San Jose Savings Bank v. Stone

McKee, J.: The action out of which this case arises was upon a promissory note, executed by the defendant and delivered to the plaintiff, for fourteen thousand nine hundred and fifty-six dollars and eighty-six cents, payable to the order of the plaintiff on November 5th, 1878. In his answer, the defendant denied indebtedness upon the note, and ownership by the plaintiff, and by way of separate defense, averred, that the note had been executed and delivered as security for any sum of money, which might be found due to the plaintiff, upon settlement of an open, current, and mutual account which existed between the parties concerning certain deposits made by the defendant from time to time with the plaintiff, as his banker, and certain sums of money paid by the plaintiff from time to time for and on account of the defendant. But the note, though executed and delivered for that purpose, was not to be considered as a settlement of the account, nor as evidence of the amount due upon it. It was to be settled as though the note had not been given; and upon the settlement and ascertainment of the balance due, the note was to be delivered up to the maker. It was further averred that [185]at the commencement of the action, the account had not been settled, and that, on the day of the execution of the note, the plaintiff was indebted to the defendant on a settlement of said account fifteen thousand three hundred and seventy-seven dollars, for which the latter asked judgment.

Upon the trial of these issues the plaintiff produced the note, proved its execution, and the payment of several sums which were credited upon it, after which the defendant proved that the books of the bank, in connection with the pass-books and checks of the defendant, had been examined by an accountant and expert in book-keeping, who found a few errors in the account between the plaintiff and the defendant, principally in the computation of interest on account of taking wrong dates; these errors amounted to about thirty-six dollars. It also appeared that the transactions of the defendant with the bank, for a number of years, consisted, principally, of deposits made by him from time to time; of checks drawn by him on his own account; of checks left by him in the bank for collection; and of drafts drawn in his favor by third parties, which were sold and assigned by him to the bank. Whenever the defendant made deposits of money, which were to be applied to his credit upon the books of the bank, they were first entered, at the time the deposits were made, in the defendant’s pass-book, and then the amount of the deposit and the name of the defendant, as depositor, were entered upon a bank-tag, from which the amounts were, at the close of the business hours of each day, transcribed upon the account of the depositor in the books of the bank, and also entered among the items of the cash account of the bank. Of the drafts drawn in the defendant’s favor and deposited with the plaintiff, many appear to have been drawn by a banking-house in San Francisco; and for most of them, credit was given by the plaintiff both upon the books of the bank and the pass-books of the defendant. But there were seven checks aggregating nine thousand four hundred and fifty dollars, which happen to have been so drawn and to have been paid, for which no credit appears either in the bank-books or the pass-books; and it is claimed by the defendant that he was entitled to a credit, upon his account .with the bank, of that sum of nine thousand four hundred