Chicago Title & Trust Co. v. Brady

• Decision Date: 19 November 1901
• Citation: 65 S.W. 303,165 Mo. 197
• Parties: CHICAGO TITLE & TRUST CO. v. BRADY.
• Court: Missouri Supreme Court

65 S.W. 303

165 Mo. 197

CHICAGO TITLE & TRUST CO. v. BRADY.

Supreme Court of Missouri, Division No. 1.

November 19, 1901.

NOTES — ACCOMMODATION — CONSIDERATION — RECEIVERS — SUIT ON NOTES — DEFENSE — INSTRUCTIONS.

1. Where, in an action on notes, the defense was that they were given merely for accommodation, it was not error for the court to instruct that they should find for plaintiff unless they should find that the notes were given "for accommodation," instead of instructing that they should so find unless they found the notes were given "without consideration," as requested by plaintiff; the instruction given having the same meaning as that requested.

2. Where, in an action by a receiver of a bank to recover on notes payable to the bank, the defense was that the president of the bank, being desirous to increase the paper assets of the bank, executed to defendant a deed of certain land held by him for the bank, simultaneously therewith taking a trust deed to the land and the notes in question, and plaintiff requested the court to instruct that the right to possession of the land which defendant acquired was a valuable consideration for the notes mentioned in the deed, it was proper for the court, instead of giving such instruction, to modify it by the statement that it was a consideration if so intended by the defendant and the officers of the bank with whom he had the transaction.

3. In an action by the receiver of a bank on notes payable to it, the defense was that they were given for the accommodation of the

bank, and that several of them, amounting to $7,000, were given simultaneously with the execution of a deed to defendant of certain land held by the president for the bank and the taking back of a deed of trust by him. Defendant testified as to the latter notes that the cashier of the bank suggested to him that they had a land transaction they wanted defendant to make in order to help the bank out, and that the president subsequently told him that the bank could use live paper much better than it could the land, and that the bank examiner wanted the bank to cut down its real estate holdings; and as to the remaining note he testified that it was given the bank at the request of the president, who told defendant at such time that there had been a running down of accounts that might injure him some, and that it would be a help to the bank if defendant would give such note. Held, that there was nothing in such testimony tending to show that the notes were not accommodation paper.

4. The fact that notes given to a bank without consideration are given for the purpose of increasing the apparent assets of the bank does not deprive the maker of the defense of want of consideration as between himself and the bank.

5. Where notes are given a bank as an accommodation for the purpose of swelling its apparent assets, the defense of no consideration is good as against the receiver of the bank.

Appeal from St. Louis circuit court; D. D. Fisher, Judge.

Action by the Chicago Title & Trust Company against James H. Brady. From a judgment in favor of defendant, plaintiff appeals. Affirmed.

McKeighan & Watts and Shepard Barclay, for appellant. Humphrey & Humphrey, for respondent.

BRACE, P. J.

The plaintiff is the receiver of the Globe Savings Bank of Chicago, and as such sues to recover upon six promissory notes, — one for $5,000, one for $4,200, and four for $700 each, — executed by the defendant, and delivered to said bank, and which were found by the receiver among the assets of the bank. The answer of the defendant admits the execution and delivery of the notes to the bank, and sets up as a defense thereto that they were so executed and delivered without any consideration, for its accommodation. The defendant introduced evidence tending to prove the defense set up in the answer, and the case was submitted to the jury upon the following instructions:

For the plaintiff: "(1) The court instructs the jury that the plaintiff has sued upon six different notes, each of which constitutes a separate and distinct claim or cause of action in plaintiff's petition. Those claims are called `counts' in the instructions to you by the court. Your verdict should state your finding or decision as to each count or cause of action separately; and, if your finding is for the plaintiff as to any one or more counts, you should also state in your verdict the exact amount which you find from the evidence to be still due and unpaid at the present time (including principal and interest to date) on each particular note mentioned in the count or counts of the petition on which you may so decide to find for plaintiff. (2) The court instructs the jury that the credibility of the witnesses who have appeared before the court at this trial is a matter for the jury to determine. Unless a statement of fact by a witness impresses you as true, or worthy of your belief, you are not bound to accept such statement as proof of the fact so stated. You are authorized by law to reject any statement of any witness or witnesses that you may believe, under all the evidence, to be false or untrue, whether intentionally false or not. (3) The court instructs the jury that the burden of proof is upon defendant in this case, and, unless the jury believe from the evidence that defendant has established by a preponderance of the testimony his allegation in the answer that said notes (or some of them) were given by him for the accommodation of said bank (as explained in other instructions), then your verdict should be for the plaintiff as to all of the notes sued upon in this case. (4) The court instructs the jury that under the pleadings and evidence the defendant has admitted the execution of all the notes sued upon by plaintiff in this case, and has admitted that plaintiff is the legal owner and holder of said notes. It is therefore the duty of the jury to find for the plaintiff as to each and all of said notes, unless the jury believe from the evidence that some one or more of said notes was obtained by the bank as a matter of accommodation, as explained in other instructions. (5) Referring to the first count (or claim on the $5,000 note), the jury are instructed by the court that if they find and believe from all the evidence that said note was signed and delivered by Mr. Brady to the bank (or to Mr. Spalding, as its president) in order to raise funds for the benefit of the American Land Company, and that said company accordingly obtained a credit with the bank for $5,000 by reason of the said giving of said note by Mr. Brady, then said note was in law based on a valuable consideration; and, if the jury find the facts to be as above stated, they should find for the plaintiff as to the $5,000 note and interest to date at the rate mentioned in said note. (6) Referring to the group of notes for $7,000 (mentioned in the second, third, fourth, fifth, and sixth counts), the court instructs the jury that the legal effect of the deed of trust (which has been read in evidence) and the said notes recited in said deed is to indicate a transaction in which Mr. Brady issued the said notes as part payment of the purchase price of certain land in North Dakota. The jury is further instructed that by his answer in this case defendant admits that the title to the land (described in the deed of trust) was conveyed to defendant before said deed of trust was executed by defendant. The court instructs you that the right to possession of said land which defendant acquired by the admitted conveyance of title to him by Spalding was, if so intended by him and the officers of the bank with whom he had the transaction, a valuable consideration for the notes mentioned in the deed of trust and sued upon in this case."

For the defendant: "(1) If you find from the evidence in this case that the defendant, James H. Brady, signed and delivered all the notes in evidence in this case as an accommodation to the Globe Savings Bank, then your verdict should be for the defendant, James H. Brady, on all the counts in the petition. (2) If you find from the evidence that James H. Brady did, at the request of the officers in charge of the management of the Globe Savings Bank, sign and deliver any of the notes in question in this case for an accommodation to the said bank, then as to such notes so signed by Mr. Brady the plaintiff cannot recover. (3) As between the maker and the payee of a promissory note, oral evidence touching the consideration thereof may be considered by you; and if you find from the evidence in this case that the defendant, Brady, received no consideration for the signing of the notes sued on, and that the same were made for the accommodation of the Globe Savings Bank, then your verdict should be for the defendant. (4) The jury are instructed, as between the party accommodated and the party accommodating, the latter can be under no liability to the former, whatever the relation in which they are placed upon the paper; and in this case, if you find from the evidence that James H. Brady was in fact an accommodation maker of the paper sued on, then he cannot be held liable, no matter in what form the transaction was put. (5) This action is brought by the receiver, and he occupies the same position that the Globe Savings Bank would had it brought the action in its own name before it was placed in the hands of a receiver. The receiver has no greater rights in this case than the Globe Savings Bank possessed. It does not occupy the position of purchaser for value. (6) If you find from the evidence that James H. Brady signed the notes sued upon in this case as an accommodation maker for the Globe Savings Bank, and delivered the notes to the bank, or to one of its officers for the bank, he cannot be...