Coe v. First Nat. Bank & Trust Co.

• Decision Date: 10 April 1976
• Docket Number: No. 47889,47889
• Citation: 219 Kan. 352,548 P.2d 486
• Parties: Alice M. COE, Administratrix of the Estate of Max E. Coe, Appellant, v. FIRST NATIONAL BANK AND TRUST COMPANY, Appellee.
• Court: Kansas Supreme Court

Page 486

548 P.2d 486

219 Kan. 352

Alice M. COE, Administratrix of the Estate of Max E. Coe, Appellant, v. FIRST NATIONAL BANK AND TRUST COMPANY, Appellee.

No. 47889.

Supreme Court of Kansas.

April 10, 1976.

Syllabus by the Court

1. A loan is made when the borrower receives money over which he exercises dominion and which he expressly or impliedly promises to repay.

2. One of the elements of a loan is delivery of the money so that the borrower may exercise dominion and ownership over it.

3. Delivery of an instrument may be conditional, to become a binding obligation only on the happening of a certain future event. Nonperformance of the condition precedent may render the instrument void and unenforceable.

4. In an action to enforce a loan agreement, the record is examined and it is held the undisputed evidence was ample to support the summary judgment.

Robin L. Wick, Great Bend, argued the cause and Raymond L. Dahlberg, of Turner & Hensley, Chartered, Great Bend, was with him on the brief for appellant.

Donald L. Burnett, of Smith & Burnett, Larned, argued the cause and was on the brief for appellee.

FATZER, Chief Justice:

This is an appeal from a summary judgment in favor of the defendant. We affirm.

The undisputed facts may be briefly summarized. Max Coe, and Alice M. Coe, his wife, intended to remodel their home and, on several occasions, talked with Mr. Grove of the First National Bank & Trust Company in Larned, Kansas, about borrowing $4,000 to finance the remodeling. A promissory note, security agreement and mortgage dated May 6, 1972, were prepared by the bank. On May 12, 1972, Max Coe and his wife went to the bank, examined these documents and signed them in the presence of Lola Mae Gilkison, a bank employee. Max Coe signed the portion of the promissory note indicating that he desired credit life insurance. Mrs. Gilkison then started to prepare a deposit slip to deposit the loan proceeds of $4,000 into the Coes' joint bank account. Before she could complete the deposit slip, Max Coe stated, 'don't advance any proceeds,' and instructed her not to do anything until he came back to discuss the matter further with Mr. Grove, a week from the following Saturday. Mrs. Gilkison followed Max Coe's instructions and did nothing further. The loan proceeds were not advanced and a certificate of credit life insurance was not prepared and forwarded to the insurance company. Later that same day, Max Coe was injured in an automobile accident and subsequently died from such injuries.

Shortly after Max Coe's death, the plaintiff-appellant requested her son to instruct the bank to cancel the loan. This was done. Later, the appellant also confirmed with the bank that she wanted the loan cancelled. Acting pursuant to the instructions of the appellant's son and the appellant herself, the defendant destroyed the promissory note, security agreement and mortgage by tearing them in two.

On February 20, 1973, Alice M. Coe, Administratrix of the estate of Max Coe, filed suit to recover the sum of $4,000 on the theory that she was the lawful beneficiary of the credit life insurance which she assumed was issued to cover the alleged loan. Her petition alleged that plaintiff and her deceased husband had a binding loan agreement with the bank which included a request for the issuance of credit life insurance, that the loan agreement was fully executed and had never been lawfully cancelled, and that plaintiff, as the lawful beneficiary of the credit life insurance the bank was obligated to procure pursuant to the loan agreement, was entitled to the benefits.

In its answer, the defendant bank denied there was a completed loan agreement and that plaintiff was the lawful beneficiary of the requested credit life insurance policy. Defendant stated that credit life insurance is in effect only on proceeds advanced under a loan agreement, and such insurance is not issued until loan proceeds are disbursed to the borrower. Defendant further stated that Max Coe had instructed the defendant not to process the loan or advance the proceeds until further instructions. Since he died without giving further instructions, the loan agreement was never completed. Finally, the defendant stated that if the loan is found to have been completed, then the defendant bank is the beneficiary entitled to all credit life insurance proceeds.

The plaintiff then filed her motion for summary judgment. The district court found that the motion was properly before it and that there was no dispute as to any material fact; it then proceeded to render summary judgment for the defendant. The court stated its conclusions in the journal entry:

'The issue in this case, simply stated, is whether there was, in fact, a completed contract between plaintiff and the deceased husband and the Defendant bank at any stage of the transaction. The Court finds that there was never a completed contract at any state of the above transaction.

'When the Plaintiff's deceased husband advised the Defendant bank not to advance proceeds until he further discussed the matter with an officer of the Defendant bank, this action stayed the completion of the contract until a later time. On the date of signing the note and mortgage, the Defendant bank was ready to perform, but the deceased, Mr. Coe, asked the Defendant to refrain from completing the contract because he wanted to discuss the matter further. As a result, there was no meeting of the minds between the Parties.

'The issue of credit life insurance, if any, is in no way involved in the ultimate determination of this litigation. The existence of a contract, the meeting of the...