Bartlett v. Bank Of Mannington

• Decision Date: 07 December 1915
• Docket Number: (No. 2664.)
• Citation: 87 S.E. 444,77 W.Va. 329
• Parties: BARTLETT. v. BANK OF MANNINGTON.
• Court: West Virginia Supreme Court

87 S.E. 444

77 W.Va. 329

BARTLETT.

v.BANK OF MANNINGTON.

(No. 2664.)

Supreme Court of Appeals of West Virginia.

Dec. 7, 1915.

Rehearing Denied Jan. 12, 1916.

(Syllabus by the Court.)

Error to Circuit Court, Marion County.

Action by Fred W. Bartlett against the Bank of Mannington. Judgment for plaintiff, and defendant brings error. Affirmed.

L. S. Schwenck, of Mannington, M. M. Neely, of Fairmont, and John A. Howard, of Wheeling, for plaintiff in error.

W. S. Meredith and Tusca Morris, both of Fairmont, W. M. Hess, of Mannington, and E. F. Morgan and Harry Shaw, both of Fairmont, for defendant in error.

POFFENBARGER, P. Claiming to have been a surety of the defendant for a certain debt, amounting to $6,500 and evidenced by a certain promissory note, the plaintiff obtained a verdict and Judgment for the sum of $5,-417.18, as for money paid by him, as such surety, on said debt. The principal assignments of error assume insufficiency of the evidence to sustain the verdict.

The history of the debt is somewhat lengthy, and is involved in more or less controversy. Its origin dates back, at least, to April 7, 1902, but the plaintiff, Bartlett, did not become connected with it until January 21, 1905. It was originally a part of a debt of $12,500, which was divided into two parts, in July, 1904. It seems to have grown out of transactions between the Bank of Manning-ton and the Mannington Glass Works Company, resulting at one time in indebtedness of the latter to the former, in various forms, amounting in the aggregate to more than the entire capital stock of the bank. That the $12,500 went to the Glass Works Company is clearly indicated by the evidence, but the money was obtained from the First National Bank of Manidngton, as the proceeds of a note, dated April 7, 1902, in which the maker was the Bank of Mannington, and on which the Mannington Glass Works Company and one Virgil T. Clayton, owner of nine-tenths of the capital stock of said company, were in-dorsers. In that form, it was renewed a number of times. On January 2, 1904, however, its form was changed. Clayton became the maker, and the Bank of Mannington the indorser. In this altered form, it was again renewed, April 2, 1904. In July, 1904, it was divided into two notes, one for $6,000 and the other for $6,500, in each of which the Bank of Mannington was the maker. In October, 1904, these notes were renewed, with the Bank of Mannington as maker of the $6,000 note, and E. J. Thomas as the maker of the $6,500 note, and the Bank of Manning-ton indorser thereof. With each of them, there was deposited a collateral note of V. T. Clayton for an equal amount. On January 21, 1905, the Bank of Mannington renewed the $6,000 note. At or about the same time, E. J. Thomas and F. W. Bartlett became the makers of the $6,500 note, and the Bank of Mannington indorser. It was dated January 21, 1905, and substituted for the note for the same amount, made by Thomas October 21,

1904. After further renewals the Bank of Mannington paid the $6,000 note, August 21,

1905. The $6,500 note, due April 21, 1905, was not then renewed. No provision was made for it, until April 17, 1908, when it with the accumulated interest, amounted to $7,9S4.71. At that time, Thomas and Bartlett executed their note for $7,500, which the Bank of Mannington indorsed. As provision for the residue of the debt, Bartlett made his note to Thomas, which was indorsed by the latter and the Bank of Mannington. These notes were renewed September 28, 1908, the smaller one for a larger amount, so as to include the interest. They were again renewed November 21, 1908, and the interest added to the smaller one. In this manner, they were carried along until March 4, 1909, when Bartlett executed his note for $7,500, which S. A. Hendrickson, his mother, and the Bank of Mannington indorsed, and she made her note for $725.84, the balance of the debt, which Bartlett and the bank indorsed. These, together with a $500 debt of Bartlett's added, July 2, 1909, were carried along, and the interest paid by Bartlett, until July 29, 1910, when he paid on account thereof, $3,225.84, reducing the amount to $5,000, for which he executed his note, with S. A. Hendrickson and the Bank of Mannington as indorsers. This was renewed from time to time, until January 18, 1912, Bartlett paying the interest. The payments so made, with interest thereon, constitute the items of his bill of particulars, filed with his declaration asserting right of recovery on the common counts in assumpsit.

Though, in its inception, the debt was admittedly prima facie that of the Bank of Mannington, it is insisted that, in reality, it was the debt of the Mannington Glass Works Company or Clayton, and that, if Bartlett has any right of recovery, it is against one of them. If this position is not tenable, then it is said E. J. Thomas, Bartlett's comaker, assumed the debt and made it his, before Bartlett became a party to the note and that, if he is a mere surety, his right of recovery is against Thomas. If this ground of defense should prove untenable, then it is urged that Bartlett assumed the debt and made it his own, in consideration of the assignment to him of 139 shares of the capital stock of the Mannington Glass Works Company, 39 of which had been held as collateral security for the note, and 100 of which Thomas assigned to him. Finally, it is urged that he is estopped by his conduct from asserting any right against the bank.

The first ground of defense has little or no foundation in the record. No doubt the Mannington Glass Works Company was the ultimate and final beneficiary of the money borrowed of the First National Bank of Mannington, but the loan was made to the Bank of Mannington, on its note, and not to the Glass Works Company. With that transaction, Bartlett had no connection whatever, and, in so far as Thomas took part in it, he acted as cashier of the Bank of Mannington, and he was not a formal party to it in either his individual or his official capacity. Thedefendant bank according to the evidence, had previously loaned the Glass Works Company or Clayton, or both, an equal amount of money, or subsequently made such a loan, but, as to this particular money or transaction, it became the debtor of the First National Bank of Mannington. The exigency which occasioned the application for the loan, or the disposition of the money, after it was obtained, are alike immaterial.

The date of Thomas' alleged assumption of the $6,500 note, as a part of the $12,500 debt, was December, 1904. When the note was first divided, in July, 1904, the two notes were made by the Bank of Mannington. When they became due in October, 1904, Thomas became the maker of the $6,500 note, but it is not claimed he then assumed payment thereof. He denies that he ever did so. He had been the cashier of the bank for several years. By reason of transactions with the Mannington Glass Works Company and other concerns the bank's financial condition had become very bad, and, in September, 1904, its board of directors began an investigation which continued for some time, and resulted in the adoption of strenuous measures against the cashier and some of the directors, for restoration or reimbursement of the bank, on account of bad loans made. Very large amounts were charged to Thomas, on this ground, and he was required to secure them by a deed of trust covering practically all of his property. It was not claimed that he had misappropriated any of the bank's money or was indebted to it for money borrowed. Hamilton, president, and Huey and Tetrick, directors, as indorsers of bad notes, were compelled to make them good. The $6,-500 note in question was not included in the deed of trust. By way of explanation of the failure so to include it, the directors say he was already bound as maker of the note, and they deemed it unnecessary, for that reason, to require him to make a new obligation for it, in any form. They say, further, that he agreed to pay it, in consideration of his misconduct relative to another note of $6,000, in consequence of which the bank sustained a loss of about $13,000. This was a note of Clayton's. They say the cashier was ordered to obtain a new note of his, indorsed by his mother, for $6,500, the amount of the old note and accumulated interest, and that, Clayton having brought in such a note, Thomas failed to substitute it for the old one, and, on the contrary, in violation of the orders of the board of directors, gave Clayton cash on it, and then afterwards, by his failure to protest the note, lost the indorsement of Josephine B. Clayton, the mother of V. T. Clayton. All of this, except the loss of the indorsement, which he says was practically worthless, or, at least, wholly inadequate, Thomas denies. He positively and emphatically denies that he let Clayton have the money on the new note.

An admitted, unequivocal and vigorous denial of the agreement of December, 1904, was made by Thomas, less than two years after that date, and more than seven years before the date of his testimony in the trial of this case. By a written agreement, dated September 21, 1906, and a contemporaneous assignment, Virgil T. Clayton, owner of 450 shares of the capital stock of the Mannington Glass Works Company and Josephine B. Clayton, his mother, owner of some right, title, or interest in or respecting certain glass-blowing machines used and operated in the factory of the Mannington Glass Works Company, made over and transferred to the Bank of Mannington, E. J. Thomas, J. O. Huey, M. F. Hamilton and the widow and heirs of J. M. Tetrick, all of said shares of stock and the interest in the glass-blowing machines, for and in consideration of their release of Virgil T. Clayton from all liability to the bank and the other parties above named or any of them, on account of notes, obligations, duebills, accounts, choses in action or any other evidence of indebtedness held by-any of them, or to which they...