Looney v. Belcher
| Citation | 192 S.E. 891 |
| Court | Supreme Court of Virginia |
| Decision Date | 23 September 1937 |
| Parties | LOONEY et al. v. BELCHER et al. |
Appeal from Circuit Court, Buchanan County; A. C. Lively, Judge.
Suit by Bartley Belcher and others against Theodore Looney and Carl E. Looney. From an adverse decree, the defendants appeal.
Affirmed.
Argued before CAMPBELL, C. J., and HOLT, HUDGINS, GREGORY, BROWNING, EGGLESTON, and SPRATLEY, JJ.
S. H. & George C. Sutherland, of Clintwood, for appellants.
H. Claude Pobst and F. H. Combs, both of Grundy, for appellees.
The facts of this case are, in brief, these: In April, 1921, there were two banks operating in the town of Grundy, Va. One was the Bank of Grundy, Incorporated, a state bank; the other was the First National Bank of Grundy. Prior to April 9, 1921, a customer of the Bank of Grundy, Fred Vandyke, had on deposit in that bank $43,760, represented by six certificates of de-posit. Three of these certificates were for the sum of $10,000 each and one for $10,200. The others were for lesser amounts.
It appears that the Bank of Grundy was doing business in an old and unimpressive building, without the modern safety appliances and conveniences. Its rival, the First National Bank, was operating in a more modern building, with superior vault facilities.
Officials of the latter bank made an effort to induce Vandyke to place a portion of his money on deposit in their bank, emphasizing its physical safety advantages. This effort succeeded to the extent of Vandyke's assignment of two of his $10,000 certificates to the First National Bank, which issued its certificates to him for like amounts. The Bank of Grundy certificates were presented to it on the following day for payment, in due course, which would have resulted in the transfer of $20,000 from the one bank to the other. The cashier of the Bank of Grundy and H. Claude Pobst, one of its directors, went posthaste to the home of Mr. Vandyke and persuaded him to abandon the transfer that he had in mind and leave his deposits, intact, in their bank. As an inducement for him to do this, and to create in him a feeling of security in continuing his deposits in the Bank of Grundy, the officers of this bank agreed to give him their bond securing and guaranteeing any loss which might accrue to him on account of these deposits.
This method of making Vandyke safe apparently satisfied him for he made no further efforts to withdraw his money until some eighteen months thereafter he withdrew $35,000 for the purpose of paying for a farm which he had bought in Ohio upon his removal from Virginia to that state, in 1922 or 1923.
The bank renewed his certificates of deposit annually and sometimes semiannually, paying or adding in the accrued interest which had been earned. Vandyke, though residing in Ohio after 1923, retained property interests in Buchanan county, Va, Grundy being the county seat, and he returned there each year, and sometimes oftener, to collect his rents, pay taxes, etc. Thus he continued to do business with the bank, and, when it failed, in May, 1931, he had on deposit with it the sum of $10,000, represented by a certificate of deposit dated November 1, 1930, which was a part of the original deposit made in 1921. He had kept, through the intervening years, the bond of guaranty before referred to. Just after the bank closed he sought the advice of his attorney, in connection with the bond, for what purpose does not appear in the record, but supposedly for information as to its validity. Thereafter, it became misplaced or lost and was found some two years afterward.
In 1934, Vandyke went to Grundy with the bond and demanded payment of the amount of his deposit from the receiver of the Bank of Grundy, and being unsuccessful in this effort he demanded payment of the money from the sureties on the bond. One of these sureties was John A. Looney, who was the president of the bank and a director at the time of the execution of the bond and at the time of his death, which was in April, 1922.
Mr. Pobst, who was also a director of the Bank of Grundy and one of the sureties or guarantors by virtue of the provisions of the bond, became the administrator of the Looney estate and the guardian of the three children, two of whom are the appellants here.
The shares of stock of the Bank of Grundy belonging to the estate of John A. Looney were distributed to his heirs at law, two of whom are the appellants in this suit, and the appellants sold their shares before the bank failed. All of his heirs at law are solvent and own sufficient real estate, which was derived from the estate of their father, to pay the amount for which their father was liable on the bond of guaranty.
In 1935, after Vandyke had demanded payment from the sureties on the bond, three of them, who were solvent, Bartley Belcher, F. H. Combs, and H. Claude Pobst, realizing their liability on the bond, by treaty with Vandyke at his home in Ohio, effected a compromise with him by the payment of $9,000 and incurring the costs of the negotiations. Thus a saving of more than $1,000 to the sureties was accomplished through the efforts of those mentioned.
They subsequently called upon the appellants to pay the portion of the $9,000 which their father would have been liable for had he been living. They declined to pay the amount or any part thereof.
These facts and circumstances resulted in this suit by the appellees against the appellants for contribution.
It may be here noted that upon the payment of the $9,000 in full settlement of the Vandyke claim he assigned to the appelleesthe certificate of deposit and the surety bond.
Two of those who were sureties and bound on the bond were not in a financial state to pay anything, but those who did pay agreed to give them time in which to discharge their obligation. A judgment was secured against another for his part and still another was hopelessly insolvent.
The trial court held that the appellants were liable to the appellees for one-seventh of the amount which they paid to Vandyke and decreed accordingly. From that decree an appeal was allowed by this court.
The surety bond sued upon is as follows:
There are two assignments of error in which a number of defenses are urged. We shall discuss them in a rather general way.
First, the validity of the bond is assailed because it is alleged that there was no consideration deemed valuable in law for its execution. The circumstances and facts which brought the bond into existence and its recitals negative this position. The evidence tends to show that the bank was a small country institution which was struggling along; that it had a rather alert and vigorous rival in the field of operation; that one who could make time deposits of the dimensions and importance of those made by Vandyke meant much to it; that Vandyke was a careful man of some business acumen; that he had begun to feel a little uneasy about the safety of his savings. It was a large sum and he did not feel quite secure with all of his eggs in one basket. He determined to divide it between the two banks but was induced to relinquish this plan because of the willingness of his financial friends and those in whom he had confidence to make him safe by the security which they suggested and proffered to him.
This state of facts shows the forbearance of Vandyke to insist upon a scheme of greater safety and adopt that of others who were unquestionably advantaged and benefited by such forbearance. If these elements in their setting, do not constitute consideration--aye, valuable consideration --which will support a contract, then we have misconceived the law.
In the case of Ballard v. Burton, 64 Vt. 387, 24 A. 769, 771, 16 L.R.A. 664, the case of Burr v. Wilcox, 13 Allen (Mass.) 269, 273, was approvingly quoted as aptly defining the term "consideration." It was in these words: "Any act done at the defendant's request, and for his convenience, or to the inconvenience of the plaintiff, would be sufficient."
Consideration means, not so much that one is profiting, as that the other abandons some legal right in the present. Pollock on Contracts, p. 166.
1 Parsons on Contracts, p. 442, treating the subject under...
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