe bank about one thousand two hundred and fifty dollars, saved a probable run on tbe bank, and prevented it from being closed by tbe Comptroller of tbe Currency. Held, that a valuable consideration moved from tbe president to defendant for tbe latter’s execution of tbe note to tbe banK. (Page 195.)
11. Bills and Notes — Actions—Sufficiency of Evidence. In an action on a note executed by defendant, tbe cashier of plaintiff bank, under an arrangement between him and tbe president by which each contributed a certain sum to make up a defalcation and prevent a run on tbe bank, evidence held to show that defendant executed tbe note in good faitb with an intention to pay it. (Page 195.)
12. Evidence — Presumptions—Pair Dealing. An explanation of a transaction which is consistent with good faitb and fair dealing will be adopted rather than one involving fraud, where tbe transaction is explainable upon either theory. (Page 196.)
13. Statutes — Construction—Statutes in Pari Materia. Tbe negotiable instrument act is not in pari materia with tbe statute relating to mortgage foreclosure proceedings, not relating to tbe same general subject-matter. (Page 198.)
14. Bills and Notes — -Attorney’s Fee — Proof of Payment — Necessity. Tbe amount stipulated as an attorney’s fee in a negotiable note will be assumed to be a proper fee, in absence of contrary evidence, unless it clearly appears to be .unreasonable, and sucb amount will be allowed without a showing that it was actually charged, paid, or agreed to be paid; Comp. Laws 1907, sec. 3504, providing that in all cases of foreclosure, when an attorney’s fee is claimed, no greater amount shall be allowed than tbe sum shown by tbe evidence to be actually charged by and to be paid to tbe attorney, and section 3505 requiring sucb fee to be fixed by tbe court in tbe foreclosure proceeding, notwithstanding any contrary stipulation in tlie mortgage, only applying to foreclosure proceedings and not to stipulations for attorney’s fees in notes. (Page 199.)
STBAUP, C. J., dissenting.
Appeal from District Court, Third District; Hon. Geo. G. Armstrong, Judge.
Action by the Utah National Bank of Salt Lake City, Utah, against Joseph Nelson. 0
Judgment for plaintiff. Defendant appeals.
AeeiRmed.
STATEMENT OE PACTS.
Plaintiff, a corporation organized and existing under the laws of Congress, brought this action to recover from defendant upon a promissory note. The complaint alleges, in substance: That the defendant, on January 22, 1908, at Salt Lake City, Utah, for value received, executed and delivered to plaintiff' his certain promissory note, and thereby promised, on thirty days’ demand after date, to pay to the order of plaintiff thirteen thousand, two hundred and fifty dollars, with interest at six per cent, per annum from date until paid, and to pay ten per cent, additional as attorney’s fee if the note should be placed in the hands of an attorney for collection; that payment of the note was demanded September 11, 1908, but the defendant refused to pay the same, or any part thereof; that the note was placed in the hands of attorneys for collection. The answer admitted each allegation in the complaint, with the exception that it denied that the note was given “for value received.” The answer also contained the following affirmative allegation, namely: “That the promissory note signed by the defendant and delivered by him to the plaintiff, as alleged in said complaint, was without consideration, and that no consideration whatever passed or was given for tbe said promissory note; . . . tbat neither the plaintiff nor any other person ever paid any sum of money or any other thing, or ever suffered or received any detriment as a consideration for the signing and delivery of the said promissory note; and that said note was wholly without consideration.” The case was tried to the court without a jury. The facts, circumstances, and conditions under which defendant executed the note, as disclosed by the record, are as follows:
The capital stock of plaintiff bank consisted of two thousand shares of the par value of one hundred dollars per share. W. S. McCornick, the president of the bank, was the owner of one thousand shares, and Joseph Nelson (defendant), cashier, was the owner of fifty shares of the capital stock of the bank. On or about January 12, 1908, it was discovered that one hundred and six thousand, two hundred and fifty dollars in some manner unknown had been abstracted, taken, or stolen from the vault of the bank, a large amount of which, if not all, constituted the legal reserve fund of the bank. Soon after the loss was discovered, McCornick and Nelson had several conferences, in which they discussed the probable effect the loss would have on the institution in case its depositors and the public generally should be advised of the situation before the loss to the bank was made good, and they came to the conclusion that, as they were in the midst of a financial panic, unless some immediate action was taken to repair the loss, a “run” would be made on the bank which would be very disastrous to the institution. Moreover, they knew that it would be a matter of a short time only before the United States Bank Examiner would make an examination of the bank and check up its assets and liabilities, and unless the loss was made good before the examination took place it would result in the Comptroller of the Currency closing the doors of the bank and winding up its affairs. So critical, in their opinion, was the situation, that they were afraid to inform the board of directors of the loss, because, as stated by Mr. McCornick in his testimony, “it would be very dangerous to allow so large a body as the board of di rectors to know wbat bad happened, .... as some of them might leak, and it would become common property.” Therefore, in order to avoid the ruin with which the bank was threatened, it was agreed between them that McCornick should put up fifty thousand dollars and Nelson thirteen thousand, two hundred and fifty dollars toward making good the loss. In pursuance of this agreement, McCornick paid into the bank fifty thousand dollars and Nelson executed the note in question. There is an apparent conflict in the evidence respecting the conditions as fixed by themselves under which the money and note were delivered to the bank. According to Nelson’s version of what was said and done on that occasion, Mr. McCornick insisted that Nelson should put up thirteen thousand, two hundred and fifty dollars, and Nelson claimed that he should be required to pay only a sum equal to what his assessment would be in case the outstanding capital stock were assessed to make good the loss; that they agreed to and did leave the decision of the controversy to Thomas It. Cutler, vice president of the bank; that he decided that, as McCornick was putting up fifty thousand dollars, Nelson should pay into the bank thirteen thousand, two hundred and fifty dollars, that these sums, with forty-three thousand dollars taken from the surplus fund of the bank, made up the entire loss. Nelson further testified that at the time he signed the note it was agreed between himself, McCornick, and Cutler that later on the matter should be brought before the board of directors, and the board would be asked to devise means to refund the money put up by himself and McCornick, and in case the board acted favorably on the matter, or the bank should succeed in recovering the stolen money, or any part thereof, that he (Nelson) should be paid one-half of the amount put up by him before McCornick should receive any part of the fifty thousand dollars, paid by him. McCornick testified that he insisted that Nelson was responsible for the entire loss because he was the custodian of the bank’s funds, and that Nelson protested that he was not liable for the whole of the loss because there was another officer of the bank who knew tbe combination of tbe paticular vault or cbest from wbicb tbe money was taken and wbo bad equal charge with himself of tbe funds. McOornick further testified that Nelson at first insisted that each of them should put up pro rata according to the interest he owned in the bank, but finally agreed, upon McCornick’s offering to put up fifty thousand dollars, to pay thirteen thousand, two hundred and fifty dollars toward making good the loss; that a controversy then arose between them as to how they should be reimbursed in case the money stolen, or any part of it, should be recovered, or the stockholders of the bank should voluntarily assess themselves in order to refund the money; that they agreed to and did submit the question as to how they should be reimbursed in case of the happening of either of the contingencies mentioned, to Mr. Cutler; that he decided Nelson should be paid one-half of the amount paid in by him before McComick should receive anything; that he (McOor-nick) would not have paid any money to the bank if Nelson had not paid the thirteen thousand, two hundred and.fifty dollars in question; and that in making the agreement with Nelson he acted for the benefit of the bank. On cross-examination he testified on this, point in part as follows: “Q. I understand you were contracting that the bank might have the benefit o,f your arrangement, is that right? A. Certainly the bank would get the benefit of it. Q. The contract was between you and Mr. Nelson for the benefit of the bank, was that right? A. Benefit of the bank, certainly. Q. In other words, you claim as part of the consideration for this note that you agreed to give a sum provided he gave a sum ? A. Yes.” And again, an answer to the following, “Were you contracting on behalf of yourself . , . or on behalf of the bank for the money to go into the bank ?” he answered, “Well, I was contracting for the bank, of course.” And in answer to the following question, “Were you contracting for the bank when you told him you would give fifty thousand dollars ?” McCornick answered: “Certainly I was, for the benefit of the bank. . . . Whose benefit would it be?”
Thomas E. Cutler testified that when Nelson spoke to him about the matter Nelson did not seem to object so much to the payment of the thirteen thousand, two hundred and fifty dollars, as he did to MeC’ornick’s being reimbursed for any part of the money put up by him before he (Nelson) was paid in full, in case any part of the stolen money should be recovered, or an assessment should be levied against the capital stock of the bank; that McCornick and Nelson seemed to have agreed upon the amount that each should pay, namely, McCornick fifty thousand dollars and Nelson thirteen thousand, two hundred and fifty dollars.
The record also shows that the note and money were received by and became a part of the assets of the bank, and that the board of directors met and ratified the transaction.
The court, among other things, found, so far as material here: “That, for a valuable consideration received by defendant, he executed and delivered his promissory note (the note in question) to plaintiff; . . . that all of the allegations contained in plaintiff’s complaint filed herein are true, and all the denials and allegations of said defendant in his answer are untrue, except as to the admissions therein contained.” As a conclusion of law the court found that plaintiff was entitled to judgment against defendant for the principal of the note; thirteen thousand, two hundred and fifty dollars and interest thereon amounting to eleven hundred and four dollars and sixteen cents, and for attorney’s fee amounting to thirteen hundred and twenty-five dollars, and rendered judgment in favor of plaintiff for the sum of fifteen thousand, six hundred and seventy-nine dollars and sixteen cents and costs of suit. To reverse the judgment defendant has brought the case to this court on appeal.
Young & Snow for appellant.
Van Cott, Allison <& Biter for respondent.
Kahn v. Central Smelting Co., 2 Utah 371; Snyder v. Emerson, Auditor, 19 Utah 319, 57 Pac. 300.
Montgomery v. Rief, 15 Utah 495, 50 Pac. 623; McKay v. Ward, 20 Utah 157, 57 Pac. 1024, 46 L. R. A. 623.

Opinion:
McCarty, J.
(after stating the facts as above).
Appellant in his assignment of errors, alleges "that the court erred in that it failed to find the facts, if any there were, constituting, or wbicb could constitute, any consideration for the contract or promissory note," and insists that the finding made by the court, namely, ¿<that for a valuable consideration received by said defendant he (the defendant) executed the promissory note mentioned," was a mere conclusion of law and not a finding of fact at all. It is also alleged in the assignment of errors that "the court erred in making its final decision for the reason that there is no evidence showing a consideration for the contract which was the subject-matter of the action," and that the court erred in allowing and including in the judgment thirteen hundred and twenty-five dollars as attorney's fee.
The questions presented will be considered in the order in which we have stated them. The note sued on being a negotiable instrument, it was not necessary for plaintiff to either plead or prove a consideration in order to make out a prima, facie case. Section 1576, Comp. Laws Utah, 1907, provides 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." In 9 Cyc. Ill, the rule is illustrated' as follows: "If the contract in suit is under seal, it imports a consideration and none need be alleged; and the same is true if the instrument sued on is negotiable according to the law merchant. And by statute in some jurisdictions every written contract is made to import a consideration, and, where this is, so, it is not necessary for the plaintiff to allege the consideration." In 4 Ency. Pl. and Pr. 928, it is said: "In the absence of statutory enactments to the contrary, it is necessary, in actions upon contracts, to allege a consideration, except in the case of contracts under seal, bills of exchange, and negotiable promissory notes, all of which by intendment of law import a consideration." In 2 Bates, Pl., Pr. and Forms, 1058, the author tersely and correctly states the rule as follows: "As a note, bill, or check imports a consideration, none need be averred under the rule that it is not necessary to plead what is implied in law."
Counsel for appellant recognize the rule as stated in the foregoing citations. In their printed brief they say: "However, defendant contends that, although the authorities hold that in an action upon a negotiable instrument no consideration need be pleaded, still that rule exists only for the reason that a consideration is presumed; but in the case at bar the question of consideration is expressly put in issue, and a finding of fact upon that issue must be made in the same manner as though the action was upon a non-negotiable instrument which did not imply a consideration." If it is not necessary to plead a consideration when a contract of this kind is the subject-matter of the action, it necessarily follows that it is not necessary to prove one in order for the plaintiff to make out a prima facie case, and unless the defendant pleads affirmatively that there is no consid- eration for the contract no finding of a consideration need be made. But some authorities seem to hold that as to affirmative allegations in an answer it is sufficient for the court to find generally that they are untrue, and it is not essential in order to support a judgment for plaintiff that an affirmative finding be made stating the facts in detail upon which the defendant relied as a defense under the affirmative allegations in his answer. In the case of McLennan v. Wilcox, 126 Cal. 52, Pac. 306, the court says: "The answer also sets up the statute of - limitations as a defense. It is claimed that the court failed to find upon defendant's plea of the statute of limitations. The court found that each of the averments of the answer are not true, except certain matters stated in the findings. The findings do not in any other manner refer to the plea of the statute, and such plea is not among the excepted matters referred to in the findings. The finding is therefore to the effect that the plea'of the statute of limitations is not true and is sufficient." Gale v. Bradbury, 116 Cal. 39, 47 Pac. 778.
In Spelling, New Tr. and App. Pro., section 593, the author says:
"If an issue be tendered in general terms and met by a denial in tbe same form, a finding in tbe same general form will be sufficient; but, where tbe pleadings are so framed that tbe controversy turns upon a particular fact, tbe finding should conform to tbe issue thus presented and be specific. Accordingly, when only general facts are averred, and tbe controversy related to tbe settlement of a long standing account consisting of numerous items, it was held that a general finding of a balance in favor of plaintiff was sufficient" — citing with approval tbe case of Pratalongo v. Larco, 47 Cal. 378.
Tbe action in that case was, as stated in tbe opinion, "for money lent and advanced and paid, laid out, and expended by tbe plaintiff to and for tbe nse of tbe defendant, and for money bad and received by tbe defendant for tbe nse of tbe plaintiff. Tbe answer is a general denial and a counterclaim in wbicb tbe defendant avers that tbe plaintiff is indebted to bim for money bad and received, lent and advanced, and paid, laid out, and expended." So in tbis case it is alleged in tbe answer, in general terms, that tbe note in question "was without consideration, and that no consideration whatever passed or was given for tbe promissory note." Tbe general finding that tbe note was executed "for a valuable consideration received by said defendant" negatives tbe affirmative allegation of tbe answer and is therefore sufficient. Moreover, tbe authorities seem to bold that findings are sufficient when tbe facts found are stated in tbe same way as they are alleged in tbe pleadings.
In Hayne on New Tidal, section 243, tbe rule is stated as follows:
"Facts may be stated in tbe findings in tbe same way they are stated in tbe pleadings. It is not necessary that tbe findings should follow tbe precise language of tbe pleadings; but tbe only purpose of findings is to answer tbe questions put by tbe pleadings, and it seems to be tbe received idea that it is sufficient if tbe answers are given in tbe same language as tbe questions, and that tbe two modes of statement are governed by tbe same general rules."
In 8 Ency. Pl. and Pr., 937, it is said:
"It is not necessary that tbe findings should be in tbe exact language of tbe pleadings or in any particular form. Tbe finding complained of in tbis case, while of course not in tbe exact language of that part of tbe answer in wbicb want of consideration is alleged, nevertheless is directly responsive thereto. And, furthermore, the doctrine is elementary that the findings should he a statement of the ultimate facts in controversy and not of the evidentiary matters from which the ultimate facts are to he deduced or found." In 8 Ency. Pl. and Pr. 941, it is said: "The findings of the court should he statements of the ultimate facts only, and not probative facts. . . . The findings should contain a concise statement of the several facts found by the court from the evidence and not the evidence from which they are found."
Murphy v. Bennett, 68 Cal. 528, 9 Pac. 738, was an action to recover damages for the tearing down of a barn and converting the materials thereof. It was alleged in the complaint that the plaintiff was the owner of the barn at the time of the alleged conversion. The answer denied the ownershipi of the plaintiff and set up two affirmative defenses in justification of the taking. The court found that the plaintiff was not, and that the defendant was, the owner of the building, but omitted to find on the affirmative defenses. It was contended that the finding was a conclusion of law. On appeal the Supreme Court held that the finding on the issue of ownership: was sufficient, and that the failure to find on the affirmative defenses did not prejudice the plaintiff. In the course of the opinion, the court said: "Here the allegation in the complaint is that the plaintiff Vas the owner of a certain frame building, situate,' etc. The answer denied that plaintiff was the owner of the building. Whether plaintiff did own the building or not was then the ultimate fact to be determined, and upon the issue thus raised the court found against the plaintiff. We think it clear that the findings referred to are findings of fact, and not conclusions of law."
In the case of Kahn v. Central Smelting Co., 2 Utah 371, it is said in the syllabus: "A finding That there was no partnership between the plaintiff and the defendant' is not a conclusion of law, but is a finding of fact." And in the course of the opinion Hr. Justice Emerson, speaking for the court says: "The fact that there was a partnership is the ultimate fact alleged in the complaint. There are certain facts and conditions and circumstances set out in tbe complaint from which this ultimate fact is deduced; that is, there is in the complaint much detail of mere evidentiary facts. The material issue of fact is, however: Was there a partnership ? And the finding responds to this issue. This was the ultimate fact to be ascertained, and it is none the less a finding of fact because drawn as a conclusion from other facts." This case is cited with approval and the doctrine therein announced reaffirmed by this court in the case of Snyder v. Emerson, Auditor, 19 Utah 319, 57 Pac. 300, wherein it is-held that "the finding that W. B. Critchlow was duly appointed as night jailer is not a conclusion of law, but a finding of an ultimate fact which was an issue."
As a test for determining whether the finding in question is a conclusion of law or a finding of an ultimate fact, let us suppose, for example, that the court had, in the language of the defendant's answer, found "that the promissory note signed by defendant and delivered by him to the plaintiff, as alleged in said complaint, was without consideration, and that no consideration whatever ever passed or was given for the said promissory note." Could such a finding be successfully assailed on the ground that it is a conclusion of law and not a statement of an ultimate fact ? Certainly not, because it is the only finding that the court could' have made had it found on this issue in favor of the defendant, and that, too, notwithstanding this issue was presented by the affirmative allegations of defendant's answer and the burden was upon him to prove that the note was executed without consideration. Now, if a finding that the note was executed without consideration would be a sufficient finding to support a judgment in favor of defendant, it necessarily follows that a finding that the note was made and delivered "for a valuable consideration" is a sufficient finding to support a judgment for plaintiff. We are clearly of the opinion that the finding made by the court is a finding of an ultimate fact, and, as we have stated, it is directly responsive to the affirmative allegations contained in-the defendant's answer.
It has been suggested that the sixty-three thousand, two hundred and fifty dollars put up> by Nelson and MeCorniek was a mere temporary advancement made by these parties to the bank to tide it over an emergency with the understanding that they would later on be reimbursed for the amount thus advanced, regardless of whether the stolen money should be recovered or the stockholders should voluntarily assess themselves to raise funds to reimburse them. As to what the understanding was in this regard is best shown by the evidence of the parties themselves. McComick testified that the understanding was that he and Nelson would be reimbursed for the sixty-three thousand, two hundred and fifty dollars put up by them provided that the bank recovered the stolen money or the stockholders voluntarily assessed themselves to raise funds for that purpose'. On cross-examination he testified in part as follows: "Q. You understood there was some sort of obligation upon the bank to reimburse you; that was, in case they recovered ? A. Certainly. I have stated that many times. . . . Q. You were contracting both for yourself, then, and for the bank in what you should receive back, were you ? A. I certainly contracted, if the bank got it, that we should get our money. . . . Q. Well, now I want to know whether or not there was anything said that if the money should be returned to the bank that the bank should be obligated to turn it over to you or Mr. Nelson, or any part of it ? A. Certainly. It was an agreement, a verbal agreement, that it should be. . I believe I stated (referring to what he said to Nelson prior to and at the time the note was signed) I hoped the board of directors or stockholders might see fit to come up later and reimburse us in case it wasn't recovered. . I said I hoped they would, and I think he (Nelson) hoped so too. Q. You intended to submit it to the board of directors, told Mr. Nelson you expected you would submit it to them and they would likely reimburse you ? A. Didn't say they would likely do it. Q. You would ask them to do it, was that said in substance ? A. I don't think it was, in substance. We merely talked that we hoped that the stockholders or board of di rectors might do it, that the stockholders might see their way clear to reimburse us in part if not all. . . . Q. There was no agreement, however, that anything should be returned, but only in case it was returned? . A. Yes. . . . Well, I said, of course, . . . that the bank would reimburse us if they collected the money. Then we agreed about how it should be disbursed'. He (Nelson) was to have half of his first before I received anything. . . . Q. Did you understand that you were giving to the bank fifty thousand dollars, without getting any obligation of the bank to reimburse you? A. I understand that to be the case. Q. You would never have any recourse against the bank, or any other director or stockholder? A. I wouldn't charge any director or anybody for the amount I was putting up."
Nelson, on direct examination, testified in part as follows: "Q. State what was said, if you remember it. A It was undisputed that we should get the money back, either by finding the party who had stolen it and recover it in that way, or else we would bring the matter; when the time was proper for it, before the board of directors and ask them to devise some means of putting up the money, and then, of course, I would get my money (not the note) back. Q. Was there anything said further than that? A. Well, it was questioned, of course, as to whether or not we would get all back, or part of it back, and it was agreed between us that I should get the first money that came back to the amount of one-half of that note before any division went to anybody else, as it was practically well conceded that I was putting up more than I really ought .to put up." On cross-examination questions were propounded to and answered by Nelson as follows: "Q. Now/as cashier of the bank, you knew that when your note for thirteen thousand, two hundred and fifty dollars was put into the bank that it would be an asset and be so considered by the bank examiner? A. I expected that, naturally. . . . Q. What was the reason of the dispute as to how you would be reimbursed? A. Because I didn't think I should have put up so much money. Q. Mr. Cutler decided jou should ? A. Tes, Also decided what should be done with anything that should be recovered. . . . Q. What did he say? What was his decision ? A. His decision was that I should put up' thirteen thousand, two hundred and fifty dollars, and in ease the money was recovered or received from voluntary contributions I should get half of the amount of that note before any distribution was made to anybody else. . . . Q. On his decision you executed the note ? A. Yes, sir."
There is nothing in the evidence given by Cutler from which it can be inferred that the sixty-three thousand, two hundred and fifty dollars paid by MoCornick and Nelson was in the nature of a mere temporary advancement or loan to the bank, or that the parties so regarded it; but. on the contrary, his evidence shows conclusively that he understood the sixty-three thousand, two hundred and fifty dollars was put up by these parties to help make good the loss sustained by the bank, and that the bank was in no wise obligated to refund the money unless the stolen funds should be recovered or the stockholders should voluntarily assess themselves to raise funds to reimburse the parties. Nor is there anything in the evidence of any of the witnesses from which it can reasonably be inferred that Nelson, or any of the parties to the transaction, regarded the sixty-three thousand, two hundred and fifty dollars as a loan. Furthermore, the conduct of the parties subsequent to the transaction shows that it was not a loan, and that they did not so regard it. The note was executed January 22, 1908, and was payable "on thirty days' demand after date." As hereinbefore stated, Nelson was, at the time of the transaction, cashier of the bank. On January 31, 1908; he resigned as cashier and was on the same day, elected vice president. He served as vice president and director of the bank until April 8, 1908, when he resigned from both positions. This action was begun December 11, 1908, nearly eleven months after the note was given. During all this time no demand was made by Nelson upon the bank or any of its officers for the cancellation and return of the note. Nor did be make any claim at tbe trial tbat there was an understanding between him, McCornick, and Cutler, either express or implied, that after the then pending crisis to the bank had passed the bank would cancel and return the note.
We now come to the decisive question in the case, namely, does the evidence introduced at the trial, when considered in the light most favorable to respondent, support the finding that the note was executed for a valuable consideration? Counsel for appellant have not discussed this feature of the case in their brief, nor have they cited any authorities in support of the assignment of error in which the question of want of consideration for the note is involved. We are, therefore, deprived of the benefit of an argument from them and whatever research they may have made on this point which involves the merits of the case. Before entering upon a discussion of the merits, we shall briefly consider what, under the authorities is held generally to be a sufficient consideration to uphold a simple contract. Section 1576, Comp. Laws Utah 1907, provides, as far as material here, that "every negotiable instrument is deemed prima facie to have been issued for a valuable consideration." Section 1577 provides, in part, as follows: "Value is any consideration sufficient to support a simple contract." In volume 2, Words and Phrases, commencing on page 1444 to and including page 1448, are collated the definitions of many text-writers and the holdings of numerous courts of last resort as to what constitutes a good "consideration" for a contract. The following are a few of the many definitions there given. On page 1445: "We can deduce the rule that if a man by a promise induces the promisee or some other person on account of or for the benefit of the promisee, to do some act, or part with some chattel, title, interest, privilege, or right, which the law regards as 'of some value, there is a sufficient consideration for the promise. To ascertain what the consideration of a promise is, therefore, is to discover what the promisee or such other person did or parted with on the strength of the promise. (Rice v. Almy, 32 Conn. 297, 303.)" On page 1446, it is said: "A sufficient consideration for a promise arises wherever, by the act of the promisee, a benefit results to the promisor, or, at bis request, to a third person, or if a promisee sustains any loss or inconvenience, or subjects himself to any charge or obligation, at the instance of the promisor, although such promisor obtains no advantage therefrom. (Wilson v. Baptist Education Soc., 10 Barb. [N. Y.] 308, 313.)" "In the absence of fraud, mere inadequacy of consideration is no ground for avoiding a contract. (Appeal of Clark [57 Conn. 565], 19 Atl. 332, 333 [citing Smith's Lectures on Contracts] ). 'The quantum of the benefit on the one hand, or the loss on the other, is immaterial.' (Cook v. Bradley, 7 Conn. 57, 62, 18 Am. Dec. 79.)" "Any act done by the promisee at the request of the promisor, however trifling the loss to himself or the benefit to the promisor, is a sufficient consideration for a promise made without fraud and with full knowledge of all the circumstances. (Doyle v. Dixon, 97 Mass. 208, 213, 93 Am. Dec. 80; Ballard v. Burton [64 Vt. 387] 24 Atl. 769, 771, 16 L. R. A. 664.) A very slight advantage to one party or a trifling inconvenience to the other is a sufficient consideration to support a contract when made by a person of good capacity who is not at the time under the influence of any fraud,' imposition, or mistake. (Traphagen's Ex'r. v. Voorhees, 44 N. J. Eq. 21, 12 Atl. 895, 901, citing Harlan v. Harlan, 20 Pa. 303.) In respect to the extent of the loss, trouble, or inconvenience to the promisee, it is immaterial that it is of the most trifling description, provided it be not utterly worthless in fact and law. (Clark v. Sigourney, 17 Conn. 511, 517.)" "A consideration to a third party may be an inducement to a person to give his note, and in such case the promise is just as binding as though the promisor had received the benefit. Where, at the time of dedicating a church, A. promised verbally to pay fifty dollars towards liquidating the indebtedness of the society and to enable it to complete its church, and thereafter, in lieu of his promise to contribute money, he gave his note for fifty dollars, payable to B., a trustee of the- society, who had advanced the money for the church, B. was entitled to recover on tbe note in bis own name. (Wheeler v. Toof, 2 Mich. N. P. 44, 48.)" So, in tbe case at bar, tbe weight of evidence tends to show that it was mutually understood and agreed between McCornick and Nelson that McCornick should put up fifty thousand dollars and Nelson thirteen thousand, two hundred and fifty dollars. While the record shows that the main or principal object they had in view in coming to the rescue of the bank was to prevent a "run" on it by its depositors and to avert the ruin with which the institution was threatened, the weight of the evidence, nevertheless, tends to show that McCornick would not have put up the fifty thousand dollars if Nelson had not agreed to put up thirteen thousand, two hundred 'and fifty dollars. McCornick so testified, and on this point Cutler testified that McCornick told him in the presence of Nelson that he (McCornick) "was going to put up fifty thousand dollars provided Nelson put up1 thirteen thousand, two hundred and fifty dollars." And, as stated by counsel for respondent, in the brief, "McCornick paid fifty thousand dollars and defendant agreed to pay thirteen thousand two hundred and fifty dollars for the common purpose of making good the loss suffered by the plaintiff bank." Therefore .one of the ingredients or elements of the consideration for the execution "of the note was the payment of the fifty thousand dollars by McCornick for the benefit of the bank.
In Farrow v. Turner, 2 A. K. Marsh. (Ky.) 495, it is said:
"It is apparent from the plea (want of consideration) that it contains no defense, unless it is essential to the validity of the note that some consideration should have moved from Shortridge to the defendant. We know of no principle of law that requires such a consideration. A valuable consideration of some sort, it will he conceded, is, under the statute of this country, essential to the validity of a note; hut, if it he a consideration of value, it is totally immaterial from whom it moves. Whether it he he obligee or from any other person, it carries with it the same legal operation and communicates to the note the same validity."
Tn Williston's Wald's Pollock on Contracts (3d Ed.), 241, the author says:
"It is .laid, down in tlie books that consideration must move from the promisee, and it is sometimes supposed that infringement of this rule is the basis of the objection to allowing an action by a third person upon a promise made for his benefit. This is not the case. In such promises the consideration does move from the promisee, hut the beneficiary who seeks to maintain an action on the promise is not the promisee. The rule that consideration must move from the promisee is somewhat technical, and in a developed system of contract law there seems no good reason why A should not be able for a consideration received from B. to make an effective promise to C. Unquestionably he may in the form of a promissory note, and the same result is generally reached in this country in the case of an ordinary simple contract."
In Palmer Savings Bank v. Insurance Co., 166 Mass. 195, 44 N. E. 213, 32 L. R. A. 615, 55 Am. St. Rep. 387, it is said:
"While in this commonwealth the rule is held strictly that no one can sue or he sued on a simple contract who is not a party to it, either disclosed or undisclosed, yet it is not in all cases necessary that the consideration should move from the promisee to the promisor, in the ordinary sense of those words. . . . An assignee of a nonnegotiable debt must sue in the name of the assignor, unless the debtor has promised to pay it to the assignee; but, if there is such a promise, the assignee can sue in his own name, although no consideration for this promise moves directly from the promisee to the promisor."
In the ease of Montgomery v. Rief, 15 Utah 495, 50 Pac. 623, this court, speaking through Mr. Justice Bartoh, said:
"This question has been the subject of much controversy in the courts, and as a result the prevailing doctrine in this country, as shown by the weight of authority, doubtless is that, where a promise or contract has been made between two parties -for the benefit of a third, an action will lie thereon at the instance and in the name of the party to be benefited, although the promise or contract was made without his knowledge and without any consideration moving from him."
This same doctrine was reaffirmed by this court in the case of McKay v. Ward, 20 Utah 157, 57 Pac. 1024, 46 L. R. A. 623.
In the case of Moore v. Hubbard, 15 Ind. App. 85, 42 N. E. 963, this identical question was involved, and in the course of the opinion the court says:
"Whether or not the consideration for the execution of the instrument sued on passed to appellant from the payee of the note, or from some one else, it would still he sufficient to sustain it if there was a valuable consideration passed to her from any one, by reason of which the instrument was executed."
In 9 Cyc. 316, the rule is stated in general terms as follows : "A benefit -to a third person is a sufficient consideration for a promise." And on pages 312 and 313 of the same volume it is said: "Indeed, there is a consideration if the promisee in return for the promise does anything legal which he is not bound to do, or refrains from doing anything which ie has a right to do, whether there is any actual loss or detriment to him or actual benefit to the promisor or not," citing cases.
We are of the opinion that the case under consideration comes clearly within the rule as declared by the foregoing authorities. Furthermore, the authorities uniformly hold that a mutual promise to contribute towards a common cause or undertaking is a sufficient consideration for a promise. (Hostetter v. Hallniger, 117 Pa. 606, 12 Atl. 741; George v. Harris, 4 N. H. 533, 17 Am. Dec. 446; Congressional Society v. Perry, 6 N. H. 164, 25 Am. Dec. 455; Underwood v. Waldron, 12 Mich. 90; Rothenberger v. Glick, 22 Ind. App. 288, 52 N. W. 811.)
In the case at bar, 'as we have repeatedly stated, the weight •of the evidence shows that it was mutually agreed between McCornick and Nelson, each of whom was a stockholder as well as an officer of the bank, that McCornick should pay fifty thousand dollars and Nelson thirteen thousand, two hundred and fifty dollars towards making up the loss which the bank had sustained. Therefore the agreement comes within the rule governing mutual promises made by parties of contributions toward a common cause.
There was a further consideration for the execution of the note, which we think was amply sufficient to make of it a binding contract. Nelson at the time the money was stolen was cashier and custodian of the funds of the bank, and at the time he executed the note McCornick, the president of tbe bank, insisted that be (Nelson) was responsible for tbe entire loss, as be was cashier, and tbe robbery bad been committed inside of tbe building. While Nelson protested that be was not liable for tbe entire loss, be did not deny being responsible for a part of it. In fact, tbe record shows that be considered himself personally liable for at least a part of tbe loss. He testified that, when McCornick asked him to put up thirteen thousand, two hundred and fifty dollars, be "refused to do it, saying that it was an unreasonable amount" for him to put up, but suggested that be was willing to put as much towards making good the loss as one of tbe other officers of tbe bank would put up whom be seemed to think was equally responsible with himself for the loss of tbe money; that be said, quoting him literally: "'I would leave it to any fair-minded man what was right for me to put up.' He (McCornick) said to me we couldn't leave it to anybody. Didn't want it known. If we let it go out there would be a run on tbe bank. I said then it should be left to Mr. Cutler, as be was vice-president of tbe bank and bad been advised of tbe situation. . . . His (Cutler's) decision was that I should put up thirteen thousand, two hundred and fifty dollars and in case tbe money was recovered, or when any of it was recovered, or received from voluntary contributions, I should get half of tbe amount of that note before any distribution was made to any one else." And be further testified: "Q. Any promise upon anybody's part that you should receive any amount at all ? A. No, sir. Q. Erom any source? A. No, sir. Q. Now, I will ask you whether or not following that conversation you signed tbe note in question ? A. Yes, I went right over there and wrote it out and banded it to Mr. Adams." Tbe record shows that Mr. Adams was a vice-president and tbe manager of tbe bank. Defendant also introduced in evidence bis Exhibit A, which is as follows: "January 22, 1908. Deceived from Joseph Nelson thirteen thousand, two hundred and fifty dollars to assist in making up. loss of one hundred and six thousand, two hundred and fifty dollars found missing from the reserve safe of the Utah National Bank, said sum of thirteen thousand, two hundred and fifty dollars is evidenced by promissory note in this bank, signed by said Joseph Nelson. TJtah National Bank, by W. F. Adams, V. P."
As we have hereinbefore observed, the settlement thus made with Nelson was afterwards ratified by the board of directors of the bank. It will thus be observed that Nelson's own evidence conclusively shows: (1) That before he executed the note in question he believed that he was legally liable to the bank for at least a part of the loss suffered by it because of the robbery mentioned; (2) that the president and vice president were of the same opinion; (3) that he was requested by the president to pay thirteen thousand, two hundred and fifty dollars into the bank towards making up the loss; (4) that a controversy arose between them as to the amount he should pay; (5) that the decision of this controversy was left to Mr. Cutler; the vice president of the bank, and that he decided that Nelson should pay thirteen thousand, two hundred and fifty dollars and that he (Nelson) without protest, agreed to the decision made by Cutler, and executed the note for that amount; (6) that no guaranty or promise was made to him that he should be reimbursed for the amount he put up, or any part thereof, unless the stolen money or some part thereof should be recovered, or the stockholders should voluntarily assess themselves to replace the stolen money. In the face of these facts, when considered in connection with the further fact that Nelson at the time the money was stolen was cashier of the bank and custodian of that particular fund and was in a position to know whether, in looking after and guarding this fund, he had faithfully and fully discharged every duty he, as custodian of this money, owed the bank, we do not think that this court ought to1 arbitrarily say that no legal liability attached to him for the loss of the money, and that there was no legal basis for the settlement he made with the bank in executing the note. We do not wish to be understood as intimating that the record justifies any inference that he had any knowledge of the robbery at the time it was committed, or that he, in the discharge of his duties as cashier, in any way or manner acted in bad faith. Dishonesty or bad faith on his part was not essential in order to make him liable to the bank for the money stolen from its vaults. Indifference to or neglect of duty on his part in failing to use that degree of care and caution in preserving and guarding the funds of the bank that an ordinarily careful and prudent business man would use under the same or similar circumstances might make him liable to the bank for money unlawfully taken from its vaults which might have been prevented by the exercise of ordinary care on his part. The settlement made by Nelson, on the one hand, and the president and vice president, on the other, was in effect, a compromise of whatever claim the bank had against Nelson. And the subsequent ratification of the transaction by the board of directora of the bank not only released Nelson from any and all claims that might be made against him by the bank in excess of the amount compromised for, but also obligated the bank .to refund to McComick and Nelson the respective amounts paid by them provided the money stolen should be recovered or the stockholders should voluntarily assess themselves or otherwise make good the loss. And, as stated by counsel for respondent in their brief, "the original claims of the respective parties were extinguished and the whole matter merged into the promissory note in question."
In 2 Words & Phrases, p. 1447, it is said:
"Any damage or suspension or forbearance of a right will be sufficient to sustain a promise. (2 Kent's Comm. [12th Ed.], p. 465.)" In Burr v. Wilcox, 13 Allen [Mass.] 273, Wells, J., in defining "consideration," says any act done at the defendant's request, and for his convenience or to the inconvenience of the plaintiff, would be sufficient. Pollock, in his work on Contracts (page 166), says "consideration" means, not so much that one party is profiting, as that the other abandons some legal right in the present. In Boyd v. Freize, 71 Mass. [5 Gray] 544, Shaw, C. J., says an agreement therefor to forego one's legal right, or forbear collecting a debt or enforcing any other beneficial right, is a good con sideration for an express promise made upon it. Such agreement may be express or implied by law. Ballard v. Burton, 64 Vt. 387, 24 Atl. 769, 771, 16 L. R. A. 664."
It has been suggested that, in case the judgment is affirmed and Nelson is compelled to pay the note, he could not recover from the bank the amount so paid in redemption of the note, even though the bank should succeed in recovering the stolen funds, and hence the giving of the note was without consideration. In answer to the suggestion, it is sufficient to say that one of the conditions upon which Nelson executed the note was that he would be reimbursed in. case the stolen money should be recovered. We know of no rule of law that would enable the bank, after having ratified the agreement entered into for its benefit and accepted the' note, to later on repudiate its obligation to reimburse Nelson in case the stolen 'money was recovered. No authority has been cited, nor do we think any can be found, that supports such an inequitable and unjust proposition.
Conceding, for the sake of the argument, that, as a matter of fact, no' legal liability attached to Nelson for the loss of the money, yet this would not, under the facts and circumstances disclosed by the record, prevent a recovery by the bank in this action, because the undisputed evidence shows that all the parties to the original' controversy, including Nelson, actually believed that he was liable to the bank for at least a portion of the money stolen, and that the compromise with respect thereto was made in good faith. Under the great weight of authority the compromise was a sufficient consideration for the note.
In Page on Contracts, section 321, the author says:
"The general rule that the legal right acquired or forborne must be a genuine one to constitute a valuable consideration must he qualified in case of compromises of disputed claims. If a bona fide dispute exists as to the validity of a claim, and the parties compromise such dispute by mutual agreement, such compromise is valid; as the mutual releases of rights which are at least apparent, and are upheld in good faith, form a consideration each for the other. If claims thus compromised are each genuine and upheld in good faith, the fact that one of them is invalid does not avoid the compromise, and the validity or invalidity of the original claim is immaterial. If it were not for this rule, few, if any, compromises could he upheld" — citing cases.
In 6 Am. and Eng. Ency. Law (2d Ed.), 711, it is said:
"Closely allied with the preceding, and based upon the same general principle, is the compromise of doubtful and unliquidated claims. As it is the policy of the law to discourage litigation and to enforce voluntary settlements effected without the interposition of the law, it has uniformly been held that the compromise of dounbtful claims is' valid; the mutual release of their respective rights by the parties to the controversy, and the avoidance of the expense and annoyance of a suit at law, being a sufficient consideration for the composition." And on page 714 of the same volume it is said: "After a compromise has been entered into in good faith, in an action to enforce the satisfaction, the merits of the original controversy cannot be called into question."
In 8 Cyc. 510, the rule is stated as follows:
"The law favors the avoidance or settlement of litigation-, and compromises in good faith for such purposes will be sustained as based upon a sufficient consideration, without regard to the merits of the controversy or the character or validity of the claims of the parties, or even though a subsequent judicial .decision may show the rights of the parties to have been different from what they at the time supposed. The real consideration which each party receives under such a compromise is, according to some authorities, not the sacrifice of the right, but the settlement of the dispute."
(Perkins v. Trinka, 30 Minn. 241, 15 N. W. 115; Armijo v. Henry, 14 N. M. 181, 89 Pac. 305, 25 L. R. A. (N. S.) 215, and cases cited in note.)
Moreover, Nelson, on cross-examination, testified that the payment of the fifty thousand dollars by McOornick "added twenty-five dollars a share to the assets of the bank." At the time of the compromise he owned fifty shares of the stock, which, according to his own testimony, was enhanced twelve-hundred and fifty dollars in value by McCornick's- performance of his part of the agreement. Besides, the payment made by Nelson and McComick saved the bank from a probable "run" and unquestionably saved it from being closed by the Comptroller of the Currency. Therefore it may be fairly said that a valuable consideration in effect moved from McC'ornick to the defendant for the exe- cution of the note. True, Nelson testified that when he signed the note he did not intend to pay it, but his own evidence as'to what was said and done on that occasion, when considered in connection with the testimony of McComick and Cutler, shows that he executed the note in good faith, and that at the time he did so fully intended to' pay it.
The claim made by Nelson that, at the time he signed the note and delivered it to the bank, he had no intention of every paying it, was an afterthought on his part. This is shown by his own evidence, which we have hereinbefore set out. We also invite attention to the following statements made by him on cross-examination: "Q. You told your counsel that at first you refused to put up this note . . . for thirteen thousand, two hundred and fifty dollars? A. Yes, sir. Q. When was it you changed your mind and concluded to put it up? A. When Mr. Cutler said that would be fair. Q. Was it right then you had in mind that you would not pay it ? A. I never expected to have to pay it, expected it would be collected some other way. Q. If, it was not collected some other way, did not have it in mind then you would not pay it? A. Quite sure it would be collected; never had any other thought. Q. Did you have in mind then you would not pay this note if the money was not found? A. Never thought of it from that standpoint at all."
Furthermore, if the note was not delivered to and accepted by the bank in good faith as an asset, and the entry made of it in the books of the bank was only for the purpose of deceiving the federal bank examiner or the officers of the bank who were not advised of the robbery mentioned, then it follows that under section 5209, Rev. St. U. S. 1878 (U. S. Comp. St. 1901, p. 3497), the entry of the note as an asset on the books of the bank was a "false entry," and every person who was a party to the fraudulent transaction, know ing it to be such, could be prosecuted criminally under said section. We are not, therefore, prepared to hold, on the bare assertion of Nelson, which assertion he, in giving his testimony, repeatedly contradicted,' and which is inconsistent with the admitted facts leading up to and surrounding the transaction, that the note was given by Nelson and accepted by the bank and used only as a dummy to deceive the federal bank examiner and all other persons who were not parties to the transaction and who were doing or might thereafter do business with the bank. Moreover, it is a familiar rule of law that, where a transaction is explainable upon either of two different theories, one of which is consistent with good faith and fair dealing and the other involves fraud and deception, the explanation consistent with honesty and legality will be accepted unless the evidence clearly preponderates in favor of the illegal aspect of the transaction. In 1 Jones on Evidence this principle is aptly illustrated in the following language: "In the ordinary transactions of life, fairness and honesty are presumed, and conveyances, sales, and contracts generally are presumed to have been made in good faith until the contrary appears. . In actions involving fraud, as in other cases where the facts present a double'aspect, one consistent with fair dealing and the other involving dishonesty of purpose, the court, unless the scale decidedly preponderates for the latter, will strike the balance in favor of honesty and innocence." (16 Cyc. 1082.)
In this case the undisputed facts, as we view them, are not only consistent with good faith and honesty of purpose on the part of Nelson, McCornick, and Cutler in entering into the agreement by which the credit and financial standing of respondent bank was maintained, but are inconsistent with any other conclusion. It is conceded that it was understood and agreed between Nelson, MeOornick, and Cutler .•at the time the note was executed that in case any of the money stolen should be recovered by the bank, or the loss made good by voluntary assessments on the part of the stockholders. Nelson should be paid one-half of the thirteen thou sand, two hundred and fifty dollars put up by Him before McComick should be reimbursed for any of the fifty thousand dollars put up by him. Now, Nelson, knew that if, for any reason, he should fail to pay the note, there would be nothing due him under this part of the agreement, even though the money stolen should be recovered or the loss otherwise made good. It is not reasonable to suppose that if he, at the time he executed the note, intended to repudiate it later on, he would have insisted upon the parties with whom he transacted the business entering into this part of the agreement. In fact, the great weight of the evidence shows that the basis upon which McComick and Nelson should be reimbursed in ease the money stolen or any part of it should be recovered was the only question about which there was any serious controversy. The question, however, as to what Nelson's real intentions were in regard to the matter at the time he signed the note is unimportant, as the evidence, without conflict, shows that the parties with whom he transacted the business acted in good faith, and at the time had every reason to believe, and no doubt did believe, that he, too, was acting in good faith.
Counsel for appellant next contend that, as there was no evidence introduced as to the amount of attorney's fees actually charged by respondent's attorneys for their services in conducting the ease "which had been paid or was to be paid" to them by respondent for such services, the court erred in allowing and including in the judgment the attorney's fees provided for in the note. Counsel in their printed brief say: "The allegations contained in the complaint . . . with reference to attorney's fees are all true and were therefore admitted in defendant's answer, and no issue upon such fact was raised, and of course no evidence introduced." Counsel do not contend that the fee provided for in the note and allowed by the court was unreasonable or in any respect unjust. What they claim is that it was incumbent upon plaintiff to prove not only the reasonableness of the fee, but that the amount was actually charged and paid or agreed to be paid by respondent to the attorneys for their services in «conducting tbe case. And in support of tbeir contention they cite and rely upon section 3504, Comp. Laws, 1907, which, so far as material here, provides: "In all cases of foreclosure, when an attorney or counsel fee is claimed by the plaintiff no other or greater amount shall be allowed or decreed than the sum which shall appear by the evidence to be actually charged by and to be paid to the attorney." Section 3505 provides: "In all cases of foreclosure by proceedings in court the attorney's fee shall be fixed by the court in which the proceedings of foreclosure are had, any stipulation in said mortgage to the contrary notwithstanding." The language of these provisions of the statute is both plain and specific and clearly shows that the provisions providing for certain proof in regard to attorney's fees apply to foreclosure proceedings only. By an examination of the entire act of which the sections of the statute just quoted form a part, it will be seen that it relates exclusively to foreclosure proceedings, and that it neither expressly nor by implication refers to or deals with any other subject. Nor do any of the provisions of the negotiable instruments act in any way relate to or deal with actions of foreclosure. The two statutes are not in pari materia, as they in no sense relate to the same general subject-matter.
The case of McCornick v. Swem, 36 Utah 6, 102 Pac. 626, recently decided by this court, was an action to recover on a promissory note that contained a stipulation for an attorney's fee. Plaintiff obtained a judgment in which attorney's fees were allowed. On appeal the judgment was assailed on the ground that there was no evidence to show that the plaintiff paid or was required to pay an attorney's fee. In disposing .of the question, Mr. Justice Price, in a carefully prepared opinion, speaking for the court, says:
"It has frequently been held that, even when the amount has been agreed upon, it is, nevertheless, subject to control by the court; and therefore, if it appears to the court that the amount agreed upon is unfair, unjust, or unreasonable, the court should permit a recovery only for what is reasonable under all the circumstances, the same as where no amount has been agreed upon. It seems to us, however, and quite a number of courts so bold, that prima facie the amount agreed upon should he assumed as the proper fee to he allowed, and unless it is clearly obvious to the court, or is made to appear, that the amount stipulated for is unjust, oppressive, or unreasonable, in view of all the circumstances of the case, the stipulated amount should be allowed" — -citing authorities.
As no claim is made that the amount allowed as attorney's fees is unreasonable, this assignment must be overruled, as the case of McCornick v. Swem, is de- cisive of the question.
Judgment affirmed, with costs to respondent.