Bohning v. Caldwell

• Decision Date: 19 January 1926
• Docket Number: No. 4501.,4501.
• Citation: 10 F.2d 298
• Parties: BOHNING et al. v. CALDWELL.
• Court: U.S. Court of Appeals — Fifth Circuit

10 F.2d 298 (1925)

BOHNING et al. v. CALDWELL.^*

No. 4501.

Circuit Court of Appeals, Fifth Circuit.

December 8, 1925.

Rehearing Denied January 19, 1926.

J. M. Wagstaff, of Abilene, Tex. (Conner & McRae, of Eastland, Tex., and Wagstaff, Harwell & Wagstaff, of Abilene, Tex., on the brief), for plaintiffs in error.

Virgil T. Seaberry, of Eastland, Tex. (Turner, Seaberry & Springer, of Eastland, Tex., on the brief), for defendant in error.

Before WALKER, BRYAN, and FOSTER, Circuit Judges.

FOSTER, Circuit Judge.

In this case it appears that in 1919 plaintiffs in error, with two others, to wit, Dreinhofer, Deffebach, Bohning, Melvin, and Garrett, composed the entire directorate of the First National Bank of Ranger, Tex. An examination of the bank disclosed that certain assets were considered worthless and the capital was greatly impaired. There were also shortages disclosed by the books, and a difference in accounts between the said bank and the First National Bank of Fort Worth, Tex. The five directors named above executed a note for $22,000, on which they were jointly and severally liable, and it was discounted with the First National Bank of Fort Worth, Tex., and the proceeds placed to the credit of the Ranger Bank. It was contemplated at this time that, as certain items then charged off, or perhaps other items belonging to the bank, were collected, the proceeds would be applied to the liquidation of the note, and none of the makers of the note considered they would ever be called upon to pay it. From time to time the note was reduced as contemplated.

In July, 1920, at which time another examination of the bank was impending, Hedrick, who was an officer of the bank at that time, but who had not been an officer or connected with the bank at the time the original note was signed, requested the plaintiffs in error to sign a new note for $9,975. Melvin, Dreinhofer, and Deffebach apparently signed it without objection. Bohning declined to sign, unless Garrett should also sign. Hedrick promised that Garrett's signature should be obtained, and stated that Garrett had promised to sign the joint note. On this condition Bohning signed it. He was not at that time an officer of the bank, but was a stockholder. The other three who signed the note were still officers. In February, 1921, the bank failed, and the note last mentioned, which forms the basis of this suit, was found among the assets. The bank was hopelessly insolvent. The stockholders were assessed at 100 per cent. on their stock, and depositors will not receive more than 30 per cent. dividend.

In due course the defendant in error was appointed receiver of the bank and brought suit on the note. Melvin made no defense. Judgment eventually went against him by default, and he is not a party to this writ of error. The other three set up as a defense that the note was purely an accommodation note, for the benefit of the bank, and was without consideration; that none of the makers had consented to the release of Garrett from the note; that Garrett was solvent, and that they were released because the promise on the part of the bank to have Garrett sign was not carried out.

At the close of the evidence, both sides moved for a directed verdict, and ...