Atwater v. A. Stromberg

• Decision Date: 17 January 1899
• Docket Number: 11,346 - (207)
• Parties: JOHN B. ATWATER v. A. STROMBERG
• Court: Minnesota Supreme Court

77 N.W. 963

75 Minn. 277

JOHN B. ATWATER v. A. STROMBERG

Nos. 11,346 - (207)

Supreme Court of Minnesota

January 17, 1899

Action in the district court for Hennepin county by the receiver of the Columbia National Bank, insolvent. From an order denying a motion for new trial, Simpson, J., after ordering judgment in favor of plaintiff, defendant appealed. Affirmed.

SYLLABUS

Promissory Note -- Consideration -- Issue of Stock in National Bank.

Held on the facts stated in an action brought by the receiver of a national bank upon a promissory note executed and delivered by defendant to such bank, when it was a going concern, in consideration of the issuance and delivery to defendant by the bank of its certificate for certain stock shares therein that there was no want of consideration for the execution and delivery of the note.

Promissory -- Action by Receiver -- Secret Agreement no Defense.

And after the bank has become insolvent, and the rights of creditors have become vested, such defendant cannot set up as a defense to an action by the receiver on the note a secret agreement with the president of the bank that he should have the option of surrendering the stock when the note matured, and having it returned.

Weed Munro, for appellant.

A. G. Braden, J. B. Atwater and E. C. Garrigues, for respondent.

OPINION

COLLINS, J.

Action upon a promissory note for $700 executed and delivered by defendant to a national bank when it was a going concern. Before the note matured the bank suspended business, and plaintiff was thereupon appointed its receiver by the comptroller of the currency of the United States. At the time of the execution and delivery of the note the bank issued and delivered to defendant its certificate for seven shares of its capital stock, of the par value of $100 each. Concededly, there was no other consideration for the note.

Concurrently, and as part of the same transaction, the president of the bank signed and delivered to defendant a writing in which, after reciting that defendant had purchased the stock shares for which he had given his note, it was stated that, when the note fell due, defendant, at his election, could exchange the stock shares therefor. The court also found that at the same time the bank president stated to defendant that the note was solely for the accommodation of the bank, and that he would never be called upon to pay it. On the facts as found, judgment for plaintiff receiver was ordered, and the appeal is from an order denying a new trial.

Assuming the law to be, as stated in Scott v. Armstrong, 146 U.S. 499, 13 S.Ct. 148, that the receiver

"Took the assets of the * * * bank as a mere trustee for creditors, and not for value and without notice, and, in the absence of statute to the contrary, subject to all claims...