Deibel v. Jefferson Bank, a Corp.
| Citation | 207 S.W. 869,200 Mo.App. 541 |
| Parties | FREDERICK DEIBEL, Appellant, v. JEFFERSON BANK, a Corporation, Respondent |
| Decision Date | 07 January 1919 |
| Court | Court of Appeal of Missouri (US) |
Appeal from the Circuit Court of the City of St. Louis.--Hon Kent K Koerner, Judge.
AFFIRMED.
Judgment affirmed.
Smith & Pearcy for appellant.
(1) The money advanced by the plaintiff was a loan to the defendant and was to be repaid as soon as the bank was in a condition to do so. The evidence showed that the bank later was able to pay after the crisis had passed which required the loan of the money. (2) The Jefferson Bank received from the plaintiff $ 2500 which in equity and good conscience the defendant should pay over to plaintiff. The action of the money had and received is favored by the courts and is so flexible in form and relief that it levies tribute indifferently on equitable as well as strictly legal principles. Bank v. Bank, 244 Mo. 554, 581. (3) Clearly, under the facts disclosed, the plaintiff made out a case to go to the jury. Where a party receives money under circumstances showing that the money was not a voluntary donation or gift, the law implies a promise to repay. Such promise need not be expressed, but will be inferred under the law, from the facts surrounding the case. (4) Directors of a bank are trustees. 3 Cook on Corporations (7 Ed.), p. 2010, sec. 648. They are bound to use their best judgment and discretion as such trustees to take all necessary actions that may be required to prevent loss or damage to the corporation, its stockholders and creditors. There is no duty on a trustee to advance money for his cestui que trust. If, however, he does so far the purpose of preserving the estate or interests of his cestui que trust under the law he is entitled to recover such advance from the cestui que trust, where the money so advanced was not a gift or voluntary donation. 2 Perry on Trusts (6 Ed.), p. 791 sec. 485; Snyder's Appeal, 72 Mo. 253; Beck v. Kinealy, 89 Mo.App. 418; Hardson v. Belilios (1901), A. C. 118; German Min. Co. ex parte Chippendale (1853), 4 D. M. & G. 19. (5) The doctrine of duress at common law has been greatly enlarged. American Brewing Company v. City of St. Louis, 187 Mo. 367. The courts have extended the doctrine of the early common law with regard to compulsory payments and the modern rule is not to attempt to lay down any definite and exact rule of universal application to determine whether a payment is voluntary or involuntary. American Brewing Co. v. City of St. Louis, 187 Mo. 367. If one is compelled by business necessity to surrender to the constraint involved in an unlawful demand and make a payment of money, moral duress appears. In other words, in such circumstances, it may be found as a fact that the party paying has not had the freedom of exercising his will, and paid the money under moral duress in which event it is against equity and good conscience for the money to be withheld from the plaintiff. Brown v. Worthington, 162 Mo.App. 508; Niedermeyer v. Curators of State University, 61 Mo.App. 654; Font v. Giraldin, 64 Mo.App. 165; Wells v. Adams, 88 Mo.App. 215; American Brewing Co. v. St. Louis, 187 Mo. 367, 377; Westlake v. City of St. Louis, 77 Mo. 47, 30 Cyc, pp. 1303-1305. (6) In the scheme required by the Clearing House in carrying out the transaction imposed upon the plaintiff and his co-directors they had nothing whatever to do with the selection of the collateral that was to be replaced by the money. The evidence shows that the Clearing House, through its representative, Mr. French, drew up the papers necessary to complete the transaction, wrote the minutes that were to be adopted by the corporation and selected the debts that were to be charged off as purchased by the money advanced. It also showed that they required this property to be taken out of the bank as assets. Under these facts, there clearly was duress. (7) There is no estoppel in this case. The bank and not the stockholders is the defendant. Plaintiff has done nothing to injure the bank or its assets (if considered as a trust fund). In fact, everything that was done by the plaintiff was for the benefit of the bank and the preservation of its assets (if considered as a trust fund) and not to its detriment or damage in any way. An estoppel must be mutual before it can be asserted and there is no mutuality that will support an estoppel in this case. (8) The alleged injury which defendant insists will be sustained by purchasers of stock subsequent to the transaction of April, 1909, is not an injury to the defendant and is not one that can be complained of in this action by the defendant. If there is such an injury, the stockholder alone can complain as to a loss that has been sustained by him individually and not by the defendant and not to the defendant's assets (if considered as a trust fund). (9) The Record shows that the capital of the Bank was $ 200,000, represented by 2000 shares of stock. The Record fails to show the identity of any subsequent purchasers of stock. If the defendant's position was correct as to subsequent purchasers this would not apply to holders of stock who knew of the transaction or those who have owned the stock since April, 1909. For all that the Record shows there are no new stockholders since that time.
A. & H. N. Arnstein for respondent.
(1) Where directors of a bank, whose capital is impaired, pay funds into its treasury to restore its capital and save it from liquidation, such transaction is a donation or gift to the bank, and creates no obligation for its return. Wright v. Gurley, 133 La. 746; Interstate Trust Banking Co. v. Irwin (La.), 70 So. 313-317; Bidwell v. P. & O. R. R. Co., 114 Pa. St. 535; Broderick v Brown, 69 F. 497; Best v. Thiel, 79 N.Y. 15; Leavitt v. Oxford Geneva S. M. Co., 1 P. 356; Hurd Rec. v. Kelly, 78 N.Y. 588. (2) The interest which bank directors have as stockholders to save the bank from failure, the saving of their own stock therein from being wiped out, and their natural obligation to make good an impairment of its capital, is a sufficient consideration for such payment, if a consideration is necessary. Hope Mutual Life Ins. Co. v. Perkins, 38 N.Y. 404; Union Bank v. Sullivan, 214 N.Y. 332; Interstate Trust Banking Co. v. Irwin, 70 So. 317; Hurd v. Kelly, 78 N.Y. 596; First National Bank v. Henry 202 S.W. 280, l. c. 282 (K. C. Ct. App.). (3) The agreement of the Clearing House to continue to clear the bank's paper, upon condition that the directors contribute $ 20,000 to the assets of the bank, was a valuable consideration for such payment. Marks v. Bank of Missouri, 8 Mo. 316; Houck v. Frisbe, 66 Mo.App. 16; Brownlee v. Wollard, 66 Mo.App. 642; Forbes v. Railroad, 107 Mo.App. 674; Gesen v. Higham, 161 Mo. 333. (4) The test of defendant's liability to plaintiff under an implied promise to repay must be measured by the condition existing April 28, 1909, when the money was contributed. If, at that time, equity and good conscience demanded that it be repaid, it then constituted a liability, immediately due and payable. (5) Directors of a corporation can only bind it by resolutions adopted by vote in meeting assembled. 3 Cook on Corp. (7 Ed.), pp. 2435-6; Brinkehoff Zinc Co. v. Boyd, 192 Mo. 613; Charleville v. Washington Trust Co., 226 F. 400. The record is barren of all evidence that the bank borrowed the money from plaintiff. Informal conversations of the directors amongst themselves, not crystalized into a vote, cannot bind the corporation. (6) The most favorable theory of plaintiff's case is, that the directors informally discussed amongst themselves the probability of the money being returned to them, and that it would be repaid as soon as the bank "made the money," or "got in a position to do it," but no resolution to that effect was ever adopted; furthermore, the evidence is, that, had the bank at any time between April, 1909, and the date when suit was filed, repaid the money, it would have been in as bad or in a worse condition than when the money was contributed. (7) If the legal effect of the transaction of April 28th was as now contended by plaintiff, it was a farce, operated as a fraud on the Clearing House Association, and the statements submitted to the State Bank Commission sworn to by the plaintiff, and the statements published over his signature in the public press, were false and intended to deceive; on the faith of these published statements he was able to sell his stock to an unsuspecting public, and it does not lie in his mouth to invoke the doctrine of "equity and good conscience." Gate City National Bk. v. Miners & Farmers Bk., 259 Mo. 551, l. c. 574-56; Third National Bk. v. Reichert, 101 Mo.App. 252. (8) A payment made, under pressure, unless the demand for such payment was illegal, unjust or fraudulent, does not constitute duress. 9 Cyc. 450; 14 Cyc. 1123; Miller v. Davis Estate, 122 P. 793; Kansas City Ry. Co. v. Graham, 145 S.W. 632; Buchanan v. Sahlein, 9 Mo.App. 552; Wolff v. Marshal, 52 Mo. 171; Trust Co. v. Bank, 154 Mo.App. 89, l. c. 106; Knusden Fruit Co. v. Chicago Ry. Co., 149 F. 973; Wood v. Telephone Co., 223 Mo. 537, 557-8-9; Link v. Real Estate Co., 182 Mo.App. 531-6; Mee v. Town of Montclair, 86 At. 261; Newburyport Water Co. v. City, 103 F. Rep. 594. (9) Durress must be exerted by him who receives the benefit of the transaction, in order that the same may be avoided on that ground. 9 Cyc. 453; 22 Am. & Eng. Ency. 615; Radlich v. Hutchinson, 95 U.S. 210; Ballard v. Lefferman, 4 Gill. 425; Brumagin v. Tellinghast, 18 Cal. 265; Mays v. Cincinnati, 1 Oh. St. 268; Quincy v. White, 63 N.Y. 370. In the case at bar the Jefferson Bank did nothing; it was the Clearing House that exerted the pressure. (10) As the payment was not made under duress, and was made with...
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