First Nat. Bk. v. Wagner
| Decision Date | 11 April 1927 |
| Docket Number | 5675 |
| Parties | FIRST NATIONAL BANK OF YANKTON, Plaintiff and respondent, v. GEORGE C. WAGNER et al, Defendant and appellants. |
| Court | South Dakota Supreme Court |
Appeal from Circuit Court, Yankton County, SD
File No. 5675—Affirmed
H. A. Doyle, Yankton, SD
G. M. Caster, Lake Andes, SD
Attorneys for Appellants.
Orvis & French, A. L. Wyman, Yankton, SD
Attorneys for Respondent.
Opinion filed April 11, 1927
This action was begun by the respondent to recover on certain promissory notes. The case was tried as a jury case, but the court directed a verdict for plaintiff, and from the judgment entered upon said verdict and from the order denying a new trial defendants appeal.
In June, 1922, the appellant National Bank of Commerce was financially embarrassed, and on the 17th day of that month W. E. Heaton, a managing officer of respondent bank, met with the personal appellants and with representatives of the appellant bank to devise means for liquidating the affairs of the appellant bank without loss to creditors of said Bank or resort to the stockholders’ liability. As a result of these negotiations the following promissory notes were executed and placed in the hands of said W. E. Heaton, as a representative of the respondent bank: One note for $5,000, signed by George C. Wagner as maker, and indorsed by each of the other appellants; one note for $5,000, signed by Norman C. List as maker, and indorsed by each of the other appellants; one note for $8,500, signed by Charles F. Blachnik as maker, and indorsed by each of the other appellants; one note for $5,000, signed by C. F. Rossteuscher as maker, and indorsed by each of the other appellants. Each of these notes was payable to respondent bank on December 17, 1922.
At the same time and place a written agreement was signed by the parties to this litigation and was placed in the hands of said W. E. Heaton as a representative of the respondent bank. This writing was as follows:
“It is agreed by and between the National Bank of Commerce of Yankton, South Dakota, George C. Wagner, Norman C. List, Charles F. Blachnik, W. J. Blachnik, E. A. Royem, C. F. Rossteuscher, F. G. Sickmann and George H. Cook, parties of the first part, and First National Bank of Yankton, South Dakota, and W. E. Heaton, parties of the second part, as follows:
“Said National Bank of Commerce hereby sells, assigns and transfers to said First National Bank, the notes, warrants and money described and listed on Exhibit A, attached hereto as a part of this agreement.
“Said George C. Wagner, Norman C. List, Charles F. Blachnik, W. F. Blachnik, E. A. Royem, C. F. Rossteuscher, F. G. Sickmann, and George H. Cook hereby agree to forthwith execute and deliver to said First National Bank their promissory notes aggregating the sum of $23,500, a list and description of which is attached hereto, marked Exhibit B and made a part of this agreement.
“Said First National Bank hereby assumes and agrees to pay all liabilities of said National Bank of Commerce to its depositors as the same become due and payable. A list of said depositors showing the amount due each of them and the time when the same is payable is attached hereto, marked Exhibit C and made a part of this agreement.
“Said National Bank of Commerce hereby assigns and delivers to said W. E. Heaton, as liquidating agent, all other assets of said National Bank of Commerce including its furniture and fixtures and all bills receivable not hereinbefore referred to. A list and description of said assets is hereto attached, marked Exhibit D and made a part of this agreement.
All property described in Exhibit D is to be held and collected or sold and disposed of by said W. E. Heaton as liquidating agent of said National Bank of Commerce, and the proceeds of said property shall be held and used by said W. E. Heaton for the following purposes:
“Said National Bank of Commerce and said George C. Wagner, Norman C. List, Charles F. Blachnik, W. J. Blachnik, E. A. Royem, C. F. Rossteuscher, F. G. Sickmann, and George H. Cook hereby guarantee all accounts of said National Bank of Commerce to be correct and they also guarantee the payment of all bills receivable described and listed in Exhibits A and B, including collection fees, attorneys’ fees, traveling expenses, and other costs incurred, if any, in collecting same.”
Exhibit B referred to in this agreement lists the four notes above described. Exhibit A lists a large number of notes payable to the appellant National Bank of Commerce, part of these notes being held by the Federal Reserve Bank as collateral to debts of the appellant bank.
The respondent bank took possession of these notes described in Exhibit A and proceeded to collect part of them. The respondent bank also proceeded to pay off the liabilities of the appellant bank, and in so doing paid about $18,000 to appellants C. F. Blachnik, W. J. Blachnik, George H. Cook, George C. Wagner, F. G. Sickmann, and C. F. Rossteuscher, and over $10,000 to the Treasurer of Yankton County. The total liabilities of the appellant bank which were assumed and paid by respondent bank aggregated about $60,000.
In January, 1923, the respondent brought suit against appellants for $48,672.44 on the four promissory notes made by appellants George C. Wagner, Norman C. List, Charles F. Buachnik, and C. F. Rossteuscher, and on certain of the notes enumerated in Exhibit A attached to the guaranty agreement, which notes were alleged to remain unpaid. To the complaint in that action the defendants answered denying liability on the ground that neither the promissory notes made by the four defendants aforesaid nor the guaranty agreement ever became effective because neither of said writings was ever legally delivered, in that all of said writings were placed in the hands of the aforesaid W. E. Heaton with the express stipulation and understanding that they were not to become effective unless or until the signature of one J. W. Jury was attached to each of the papers signed by the defendants, and that such signature had never been so attached. Before the trial of the issues so...
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