Iglehart v. Todd

• Decision Date: 18 November 1930
• Docket Number: Nos. 13864-13866.,s. 13864-13866.
• Citation: 173 N.E. 289
• Parties: IGLEHART et al. v. TODD et al.
• Court: Indiana Appellate Court

173 N.E. 289

IGLEHART et al.

v.TODD et al.^*

Nos. 13864-13866.

Appellate Court of Indiana, in Banc.

Nov. 18, 1930.

Appeal from Superior Court, Marion County; Linn D. Hay, Judge.

Actions by Robert I. Todd, by John J. Appel, and by Frank M. Millikan against Eugene H. Iglehart and another, receivers for J. F. Wild & Company, in which defendants filed a cross-complaint. Todd died before the trial, and Appel died before the judgment, and the legal representatives of their respective estates were substituted as parties. From judgments for plaintiffs, defendants appeal.

Affirmed.

Frank B. Ross and Norman E. Patrick, both of Indianapolis, for appellants.

F. Winter, D. E. Watson, J. W. Fesler, Harvey J. Elam, Howard S. Young, and Irving M. Fauvre, all of Indianapolis, for appellees.

McMAHAN, J.

Eugene H. Iglehart and Richard L. Lowther are receivers for the J. F. Wild & Company, formerly bankers in the city of Indianapolis. Among the assets coming into the possession of appellants, when they assumed their trust, were three promissory notes: One for $25,000 executed by Robert I. Todd, one for $25,000 executed by John J. Appel, and one for $50,000 executed by Frank M. Millikan. Todd, Appel, and Millikan each brought an action against appellants as receivers, and the J. F. Wild & Company, herein referred to as the bank, alleging that his note had been executed without any consideration and solely for the accommodation of the bank, and asking that appellants be enjoined from asserting that his note was valid and collectible, and asking for the surrender, and cancellation thereof. Appellants filed a cross-complaint in each of said actions in which they sought to recover a judgment on each of said notes. Todd died before the trial and Appel died before judgment, and the legal representative of their respective estates was substituted as parties. There was judgment in each case that the note should be canceled, that the receivers be enjoined from claiming them as assets of the bank, and that the receivers were not entitled to recover thereon. From these judgments the defendants appeal, the error assigned in each cause being the overruling of appellants' motion for a new trial. The particular contentions in each case are that the decision of the court is not sustained by sufficient evidence, that it is contrary to law, and error in the admission of certain evidence.

The facts as disclosed by the evidence are in substance as follows: An examination of the bank made at the instigation of the bank commissioner of Indiana, which was completed December 3, 1926, revealed that the capital of the bank was impaired to the extent of about $80,000. Following this examination, the bank commissioner notified the officials of the bank that it would be necessary to levy a hundred per cent. assessment on the capital stock or to raise $100,000 in money to take care of the impaired capital. There was talk about increasing the capital stock. The bank commissioner told the bank officials $100,000 of new money would have to be put in, if the stock was not increased. John F. Wild, president of the bank, told the bank commissioner that he had some wealthy friends who had helped him in the past and who would respond to any request he would make of them. Appellee Millikan was mentioned as being one of these men. The bank commissioner told Wild to bring him government bonds or other high-grade securities worth $100,000 and the matter could rest until the capital stock was increased. A few days later Wild delivered to the bank commissioner $100,000 in bonds, without telling the commissioner anything about where or how he had procured them. As a matter of fact these bonds were the property of the bank and had been listed and carried as assets of the bank. Following the demand of the bank commissioner that the capital of the bank be repaired to the extent of $100,000, the president of the bank went to three of his friends, Robert I. Todd, John J. Appel, and Frank M. Millikan, and told each of them he wanted some help from them. As a result, the three notes in question were executed and delivered to the president of the bank, who turned them over to the bank and caused them to be listed as assets of the bank and credited to the profit and loss account. When this was done, Wild, as president of the bank, took the $100,000 bonds heretofore mentioned from the assets of the bank and delivered them to the bank commissioner as above stated. The bank commissioner had no information concerning the execution of said notes and the substitution of them for the bonds which had been delivered to him. Appel and Millikan each testified that when he executed his note he had no information concerning the impairment of the capital of the bank; that no one told him the bank commissioner had made a demand that such capital be repaired; that he was not informed of the manner in which or the purpose for which the bank desired or intended to use his note; that he received no consideration for the execution of his note and that no consideration moved to or from the bank; and that the same was executed simply as an accommodation to the bank. The president of the bank, who...