Farmers' State Bank of Riverton v. Gentle

• Decision Date: 02 March 1926
• Docket Number: 1193
• Citation: 243 P. 595,34 Wyo. 363
• Parties: FARMERS' STATE BANK OF RIVERTON v. GENTLE et al. [*]
• Court: Wyoming Supreme Court

243 P. 595

34 Wyo. 363

FARMERS' STATE BANK OF RIVERTON v. GENTLE et al. ^[*]

No. 1193

Supreme Court of Wyoming

March 2, 1926

APPEAL from District Court, Fremont County; CYRUS O. BROWN, Judge.

Action by the Farmers' State Bank of Riverton against Ray A Gentle and others, from a judgment for plaintiff, defendants appeal.

Affirmed.

E. H Fourt, W. C. Mentzer, H. C. Brome and Joel F. Longenecker for appellants.

The note sued upon is a renewal of a note dated May 15, 1919. The note was given for forty shares of stock of Investor's Guaranty Corporation, which stock was assigned to secure its payment to defendant corporation, which corporation endorsed, assigned and delivered the note to plaintiff as collateral security. No consideration ever passed to Gentle. He never received it for the stock certificates, and there is no testimony that he ever received the stock. He assigned the stock, in blank, on request of Luikhart. Investor's Guaranty Corporation owned nearly all of the stock of plaintiff bank. There can be no question of an innocent third party. Officers of the bank were officers of the Guaranty Corporation and the same employees kept the books of each. Both corporations had knowledge that the stock was not delivered to Mr. Gentle. The facts are similar to the case of Smith Merc. Co. v. Conway, et al (Wyo.) 46 P. 1084. The note was given as an accommodation. 8 C. J. 259; Bank v. Bank, 95 U.S. 557; Bank v. Armstrong, 152 U.S. 346; U. S. Nat'l Bank v. Bk. 64 F. 986; 1st Nat'l Bank v. Duncan, 141 F. 926. No consideration passed for the notes. Shadburne v. Daly, (Cal.) 18 P. 403; Williams v. Hasshagen, (Cal.) 137 P. 111; 3 R. C. L. 1120. Accommodation party bears the liability of his surety for the party accommodated.

A. C. Allen and O. N. Gibson, for respondent.

Gentle made a payment on the note on Dec. 11, 1919. Evidence shows that defendant, Gentle, did not have in mind any question as to the character of the note. Under Section 3962 C. S., Gentle is liable on the note. His numerous letters to the bank acknowledge liability on the note; also his voluntary renewals of the original note. Findings of the trial court, on conflicting evidence, will not be disturbed. Briggs v. Koshich, 216 P. 965; Wilson v. Levin, 216 P. 870; Thompson v. Shideler (Okla.), 216 P. 161.

BLUME, Justice. POTTER, C. J., and KIMBALL, J., concur.

OPINION

BLUME, Justice.

This is an action wherein the Farmers State Bank of Riverton, a corporation, sued Ray A. Gentle, as maker, and the Investors Guaranty Corporation, as endorser, of a note dated December 31, 1920, for $ 5,000. Judgment was entered herein in favor of said bank for the amount claimed, and from this judgment both Gentle as well as the Investors Guaranty Corporation have appealed. The appeal on behalf of the Investors Guaranty Corporation is disposed of in another opinion, and this opinion deals only with the appeal taken by Ray A. Gentle, who will be referred to herein as the appellant.

The only defense made by appellant was that the note sued on is merely a renewal of a note originally given as an accommodation to the bank; that hence the note sued on is but an accommodation-note; and that he never received any consideration therefor. Respondent denied such claim and the only point argued on this appeal is as to whether or not the evidence is sufficient to sustain the finding of the trial court on this issue. Testimony was introduced in behalf of appellant tending to show that the note in suit is a renewal of a note originally given on May 17, 1919; that at that time Harry J. Hall, then acting as cashier of respondent bank, and J. A. Delfelder, a director of the bank, came to appellant and wanted to issue to him 40 shares of the stock of the Investors Guaranty Corporation--which corporation controlled the bank at that time--at $ 125 per share, making $ 5,000, for which they wanted appellant to execute a note to be given, however, merely as an accommodation to the bank, and to be for the purpose of enabling it to borrow money. Appellant testified that he gave the note of May 17, 1919, in accordance with these conditions, and that he never received any of the 40 shares of stock above mentioned. He admitted, however, that he signed the stock over to the bank about May 10, 1920. It appears that he never receipted for the stock on the stock-books of the Investors Guaranty Corporation. The note of May 17, 1919, was used for the purpose of rediscount in August, 1919.

There is testimony in the record, on behalf of respondent bank tending to show that appellant paid half of the note given for the stock, namely $ 2500, sometime in the fall of 1919. This is denied by appellant and he claims that this payment was in liquidation of money borrowed by him from said bank during that year. It is admitted that appellant borrowed $ 2500 from the bank during 1919, and gave a note therefor, and also that he paid the sum of $ 2500 to the bank during that year. The point on which of the notes the payment was made is of importance, for if appellant voluntarily paid one-half of the note given for the stock soon after it was issued to him, his claim that the note of May 17, 1919, was given as an accommodation for the bank, would seem to rest upon a rather weak foundation. The court evidently believed the testimony produced by the bank. Only one note was given on May 17, 1919, and that was for $ 5,000. On December 8, 1919, appellant gave a note to the bank for $ 2500; and...