Court Opinion

ID: 8036108
Source: CourtListenerOpinion
Date Created: 2022-09-09 03:21:01.137504+00
Date Added: 2024-06-11T16:37:08.309937
License: Public Domain

Rose, J.,
dissenting.
I do not concur in the affirmance of the nonsuit below. In my view of the record and the law, defendant did not prove any defense to the case made by plaintiff. It seems to me there should have been a judgment against defendant for the full amount of plaintiff’s claim.
The instrument on which plaintiff brought suit is- a negotiable promissory note for $2,500 dated October 5, 1928, and payable December 5, 1928. It was executed by defendant, the debtor and maker, and delivered to the State Bank of Minatare, the creditor and payee. In banking transactions the Plattsmouth State Bank, plaintiff, for value paid to and received by the State Bank of Minatare, the original payee, became the owner and holder of the note without indorsement October 8, 1928, and never surrendered possession or parted with title. Defendant knew, or was chargeable with notice, that the note was transferable by delivery before due and he gave currency to it as such in a commercial transaction. He owed to plaintiff, the owner and holder, the debt evidenced by the note. His purported defense is that he paid his obligation to the State Bank of Minatare, the original payee, without notice of the assignment or transfer. On the undisputed facts he should be held amenable to the law which declares:
“Ordinarily, no duty rests upon the indorsee or holder of a negotiable note or bond to notify the maker of such ownership; but the duty is upon the maker to seek out the holder of such instrument when making payment.” Davis v. Polak, 126 Neb. 640.
Defendant’s obligation on the note was to the owner and holder of it and not to the State Bank of Minatare which had already received value therefor from its assignee, plaintiff.
Defendant did not by his own testimony or otherwise *277show any legal right or authority to pay to the State Bank of Minatare the debt evidenced by the note. That bank was not the owner or holder or an agent authorized to receive payment. It was closed on account of insolvency February 23, 1929. Chargeable with notice that the note was transferable by delivery before due, and without reason to assume it was still held by the State Bank of Minatare, defendant’s explanation of his purported payment without notice of the assignment may be summarized as follows: January 18, 1929, he deposited in the State Bank of Minatare a draft for $6,148.92; gave that bank his undated personal check at night for $2,558.34, January 18 or 19, 1929, to pay the 2,500-dollar note with interest; asked for the note when tendering the check, or immediately thereafter, and was told it had been “sent out.”
The evidence does not tend to show that the State Bank of Minatare charged the banking account or the deposit of defendant with the amount of the check before he knew the note was not in possession of the original payee and could not be surrendered. He knew he was entitled to the note when making payment, because he asked for it. In any event he could have' protected both himself and plaintiff by simply demanding the return of his check, or, in the event of a refusal, by an order in writing to stop payment of the check. This required only ordinary business sense. The only proper inference is that defendant put his trust in the State Bank of Minatare and made it his agent to pay his debt and to procure for him the return of the note.
Plaintiff did not perpetrate on defendant any fraud in the transactions connected with the note, or trust the State Bank of Minatare to collect the debt due, or authorize such collection, or create by negligence or other means a method of misleading or wronging defendant. I have an abiding conviction that the record presents a typical case for the application of the following doctrine:
“Where one of two parties to transactions must suffer a loss through the misconduct or the wrongs of a third *278person, the superior equities will be determined from all of the material circumstances, and the burden will be allowed to fall where equity and justice place it.” Omaha Elevator Co. v. Chicago, B. & Q. R. Co., 104 Neb. 566. Followed in Johnson v. Kindig, 127 Neb. 360. See, also, Rehmeyer v. Lysinger, 109 Neb. 805; First Nat. Bank v. First Nat. Bank, 111 Neb. 441; Deleski v. Peters Trust Co., 115 Neb. 547; Nebraska State Bank v. May, 117 Neb. 262.
Entertaining these views, I respectfully dissent, fearing that the rules of law announced by the majority, when applied to the undisputed facts in the case at bar, may become disturbing factors in commercial and banking law.
Raper, District Judge, concurs in this dissent.