Court Opinion

ID: 8191147
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:14:09.774383+00
Date Added: 2024-06-11T16:40:36.926228
License: Public Domain

WiNSLow, C. J.
The circuit court found in substance that it was agreed between the bank and Rickey and Smith that if Smith would sign Rickey’s note for $1,500 and place it with the bank as security the bank would honor Rickey’s checks or orders for cattle bought on the following day not exceeding $1,500, it being also agreed that Rickey should at once ship the cattle to Chicago, sell them, and deposit the proceeds in a Chicago bank to the credit of the defendant bank, the note to be used only to indemnify the bank against loss on its advances in case the proceeds of the sale of the cattle were insufficient to reimburse the bank for its advances.
There was ample evidence to support these findings. The arrangement was not a usual one, perhaps, but we see no ground upon which it can or ought to be condemned if entered into in good faith, with simply an honest intent' to protect the bank from loss in making the proposed advances to Rickey. There does not appear to be any ground upon which the good faith of the parties can be successfully challenged here. It is quite plain that under this arrangement the bank never became indebted to Rickey in any sum. The formal discounting of the note and the entry of the $1,500 on the books to Rickey’s credit were simply bookkeeping entries made for convenience in disbursing the moneys which the bank had agreed to advance; but they made no necessary change in the legal relations of the parties. The bank was required to honor Rickey’s checks for.cattle bought on that day, but (under its arrangement with Smith) could not honor a check for any other purpose. If it had become Rickey’s debtor it would be obliged to honor any check. This test seems decisive.
By the Court. — Judgment affirmed.