Cahill v. Byng

• Decision Date: 25 August 1930
• Docket Number: No. 4736.,4736.
• Parties: CAHILL v. BYNG.
• Court: Missouri Court of Appeals

30 S.W.2d 768

CAHILL v. BYNG.

No. 4736.

Springfield Court of Appeals. Missouri.

August 25, 1930.

Appeal from Circuit Court, Greene County; Warren L. White, Judge.

"Not to be officially reported."

Action by J. E. Cahill, receiver of the New First National Bank, against John W. Byng. From an order sustaining plaintiff's motion for a new trial, defendant appeals.

Affirmed.

Neale, Newman & Turner, of Springfield, for appellant.

Orin Patterson, of Springfield, for respondent.

BAILEY, J.

This is an appeal from an order sustaining plaintiff's motion for new trial. The suit is on a note by the receiver of the New First National Bank at Springfield, Mo. The petition recites that the New First National Bank of Springfield, hereinafter called the bank, was organized as a United States bank prior to March 17, 1928, when it failed and was placed in liquidation, with J. E. Cahill as receiver. The petition is otherwise a conventional suit on a promissory note dated April 8, 1927, executed by defendant, payable on demand to the New First National Bank in the sum of $1,800, with interest from date at the rate of 6 per cent. The answer, among other things, set up:

That J. C. Peightel was president of the bank and its managing officer, and that defendant was a customer of same; that, "prior to the time of the execution of the said note, the said Peightel requested the defendant to purchase fifteen shares of the capital stock of said bank at the price of $1,800.00; that defendant refused to purchase the said shares of stock; that the said Peightel thereupon stated to defendant that the fifteen shares of stock were held by three different parties, who lived at Kansas City; that the said bank desired to take up said stock; that the said Peightel requested the defendant, for the accommodation of the bank, to execute a note for $1,800.00 which would be placed in the bank's files until the said shares of stock could be transferred from Kansas City, when the said Peightel and his associates in said bank would take the same up and that as soon as the certificates of stock were received by the bank, defendant's note would be taken from the files and returned to him, or destroyed. That defendant's note would stay in the files of the bank only a few days, and that the defendant would not be held liable upon or expected to pay the said note.

"That in order to accommodate the said bank, and believing and relying upon the said statements and representations of said Peightel, as president of said bank, defendant did execute the note sued on in this action and delivered it under the aforesaid arrangement to the said Peightel; that later defendant mentioned the note to the said Peightel and was assured that everything had been carried out according to agreement."

It was further alleged that because of these facts the said note was made for the accommodation of the bank and was wholly without consideration. As a further defense, it was alleged that the note was invalid as between the parties because there was never any legal or lawful delivery of the note, but only a conditional delivery to the bank.

The cause was tried July 3, 1929, and reached this court on appeal at the March term, 1930. The case was tried before the court without a jury. The honorable judge, without request, made a finding of facts which, in part, is as follows:

"The New First National Bank, herein called the bank, was organized in 1925 and failed in March, 1928. During the period of its existence, or at least during the period of the events involved in this case, J. C. Peightel was president and chief managing officer of the bank.

"Sometime in 1926, Peightel sold to Hargis, McBroom and Basham, three gentlemen of Huntsville, Arkansas, 15 shares of the capital stock of the bank for $1800.00, under an agreement to re-buy the stock whenever they wanted to let it go. Hargis, McBroom and Basham paid for the stock by their notes which the bank took and held until April, 1927, at which time their notes aggregated $1756.35.

"Early in April, 1927, Hargis, McBroom and Basham asked Peightel to take the stock off their hands according to his agreement. To comply with this request and to make good his promise, Peightel asked defendant, Byng to buy the stock for $1,800.00. Byng declined to do so. Peightel then told Byng that he desired to transfer the stock from the present holders and asked Byng to sign a note for $1,800.00 to enable him, Peightel, to effect the transfer and told Byng that it would only take a few days to complete it (from Saturday to Wednesday) and that then Byng's note would be destroyed or returned to him.

"Byng thereupon, on April 8, 1927, signed the note in suit which is for $1,800.00, due on demand, bearing interest at six per cent. payable quarterly, and delivered it to Peightel. Byng received nothing of value for the note and never expected to. Peightel placed the note in the bank and took out and returned to Hargis, McBroom and Basham their notes aggregating $1,756.35, and also sent them a cashier's check for $43.65, making a total of $1,800.00 returned to Hargis, McBroom and Basham, who endorsed on their certificates of stock an assignment in blank and returned the certificates to Peightel. Peightel laid the certificates away in his private box with a memorandum stating that they belonged to Byng. The stock was never transferred on the books of the bank to anyone.

"Sometime afterward Byng asked Peightel about the note and Peightel answered `Forget it, that is all over,' which Byng understood to mean that the transfer of the stock had been completed and the note destroyed. The matter was never mentioned between them again until after the bank failed. Though the note provided for quarterly payments of interest, neither Peightel or anyone else acting for the bank ever collected or demanded any interest and Byng never paid any.

"About December 31, 1927, the bank desired to borrow some money from a St. Louis bank and to use Byng's note as collateral, and in order to make it appear that the note was not in arrears as to interest Peightel endorsed on its back, `Int. paid to Dec. 31, 1927.' This endorsement was made without any interest having been collected,...