APPEAL from a judgment of the Superior Court of the County of Pima. Fred W. Fickett, Judge. Judgment reversed and cause remanded, with instructions.
Messrs. Myrland & Samuelson, for Appellant.
Messrs. Kingan & Darnell and Mr. Frederic G. Nave, for Appellee.
Arizona Southwest Bank, a corporation, hereinafter called appellant, brought suit [38 Ariz. 395] against Charles H. Odam, hereinafter called appellee, on a promissory note executed by the latter in favor of the Arizona Military Institute, a corporation, hereinafter called the Institute, which note appellant claimed had been duly assigned to it by the Institute. Appellee answered, admitting the execution of the note and its possession by appellant, but denied that the latter was the legal holder thereof, and alleged that the purported transfer to appellant was made without authority from the Institute. The case was heard before the court sitting without a jury, and findings of fact were made. Upon these findings the court rendered judgment in favor of appellee, and from said judgment this appeal is taken. The following facts are undisputed and the questions raised on the appeal are, with one exception, purely legal:
In 1929 the Arizona Military Institute was organized as a nonprofit corporation under the laws of the state of Arizona, with its principal place of business in Phoenix. Its purpose was principally to conduct a military institution to be used as an academy or college of learning. The Institute endeavored to finance itself principally by the sale of certain preferred stock, and a considerable sum was subscribed by various parties, part being paid in cash and part by notes, among which latter was the one in question in this case, which was executed by appellee on July 19, 1929.
On July 3d appellant received a letter which reads as follows:
"Headquarters Arizona Military Institute
"Tucson, Arizona, July 3rd, 1929. "Arizona Southwest Bank,
"Tucson, Arizona. "Gentlemen:
"At the last meeting of the Board of Trustees of the Arizona Military Institute the Arizona Southwest Bank was appointed a depository for the funds of the Institute.
[38 Ariz. 396] "According to our By-Laws checks may be signed by the President, Vice-President, Secretary and Treasurer, and countersigned by any of the above (except the one signing), the Quartermaster or the Auditor.
"Mr. R. Ward Russell has been appointed Acting Quartermaster pending the arrival of Major D. D. ...