Bank of Amsterdam v. Welliver
| Decision Date | 03 December 1923 |
| Citation | 256 S.W. 130,215 Mo.App. 247 |
| Parties | BANK OF AMSTERDAM, Appellant, v. CARL WELLIVER and BURDEE M. WELLIVER, Respondents. * |
| Court | Kansas Court of Appeals |
Appeal from Circuit Court of Bates County.--Hon. C A. Calvird Judge.
AFFIRMED.
Judgment affirmed.
Silvers & Silvers for appellant.
DeArmond & Maxey for respondents.
--This is an action to recover a balance of $ 3185.70 alleged to be due plaintiff bank on a promissory note of $ 4187, dated October 31, 1921, due six months after date, executed to the bank by the defendants Carl Welliver and Burdee M. Welliver his wife. The note appears to be a renewal of a former note for the same amount, dated December 31, 1919.
Defendants set up that they were released from said indebtedness, and that said note was to be surrendered to them pursuant to a proposal made by plaintiff's cashier, F. E. Alder, to defendants, and agreed to and performed by them, that if defendants would convey by warranty deed to plaintiff, or to some one for plaintiff, their residence in Amsterdam, Mo., and Carl Welliver would execute his note to the bank for $ 500 and would furthermore convey his half interest in a garage known as "The Peoples Garage" in Amsterdam, Mo., to his copartner Edgar Smiser, the latter would assume and agree to pay all of the indebtedness of the garage and plaintiff would accept him in lieu of defendants and would deliver to defendants the promissory note held by plaintiff against them, and defendants' indebtedness to the bank would thereby be fully discharged.
Plaintiff's reply denied that the cashier made any such agreement, and further set up that if such agreement was made, it was beyond the power of the cashier to make, since he was not authorized to do so by the Board of Directors and his act in so doing, if he did it, was never ratified by the board.
After a trial, the jury returned a verdict for defendants, and the Bank has appealed.
Several years prior to the date of the note sued on herein, one Moore owned a half interest in a garage in Amsterdam, Mo., known as "The Peoples Garage" and Edgar Smiser owned the other half.
The garage was indebted to the bank. Defendant Carl Welliver bought Moore's half interest in the garage and gave his note to the bank for one-half of the garage indebtedness, and the Bank released Moore from all of said indebtedness. In other words, as to Moore's interest in the garage and his half of the garage indebtedness to the bank, Moore stepped out and Carl Welliver stepped in, all with the knowledge, consent and approval of the Bank.
Thereafter further indebtedness accrued against the garage, and Carl Welliver owed a note of $ 500 to the bank and another note of $ 450. The $ 500 note is not involved herein and the $ 450 note was paid off and marked paid in January, 1921.
On January 7, 1921, defendants executed to the bank a deed of trust on their residence property in Amsterdam, securing a note for $ 1500 which stated on the margin thereof that it was given as collateral security for the note of $ 4187.50, dated December 31, 1919; and this note and deed of trust continued to be held by the Bank as collateral security for the renewal note which is sued on herein.
There is no dispute over the above and foregoing facts. Neither is it disputed that on March 18, 1922, the defendants did convey their residence to F. E. Alder who took and held it for the bank, and said defendants also entered into a written agreement with Smiser whereby, "in consideration of $ 1 and other considerations as listed below," said defendants agreed to convey to Smiser the garage building and to execute a bill of sale to him for all of Carl Welliver's interest in the personal property of said garage, consisting of "all the equipment, fixtures and stock" and said Smiser agreed to assume and pay all indebtedness of said garage and to release the Wellivers from any and all of such indebtedness. And said defendants, the next day, conveyed said garage building and its stock and equipment to Smiser. Said Carl Welliver also, at the time of making the deed to Alder and the contract to sell to Smiser, executed a note to the plaintiff bank for $ 500. The papers for these various transactions were concededly all drawn by the plaintiff's cashier F. E. Alder. On March 20, 1922, Smiser, after obtaining Welliver's half interest in the garage and contents, executed to the bank a deed of trust on the former for $ 1000 and a chattel mortgage on the latter for $ 1500.
Defendant Carl Welliver testified that Alder proposed to them that if they would convey their residence and would sell the half interest in the garage to Smiser and execute to the bank the $ 500 note as above indicated, the Bank would take Smiser for the indebtedness and would surrender to Welliver his notes. In this he was corroborated by Armentrout then assistant cashier in the plaintiff bank. It was also corroborated by J. I. Wolfe, an uncle of Mrs. Welliver, who afterwards went to see Alder to obtain the surrender of the Welliver notes which Alder had not surrendered; and he says that Alder admitted that the agreement was as heretofore stated. We fail to find that the cashier anywhere denied this testimony on the part of Wolfe. The cashier denied, however, that any such agreement was made.
Defendants' testimony is that after they had performed their part of the agreement they asked for the notes the bank held, and the cashier told them he could not get them then as they were in the safe and it was locked; but he would get them in a few days and send them to defendants; that he told them not to worry about the notes for they were paid; that several times after that they saw him and he finally started to write a statement showing they were paid, but desisted, promising he would send the notes by mail.
It is conceded that on April 12, 1922, the cashier wrote to Carl Welliver saying:
The cashier's explanation of this statement in his letter is that it referred only to the $ 450 note (which had been paid long before that) and to the $ 1500 collateral note. But inasmuch as the residence property securing this collateral note had been conveyed to Alder for the bank, which Alder says was done merely to save expense of foreclosure, it is not easy to see why these two notes, if they were all that were meant, should not have been returned to Welliver, nor what there was about them that the directors would have to make "arrangements to adjust."
It would seem there was ample evidence to justify the jury in finding that the cashier made the agreement contended for by defendants.
The cashier on May 29, 1922, sold the residence conveyed to him for the bank by defendants. He says the contract of sale was for $ 1200 and "that upon receiving the proceeds" he credited the note sued on herein with $ 1199.50 and turned the money over to the bank.
It is urged that the cashier was without authority or power to make such a contract if one was made. The transaction certainly does not come within section 11792, Revised Statutes 1919, depriving the cashier of power to "indorse, pledge or hypothecate" any notes of the bank without written record of authority from the board of directors. For here there was nothing of the sort, but rather a transaction whereby defendants paid their indebtedness to the bank by conveying their residence and garage property to the parties designated and executing Welliver's note for $ 500. However, aside from this statute, a cashier has no power, merely by virtue of his office, to do an act outside the scope of his ordinary duties as cashier. Ordinarily, he has no power to discharge a debtor without payment, nor to release a surety. [People's Savings Bank v. Hughes, 62 Mo.App. 576; Daviess County Savings Assn. v. Sailor, 63 Mo. 24; Bank of Mountain View v. McMinds, 210 Mo.App. 630, 634; Hodiamont Bank v. Franklin, 215 S.W. 503, 505.] Nor can he, ordinarily, release a debtor or a surety by a mere contract or promise, though the bank be estopped from collecting such debt by reason of the acts and representations made by the cashier in the line of his duty. [Bank of Neelyville v. Lee, 196 Mo.App. 496.]
But, in the case at bar, there is much room for the contention that this was not a mere agreement to surrender a note or to release the bank's debtor, but it was a settlement made by the cashier whereby he secured payment of at least a part of said indebtedness and secured another debtor in the place of the one released. It has been held that a cashier, who is the executive officer of the bank, may, in an effort to collect and secure the bank's indebtedness, exchange a note for a book account due the debtor, or in other words accept a book account in payment of...
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