Court Opinion

ID: 6620651
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:29:24.751632+00
Date Added: 2024-06-11T15:58:41.920392
License: Public Domain

ON MOTION POE EEHEAEING.
ELLISON, J.
The only objection to the foregoing opinion which we care to- notice by further comment is that taken to the statement that there was substantial evidence having a tendency to show that defendant had reasonable cause to believe that a preference was intended'when the twelve hundred dollars was paid. We have gone over the evidence again and find that we were abundantly justified in making that statement. We will not attempt to set out such evidence, but will merely refer to some of the more important portions. In the first place the defendant, through its chief officer, had every opportunity to learn and know the financial condition of the McNairs. The defendant was a bank and the plaintiffs were merchants in the same town, their respective places of business being near to each other. The McNairs did their banking business with defendant. They became borrowers of defendant from the start and continued so to the end. Daniel McNair (the principal one to be considered) had some land in Johnson county which was under mortgage. His residence was in his wife’s name and so was a certificate of stock in a bank at Holden for one thousand dollars. The firm’s bank account was dotted all through with overdrafts and from beginning to the end. showed an unprosperous merchant. The balances, almost without exception, were small; until at the end the balance was merely nominal — a few cents. We readily understand that small balances may be appropriate to small merchants, and that they need not necessarily indicate de*247cline in financial condition. But those exhibited in the record ought not to encourage belief in the mind of a reasonable man that the owner of such account could, with safety to himself, borrow more than two thousand dollars, especially when the borrower’s chief possessions were either mortgaged, or in his wife’s name. At the time the McNairs began to become indebted to the bank in April, 1898, the stock of goods invoiced (or at least it was so represented to the bank) the sum of $4,300; yet in about twenty months thereafter, with triple increased debt to defendant, it was sold for $1,500.
The first loan to- McNairs was made in April, 1898, for $500. The second was in June, 1898, for $1,200, and the third, for $400, was made in April, 1899. The first one was not paid but renewed along until December 22, 1899. The last one was renewéd until December 5 when the $300 was paid and the balance ($100) was paid December 22. The second one, for $1,200 was paid on December 30 from money realized on the sale of stock, and represents-the sum in controversy. The date of McNairs’ last balance, twenty-four cents, was December 9. They made no further deposits. The defendant, through its chief officer, was urging payment of this indebtedness, in all $2,100, through the month of December, yet some of it was not due; that is, the time of last renewal fiad not expired. He succeeded in collecting the two smaller notes and then, finally, the large one. Defendant’s officer knew that in April, 1898, the stock was valued at $4,300. He knew that at the last of December, 1899, less than two years thereafter, it had become reduced to $1,500 and this with an increasing-debt and a bank account become extinct. We have not referred to all the testimony and circumstances bearing on the point, but have said enough to indicate what kind of evidence we deem material as tending to support the affirmative of the issue that defendant had reasonable cause to believe that a preference was intended when it received the payment in controversy. If the *248trial court sustained a demurrer ou tlie ground iliat there was no evidence tending to sustain that issue, the effect of such ruling would be to say that the evidence to which we have called attention, and other of like kind, was not worthy of consideration. This we would regard as error.
The motion is overruled!