Federal Intermediate Credit Bank v. Cosby

1928 OK 635, 272 P. 436, 134 Okla. 1, 1928 Okla. LEXIS 778
CourtSupreme Court of Oklahoma
DecidedOctober 30, 1928
Docket18147
StatusPublished
Cited by2 cases

This text of 1928 OK 635 (Federal Intermediate Credit Bank v. Cosby) is published on Counsel Stack Legal Research, covering Supreme Court of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Federal Intermediate Credit Bank v. Cosby, 1928 OK 635, 272 P. 436, 134 Okla. 1, 1928 Okla. LEXIS 778 (Okla. 1928).

Opinion

BENNETT, C.

The parties occupy the same position as in the trial court. The Federal Intermediate Credit Bank of Wichita, I-Can., a corporation; hereinafter called “credit bank,” plaintiff, brought suit in district court of Harper county, Okla., against Floyd Cosby, on a promissory note and to foreclose a chattel mortgage. Plaintiff’s petition alleged, in substance, that plaintiff is a federal corporation chartered by the Federal Farm Loan Board under provisions of the Agricultural Credits Act of 1923, with its principal place of business at Wichita, Kan.; that First National Loan Company of Buffalo, Okla., hereinafter called “loan company,” is a corporation organized' under the laws of Oklahoma, with its principal place of business at Buffalo, Okla., and that it is authorized to lend money to persons engaged in agriculture, stock raising, etc., and to indorse and sell notes and securities therefor to any- Federal Intermediate Credit Bank, and that said loan company is now insolvent.

That on November 6, 1923, Floyd Cosby, for valuable consideration, executed his note and chattel mortgage securing same to said loan company for $3,700 payable August 5, 1924, copies whereof are attached to the petition. The note is indorsed in blank by payee. That on November 22,1923, for value, the loan company indorsed and delivered said note to plaintiff, which bank is now owner and holder thereof, and that same is due and unpaid.

Defendant admits the execution of the note, but says that plaintiff is not a purchaser thereof from the loan company, and that defendant received no consideration from said loan company; that the credit bank simply organized the loan company as intermediary in order to comply with federal laws governing such banks, which were not authorized to make loans direct to individuals generally, but only to such banks, trust companies, credit and loan companies, as furnished loans to persons engaged in stock raising, farming, etc., and to the extent of the accommodations extended to such persons for that purpose. That the credit bank virtually organized the loan company and took all the necessary steps for such purpose, including the furnishing of plans and data for its meetings, forms of charter, articles of incorporation, by-laws, resolutions, and all other steps required by and precedent to its right to do business. That plaintiff advised and required the loan company t'o conduct all of its business under the direction and control of plaintiff, and that all loans made, together with applications therefor and the securities thereon, be submitted to plaintiff for acceptance, and that the note in suit was one executed in conformity with this arrangement. That the money for this loan was furnished by plaintiff, the same being sent by it to the loan company for distribution, or to take up prior incumbrances on property; that the relationship existing between plaintiff and the loan company during all the transactions and dealings between the parties to this litigation and relative to the matter in controversy was that of principal and agent, the credit bank being the principal and the loan company its agent, and with respect to these and all other matters, the credit bank permitted the loan company and one Earl Brink, its secretary and' treasurer, to transact all the business connected with the loan, the subject of this controversy, and also with reference to other similar loans, and to hold themselves out to the public as having authority to handle and conduct said business for plaintiff, permitted said parties to release mortgages, collect moneys and principal and interest from borrowers, transmit same to plaintiff, extend loans and take additional security for same, and that all of such acts and *3 conduct were confirmed, adopted and ratified by plaintiff; that defendants relied upon tbe apparent authority and right of said, loan company and said Brink to transact said business, receive payment on said notes, release chattel mortgages, and that such reliance was justified by acts of plaintiff; that other payments than those in controversy here, but on the same note, were made by defendant to said Brink and said loan company, which were received and accepted without protest by plaintiff; that on November 4, 1924, the sums of $109.90, and later, on November 20th, the sum of $1,433.30 were paid to said Brink by defendant relying upon the agency of said loan company and said Brink, and that it was not until the loan company became insolvent thereafter that plaintiff notified the defendant to make payments direct. Defendant made other payments sufficient to liquidate the note in suit.

Plaintiff’s reply denied all the allegations with respect to agency, the method of incorporating the loan company, and denied that the loan was made direct by plaintiff, but alleged that it was a purchaser for value in due course of said paper, and alleged that the loan company had a capital stock of $10,000, which was later increased to $16,-400.

The reply denies the allegations contained in paragraph 7 of defendant’s answer, wherein is set out the statement that the credit bank was the principal and the loan company was the agent in all the transactions and dealings involved in this controversy, and in paragraph 3 of said reply, plaintiff denies it authorized E. B. Brink of the loan company to collect the said note or any part thereof, and denies that it ratified the action of said E. B. Brink or the loan company in making the alleged collections, and says that if said E. B. Brink or the loan company made said collections, they acted as agents of defendant, Ployd Cosby. The ease was tried to a jury, and from a verdict on all issues in favor of defendant, plaintiff appeals.

Plaintiff, as grounds for reversal, sets out in his brief 24 alleged errors. He first contends the court erred in permitting defendant to amend his answer after all evidence had been introduced' by adding thereto paragraph 8%. There are several reasons why this is not reversible error: (1) That if the plaintiff were taken by surprise and prejudiced by the allowance of amendment, application should have been made immediately to the trial court to continue the case upon that ground, but, as shown by the record he took his exception without asking further relief of the trial court. W-e think, under the circumstances, that this court would not be warranted in now granting a new trial or reversing the same. Lewis v. Bandy, 45 Okla. 45, 144 Pac. 624, which holds in the fourth paragraph of the syllabus:

“Permission to amend a pleading at any stage of the trial rests in the sound discretion of the trial court, and same will not be disturbed, unless a clear abuse of discretion . is shown.”

(2) The original answer set out in great detail and with much reiteration that the relations between the plaintiff and the loan company, with reference to all the transactions and dealings concerning the matters in controversy herein were those of principal and agent, the plaintiff being the principal and the loan company being the agent, and that the loan company was at all times in respect to all these matters governed by and under the advice, control and direction of plaintiff. In paragraph 4 of the reply, plaintiff denies the allegations contained in paragraph 7 of the defendant^ answer, which is the one containing the foregoing allegations as to agency, and in paragraph 3 of the reply plaintiff uses the following language:

“This plaintiff denies it authorized the said E. B.

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Bluebook (online)
1928 OK 635, 272 P. 436, 134 Okla. 1, 1928 Okla. LEXIS 778, Counsel Stack Legal Research, https://law.counselstack.com/opinion/federal-intermediate-credit-bank-v-cosby-okla-1928.