Court Opinion

ID: 7810921
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:12:44.319914+00
Date Added: 2024-06-11T16:30:28.174999
License: Public Domain

Hart, J. (after stating the facts). The issue raised by the appeal has been narrowed down to the question of whether or not the two notes for $750 each have been paid. Barnett assumes the affirmative of this issue and the Bank of Pangburn the negative. One of the $750 notes was delivered to the Pangburn State Bank, and the other $750 note was transferred to it by Churchill, the president of the bank, as collateral security. Both notes were held by the Pangburn State Bank and were turned over to the Bank of Pangburn when it was organized and had taken over the assets and assumed the liabilities of the Pangburn State Bank. It is the contention of T. N. Barnett that these two notes were paid when he sold forty acres of the land originally purchased to A. P. Williams and took three land notes given to Williams for $187.50 each and the individual note of Williams for $937.50. On the other hand, it is contended by counsel for the bank that Churchill took these notes and endorsed them to the Western Tie & Timber Company on his own account and that the two $750 notes are due and unpaid. It will be remembered that Churchill was the president of the Pangburn State Bank and was also the local representative of the Western Tie & Timber Company, and that his office was in the bank building. It is true that he acted as the agent for T. N. Barnett in making the sale of the forty acres of land to A. P. Williams; but he also acted for the bank in accepting the notes given for the purchase price of the land by Williams if in fact he did accept them in payment of the two. $750 notes. As president of the bank, it was his duty to collect the debt which T. N. Barnett owed it; and if the notes were turned over to him by T. N. Barnett in payment of the two $750 notes, the bank was bound by his action in receiving the notes in payment of the notes of B'arnett held by it, although. Churchill may have afterward converted the notes received in 'payment to his own use. Binghampton Trust Co. v. Auten, 68 Ark. 299. On this point Barnett testified that Churchill agreed with him to apply the notes given by Williams in payment of the two $750 notes held by the bank and which were a lien on the land originally purchased by Barnett, and which are still owned by him. Indeed, Barnett said that he sold the forty acres of land to Williams for the very purpose of settling with the bank for these two $750 notes. He said that Churchill told him that the bank had the notes and would deliver them to him in a few days; but that the notes were never in fact delivered to him by the bank. Barnett is corroborated by the testimony of his brother who negotiated the sale for him. Again, A. F. Williams who purchased the, forty acres of land testified that at the time he purchased the land the cashier of the bank told him that the title was good and that there was nothing against it. Williams did not know at the time that the bank held the two $750 notes. This testimony, if true, shows that the bank agreed to accept the notes given by Williams for the purchase price of the lands in payment of the two $750 notes. The testimony tending to contradict this is that the two $750 notes were not surrendered at the time the transaction was had. Barnett said, however, that the president and cashier told him that the bank had the notes and would surrender them at a more convenient time in the near future. His testimony in this respect is not disputed. The cashier of the Bank of Pangburn does testify that T. N. Barnett promised to pay the two $750 notes after that bank took over the assets of the defunct Pang-bum State Bank. His testimony, however, is not sufficient to overcome the affirmative testimony to the effect that such payment was agreed upon between the parties at the time Barnett sold the lands to Williams. Barnett states positively that he sold the lands to Williams for the purpose of paying these two notes. There is certainly nothing in the record tending to show that he delivered the notes given to him by Williams to Churchill for the purpose of accommodating the latter and allowing him to transfer them to the Western Tie & Timber Company for his own debt. Barnett did not owe that company anything, but did owe the Pangburn State Bank the two $750 notes. As above stated, the president of that bank had the authority, and it was his duty, to collect from Barnett the debt owed by him to the bank. The testimony shows that the notes for the purchase price of the forty acres of land given by Williams to Barnett were turned over by Barnett to Churchill for the payment of the two $750 notes. The burden was on Barnett to establish payment by a preponderance of the evidence, and we think he has done so. The chancellor erred in holding to the contrary. It follows that the decree must be reversed, and the cause will be remanded for further proceedings in accordance with this opinion.