Court Opinion

ID: 7117760
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:34:32.67309+00
Date Added: 2024-06-11T16:13:58.991413
License: Public Domain

Salinger, J.
(dissenting). I. It seems to me the conclusion reached by the majority is unattainable upon the facts which the majority sets out.
Were it decided by McNight v. Parsons, 136 Iowa 390,. that good faith is a jury question merely because the cashier gave the testimony, such a rule can certainly not be followed to its logical end. If it may, then no verdict can ever be directed, though the testimony of the plaintiff is uncontradicted. The mere fact that such testimony is given by the plaintiff would prevent a directed verdict for plaintiff. If that testimony is given "by the cashier is sufficient impeachment to send a case to the jury, it cannot be explained why the direction of a verdict for a bank that bought negotiable *277paper was ever sustained. Ordinarily, the testimony to want of notice and good faith must come from someone who has some managerial position in the bank. So if all that is needed to make cases of buying paper jury cases is that the cashier or buyer gave such testimony, then there was never any occasion to formulate rules as to when such cases were not for the jury. No such rules need be made, because no such case could exist. I think that, since it must be conceded that' the testimony of the buyer may warrant a directed verdict in his favor, it cannot be the law that the case must always go to the jury because the testimony for the bank is given by its cashier. .
II. The opinion discloses there was undisputed testimony that such discounts as are involved in the case we have were wholly for the cashier, and that the president of the bank did not deal with such discounts. It is shown without dispute that it was “the custom of the bank that these matters should be left.wholly to the cashier.” Though it is not disputed that, when a corporation leaves certain matters to a particular officer, other officers need not testify to want of notice and the presence of good faith, yet that rule is disregarded by the majority; and the opinion defeats ' the bank because its officers other than the cashier did not testify. The only attempt at explanation why this is done though the rule in question is adhered to, is, in effect, that the president of the bank and still others were active, constantly present, and that customers could have access to these other officers. It is further pointed out that an assistant cashier was in charge of the bank during the noon hour, though it is conceded he was not authorized to pass on discounts or to purchase paper. If the cashier was the officer who alone dealt with such discounts as the one in this case, I am at a loss to understand how it matters that others were his superior officers, and were active and present and accessible. The reasoning of the majority at this *278point is simply a non sequitur. If, under the law, notice to the bank could be given only through the cashier, and if his good faith w-as the good faith of the bank, how does it matter that the president did not disclaim notice nor testify to his own good faith? How is it important that an assistant cashier had charge of the bank at the noon hour, when it is conceded that he had no authority to discount or purchase pajper ? How does it matter that a discount committee goes over the notes once a month, at the monthly meeting of the directors? I take it that the directors’ committee did not get to the notes in suit here until after the cashier had bought them. How does it matter that the president and the assistant cashier were dealing actively with the public in behalf of the bank, since the transaction before us was one that they were not in charge of ?
Next, comes the remarkable statement that it should be observed “the cashier was in no manner corroborated in what he testified in relation to want of knowledge concerning the infirmity inhering in the note.” When was it ever held before that Avant of knowledge and the presence of good faith must be submitted to the jury unless the person testifying on these heads Avas corroborated? How could he be corroborated? When he says he had no notice, he testifies to a negative necessarily resting in his own knowledge. When he testifies- that he acted in good faith, he speaks to what necessarily rests in his own knowledge, and involves the state of his OAvn mind. It is clear that, though he testifies he had no notice and acted in good faith, yet testimony might impeach such statement. But how can it possibly be corroborated? Is someone other than the cashier to testify that the cashier had no notice, and acted in good faith? If it were attempted, it would not be permitted.
III. Next, and finally, affirmance is proposed because the cashier did not know the makers; that-he felt they lived *279at Cedar Bapids; and that he made no inquiry with reference to them further than this. At this point, then, the majority proceeds on the theory that a jury case is made whenever inquiry does not go as far as it might, and is not pursued to a point which might have disclosed an infirmity in the paper. This overlooks that negligence is not material; that failure to make inquiry is not material, unless there be evidence- that inquiry was purposely and in bad faith' abstained from. It will not send notice to the jury if all appears is that mere ground of suspicion was known to the buyer, or that he was negligent. (Arnd v. Aylesworth, 145 Iowa 185, at 189), or that all that appears is that no inquiry was made to ascertain the existence of possible defenses (First Nat. Bank of St. Thomas v. Flath, 10 N. D. 275 [86 N. W. 867]). The paper is not impeached merely because the buyer is put on suspicion, and was careless as to making inquiry. Lehman v. Press, 106 Iowa 389. It will not send good faith to the jury where no more appears than that there was knowledge of suspicious circumstances. First Nat. Bank of St. Thomas v. Flath, 10 N. D. 275 (86 N. W. 867). It is not sufficient that “ the circumstances were such as to invite inquiry” (Lake v. Reed, 29 Iowa 258, Sinkler v. Siljan, 136 Cal. 356 [68 Pac. 1024]), nor that there are facts and circumstances which should put a reasonable man upon inquiry (Collins v. Gilbert, 94 U. S. 753), nor that there was failure to make such inquiry as common prudence dictated (Lake v. Reed, 29 Iowa 258), —and this is so, though pursuing such inquiry would have discovered an infirmity (Central State Bank v. Spurlin, 111 Iowa 187), — nor that there was a want of diligence in making inquiry, and the note was taken under suspicious circumstances (Trustees of Iowa College v. Hill, 12 Iowa 462). The authorities expressly negative any obligation on part of the holder to prove diligence in ascertaining, and the holder is charged with the infirmity only where bad *280faith is shown. Voss v. Chamberlain, 139 Iowa 569, 577. It would seem, then, that no case was made for the jury because the plaintiff bank did not inquire beyond what it did. Now, after having made a case for. the jury because no inquiry' was made, or because inquiry was not sufficiently pursued, we find it disregarded that inquiry was, in fact, made. When that is passed, the majority nest bases its opinion on an imagined departure from a custom to inquire, the warrant béing testimony that the bank did not make a practice of buying the paper of a man living several hundreds of miles away, without inquiry. At this point, it is again overlooked that inquiry was made. And the testimony is, further, that inquiry did not go as far as it might, because, the paper being a very small item in the relatively vast business of this bank, it was bought in reliance upon the endorsement of the seller, who lived in the town where the bank did business, and had a credit at that bank. I would reverse.