Farmers' Bank v. Harris

• Decision Date: 02 April 1923
• Docket Number: No. 14665.,14665.
• Citation: 250 S.W. 946
• Parties: FARMERS' BANK OF WESTBORO v. HARRIS.
• Court: Missouri Court of Appeals

250 S.W. 946

FARMERS' BANK OF WESTBORO v. HARRIS.

No. 14665.

Kansas City Court of Appeals. Missouri.

April 2, 1923.

Rehearing Denied April 30, 1923.

Appeal from Circuit Court, Andrew County; Hon. A. M. Tibbels, Judge.

"Not to be officially published."

Action by the Farmers' Bank of Westboro against P. J. Harris. Judgment for defendant, and plaintiff appeals. Affirmed.

John A. Gerlash, of Tarkio, and Hunt, Bailey & Hunt, of Rockport, for appellant.

L. D. Ramsay, of Rockport, and Cook & Cummins, of Maryville, for respondent.

BLAND, J.

This is a suit on a promissory note in the sum of $5,000. Defendant admitted that he signed the note, but defended on the ground that it was given for the accommodation of plaintiff bank and was therefore without consideration.

Defendant was a farmer living on a farm a short distance from Westboro, where the bank was located. On July 12, 1920, defendant was working on the farm of a neighbor when J. W. Peck, president of the plaintiff, in company with one C. O. Hopkins, came to where defendant was and told the latter that the bank was in trouble; that it had lent Hopkins more money than the law allowed it to lend to any one person; that the bank examiner was expected soon and it would be a great favor to the bank if he would sign a note to the bank in the sum of $5,000 which Peck had in his possession; that he would give defendant a note in the same amount signed by Lauman and Hopkins in favor of defendant so that defendant would have something to show the nature of the transaction; that the note defendant was to sign would be placed in the bank, and after the examiner had come and gone defendant could bring the Lauman-Hopkins note in and indorse it to the bank, and the bank would return defendant's note to him. Defendant testified that the note was to be given the bank to "cover up" some of Hopkins' paper. The evidence shows that the largest amount that could be lent by the bank to any one person was $5,000, and the inference from this testimony is that the bank had lent Hopkins more than the limit and desired to get the defendant to give the bank his note to take the place of the overloan to Hopkins, so that the bank would pass muster with the bank examiner, although Peck denied that Hopkins was overlent.

Defendant signed the note as requested, but told Peck that he did not want to hold the Hopkins-Lauman note; that he would indorse and give it to Peck, and when defendant's note became due he would get his note, and the Hopkins-Lauman note would be "there." Defendant's note was renewed from time to time by Peck's going to defendant's house and stating that the bank examiner had not yet been around, and that he did not want any overdue notes in the bank when the bank examiner came. At one of the renewals, in the month of December, defendant hesitated about renewing the note, saying, "It don't look right;" "I would rather be off of it." No interest was ever paid upon the original note by the defendant, nor upon any of the renewals, nor was any government stamp tax paid by the defendant.

Peck took defendant's note and placed it among the assets of the bank, giving credit to Hopkins for its proceeds. In the month of April the bank closed on account of difficulties. Peck sold out his stock, and the"bank reopened with one McGinnis as president. McGinnis called defendant to the bank and wanted him to pay the note or give a mortgage on his farm for Its amount. Defendant stated that he would do neither. He explained the transaction that he had had with Peck, but McGinnis stated he knew nothing about it, and that If the note was not paid he would sue the defendant. Later McGinnis delivered the Hopkins-Lauman note to defendant. Before the conversation I the bank McGinnis saw defendant on the street in Westboro, and asked him what he wanted to do about his note. McGinnis testified that at that time defendant made no objection to paying the note. Defendant testified that at "the first few times" they talked about the note "McGinnis made it so plain to me that I would have to pay it I never did tell him that I didn't owe it. He made it so plain I would have to pay it I didn't say nothing about this other note" — meaning the Hopkins-Lauman note.

Plaintiff's version of the transaction was that Hopkins and Lauman owed the sum of 15,000 to a Chicago bank and, desiring to raise the money through plaintiff's bank to pay off this loan, Hopkins borrowed the sum of approximately $5,000 from the bank, which was the limit it could lend any one; that he raised another $6,000 from the bank through the note of his daughter-in-law; and that he obtained the note in controversy from defendant for the purpose of getting the balance of the money, and that defendant signed his note for the accommodation of Hopkins, and not the bank. Plaintiff's evidence tended to show that the president of the bank went along with Hopkins at the time defendant signed the note merely for an outing for his health, and that Hopkins negotiated the transaction; that Peck was merely an onlooker. Defendant denied that Hopkins, although present, participated in the transaction at all, but testified that the transaction was negotiated by Peck alone. The contentions of both parties were submitted to the jury by instructions resulting in a verdict for the defendant, and plaintiff has appealed.

Plaintiff makes the point that there was no evidence to support the verdict. However, plaintiff, having joined with the defendant in submitting the issues to the jury upon the question as to whether defendant executed the note sued upon, which was a renewal note of the one originally executed by the defendant, for the purpose of accommodating plaintiff' or Hopkins, is not now in a position to urge this point. Thomas v. Boatright (Mo. App.) 245 S. W. 211. Aside from this we think that there is substantial evidence to go to the jury upon this question. Plaintiff makes much of isolated testimony of defendant on his cross-examination. This evidence is as follows:

"Q. Who was to receive the proceeds of that note? Wasn't it the understanding that Hopkins was to receive the proceeds of the note? A. It was to be given into the bank to cover up some of his paper; yes. Q. And Hopkins was to get the proceeds of it, wasn't he? A. I don't know whether he was to get the proceeds of it, or not. It was to cover up — Q. (interrupting). It was to cover up his paper? A. Yes, sir. Q. And help him? A. Yes sir."

It is insisted that defendant is bound by this testimony, and that it shows that the note was given for the accommodation of Hopkins. Defendant's evidence in chief and his other evidence on cross-examination is so strong and explicit that he was not signing the note for the accommodation of Hopkins that the quoted testimony of the defendant was evidently not meant in the way that plaintiff insists it should be construed. All inferences from the evidence must be taken in their most favorable light to the defendant. The record discloses that defendant was not an overly intelligent person, and, of course, was not familiar with the workings of a bank. His testimony, quoted, is susceptible to the construction that the bank was taking measures to assist Hopkins, a large customer, as well as itself. If the bank could not "cover up" Hopkins' loans, then the latter would have been required to reduce them. But defendant's evidence shows that whatever he did was to accommodate the bank, and that he was not interested in Hopkins. We think that his testimony taken as a whole was for the consideration of the jury upon the issues presented. Lamb v. Mo. Pac. Ry. Co., 147 Mo 171, 187, 48 S. W. 659, 51 S. W. 81; Bond v. C., B. & Q. Ry. Co., 110 Mo. App. 131, 84 S. W. 124; Bobbitt v. United Rys. Co., 169 Ea. App. 424, 153 S. W. 70.

It is insisted that defendant was liable to plaintiff on the note he signed, because he retained the Hopkins-Lauman note; that had he indorsed and delivered that note to the plaintiff, then plaintiff could have held Hopkins and Lauman as makers. Under the agreement made between Peck and the defendant, it was the duty of plaintiff to return defendant's note to him before it could require him to return to defendant the Hopkins-Lauman note. Peck testified that he placed the Hopkins-Lauman note in his private box to be held for the defendant, and that he, turned it over to McGinnis with instruction to deliver it to the defendant. McGinnis gave it to the defendant saying, "Peck sent it to me to give to you." Defendant testified, "I took it * * * I told him (McGinnis), * * * `If you don't want it, I will take it, and keep it.'"

It is insisted that there is no evidence that Peck as president had power to make the agreement with the defendant that is claimed by the latter; "in other words, the court cannot assume that Peck, as president, took the original note as accommodation paper." A like contention was disposed of unfavorably to it in the case of Bank v. Keith, 85 Mo. App. 409.

It makes no difference...