London & Lancashire Indem. Co. v. Allen

• Decision Date: 07 February 1956
• Citation: 272 Wis. 75,74 N.W.2d 793
• Parties: LONDON AND LANCASHIRE INDEMNITY CO., a foreign corporation, Appellant, v. John R. ALLEN et al., Respondents.
• Court: Wisconsin Supreme Court

Page 793

74 N.W.2d 793

272 Wis. 75

LONDON AND LANCASHIRE INDEMNITY CO., a foreign corporation, Appellant, v. John R. ALLEN et al., Respondents.

Supreme Court of Wisconsin.

Feb. 7, 1956.

James C. Geisler, Madison, for appellant.

Roberts, Roe, Boardman, Suhr & Bjork, Madison, for respondent Stitgen.

BROWN, Justice.

Defendant Allen was an employee of Security State Bank. In October and November, 1952, he embezzled approximately $15,000, the offense was discovered and he was discharged. The bank carried insurance with plaintiff London and Lancashire Indemnity Company indemnifying it against such losses. Acting to protect itself or its insurer, soon after the bank had discovered the loss it informed Allen that he must cover his shortage with promissory notes signed by reputable and solvent citizens. A note was prepared by the bank's attorney for $8,500, dated December 9, 1952, and payable on demand. This was executed by Allen and soon afterwards by the defendants Stitgen and Dollard. The insurance company made good the shortage to the bank and the bank assigned the note to the insurer, which then brought this action on it.

Respondent Dollard did not submit a brief or oral argument on the appeal. Rule 32, section 251.32, Stats., states:

'When a cause is submitted or presented by counsel for appellant or plaintiff in error, but not by the opposing party, the judgment or order appealed from may be reversed as of course, without argument.'

We do not exercise this authority to reverse the judgment dismissing the complaint against Dollard because the facts and law on the subject of the consideration for his execution of the note are identical with Stitgen's and the results should not differ; but our opinion will deal only with Stitgen.

Stitgen pleaded two separate defenses, one of which was that the note was given for a pre-existing indebtedness of Allen's to the bank and there was no consideration for Stitgen's execution of it. Trial was to the court which made findings of fact of which the ones now material are: that Stitgen was an accommodation maker; that there was no agreement among the parties extending the time of payment for the demand note; that there was no consideration for Stitgen's signature on the note; that the plaintiff is not a holder for value. The evidence supports the findings. Appellant does not contend that it is a bona fide purchaser of the note for value and without notice of its infirmities. The record makes it plain that appellant stands in the shoes of the bank.

As to the bank, at the time the note was executed by the parties Allen was indebted to it for more than the amount of the note. Section 116.30, Stats., declares:

'Value, defined. Value is any consideration sufficient to support a simple contract. An antecedent or pre-existing debt constitutes value; and is deemed such whether the instrument is payable on demand or at a future time.'

Whatever may be the case concerning Allen, it is clear that there was no consideration for the signature of Dr. Stitgen. The bank did not give money or anything of value to any one on the strength of his...