Callendar Sav. Bank v. Loos

• Decision Date: 18 March 1909
• Citation: 120 N.W. 317,142 Iowa 1
• Parties: CALLENDAR SAVINGS BANK v. LOOS.
• Court: Iowa Supreme Court

142 Iowa 1

120 N.W. 317

CALLENDAR SAVINGS BANK

v.LOOS.

Supreme Court of Iowa.

March 18, 1909.

Appeal from District Court, Polk County; W. H. McHenry, Judge.

Action at law upon a promissory note for the sum of $1,000, made and executed by defendant to one Frank O. Peterson and by him indorsed in blank. Plaintiff claims to be the owner, and asks judgment for the face thereof, with interest. Defendant denied the allegations of the petition, and pleaded that the note was obtained from him by Peterson through force, fraud, and extortion, and is and was without consideration. The case was tried to a jury, resulting in a directed verdict for plaintiff, and defendant appeals. Reversed.B. F. Loos, pro se.

DEEMER, J.

After the jury was impaneled, plaintiff introduced its note in evidence and rested. Thereupon defendant was placed upon the stand and gave the following testimony bearing upon the issue of duress: “I was acquainted with F. O. Peterson. At that time he resided in Oak Park, in this city. I had known him 8 or 10 years before that. I had some business transactions with him before May 22, 1903. We were organizing this German Mutual Insurance Company. Mr. Peterson used to live neighbor to me. Mr. Peterson met me on the street and told me he had just sold some coal land and had several thousand dollars in the bank. I told him we were organizing this German Mutual Insurance Company, and I asked him whether he wanted to invest in it, and he came up to the office, and I told him about the company and how I got it. He wanted to think it over. We figured a week or two. He studied it all over, and he came down and agreed to give me $1,000 and I gave him an agreement that when the company was organized, and we had issued guarantee fund stock, I would give him a $1,000 certificate of this stock in the company, and I signed that agreement as president of the German Mutual Insurance Company. I had been elected in Council Bluffs. He gave me the $1,000, and I gave the company's agreement when it was organized we would give him $1,000 in guarantee fund stock for the money. I did not borrow this money personally. It was to promote this company. The German Mutual Insurance Company was formerly at Council Bluffs. Before I went down and bought it, I talked with the Auditor of State, and he told me to go down and buy it. I got permission to buy it, and I carried it along as near legally as I could. I was president of it. It was not fully organized. We were organizing. We had to get $5,000 in cash and $20,000 in notes before we could get a charter, and that is what we were working for. The $1,000 was not borrowed. It was given to me to promote the company, with the promise of the company to give stock back. I signed that instrument. I do not know where it is. Mr. Peterson got it. I delivered it to him at the time I received the money. The instrument will show for itself. I do not remember the date. I could look up the date. It was several months before May 22, 1903. It run along, and we were about ready to incorporate, and Mr. Patton that lives up neighbor to Mr. Peterson, his attorney here, he got in with Mr. Peterson, and the first I knew one day here comes Mr. Peterson with the constable, Charlie Kingman, and Mr. Patton. Well I knew what a new insurance company is just about the time you are about to get a charter, if you start any legal proceedings. Mr. Patton called me to one side, and Patton told me I had to give security for that money. I did not give security to start with. I just gave the agreement when the company was organized I would give him stock, and Patton brought the constable and had papers read and served on me. He threatened to tie everything up, and he was going to start criminal proceedings, and that he would have me arrested, and unless I did secure it there would be criminal prosecution. I do not know what kind of papers he had. The constable had the papers and showed them to me. I think Mr. Kingman may have them yet. He said I was to either give this security or he would serve the papers on me. It was on account of these acts of Peterson and Patton and the constable that I executed this note in question. It was fixed up that day right there. Mr. Patton kept the constable right there and himself, and we fixed it up. I gave him a second mortgage on a piece of property out in Clifton Heights as security.” As to the plaintiff's knowledge regarding the methods whereby the note was obtained, defendant testified as follows: “I know Mr. Fitz, the president of the Callendar Savings Bank. The note was dated May 22, 1903, and he came in possession of the note that day--the same day. The note was given into the possession of Mr. Fitz, the president of the bank, the same day it was made. I was there when it was turned over to Mr. Fitz. I had a conversation with Mr. Fitz. He knew all about the deal. I told him. Mr. Fitz knew how this instrument had been obtained in reference to the consideration and manner. I told him all about the circumstances. That was before he came into possession of it or got title to it. Mr. Fitz was president of the Callendar Savings Bank.”

At the conclusion of the evidence the trial court asked defendant's counsel as to whether the testimony amounted to duress, and in response thereto the attorney answered “that he thought it did.” Asked for authorities upon the subject, he said “he had some at his office, and that there were some fine points in the matter.” In response to this the court said, in part: “I think they were fine. They are clear out of sight. * * * I must confess that to my mind the duress is not in view. No, sir; right on the face of the transaction there is no duress. ...