People's Trust & Savings Co. v. Arthaud

• Decision Date: 02 December 1929
• Docket Number: No. 20728.,20728.
• Citation: 22 S.W.2d 860
• Court: Missouri Court of Appeals
• Parties: PEOPLE'S TRUST & SAVINGS CO. v. ARTHAUD.

22 S.W.2d 860

PEOPLE'S TRUST & SAVINGS CO. v. ARTHAUD.

No. 20728.

St. Louis Court of Appeals. Missouri.

December 2, 1929.

Appeal from Circuit Court, Ralls County; Charles T. Hays, Judge.

"Not to be officially published."

Action by People's Trust & Savings Company against J. D. Arthaud. Judgment for defendant, and plaintiff appeals. Affirmed.

Harry Carstarphen, of Hannibal, for appellant.

E. L. Alford, of Perry, and F. L. Arthaud, of Chillicothe, for respondent.

NIPPER, J.

This is a suit on a note, instituted in the circuit court of Ralls county, Mo., on January 31, 1928. The petition alleges that J. D. Arthaud, defendant, together with F. L. Arthaud and Joseph Arthaud, duly executed and delivered and promised to pay to the order of the People's Trust Company of Chillicothe, Mo., their note dated December 1, 1923, for $2,812.26, due four months after date, with interest at the rate of 8 per cent.; that the People's Trust Company duly indorsed and delivered said note to plaintiff, People's Trust & Savings Company; and that such plaintiff is now the rightful owner and holder of said note. Plaintiff alleges that defendant paid the interest on the note to March 1, 1926, but that no other payments had been made thereon. Plaintiff asked judgment for the amount due as alleged.

The defendant, J. D. Arthaud, filed the following answer to this petition:

"The defendant specifically denies that he executed, with trust company of Chillicothe, Missouri, a note in the sum of $2812.26 or any other amount, on date December 1st, 1923, or on any other date, as alleged by plaintiff. The defendant denies that he paid as interest on said note, nor did he authorize the payment of interest by any one for him or in his behalf on said note, as alleged by the plaintiff to date, March 1st, 1926, or to and including any other date.

"The defendant denies that he at any time, either in the near or remote past executed and delivered, nor did he authorize any one to execute for himself and in his behalf a note in any amount to the People's Trust Company of Chillicothe, Missouri, for a consideration.

"For further answer, the defendant alleges and avers the facts to be that at no time in the past did the People's Trust Company, of Chillicothe, Missouri, hold a note executed and delivered by him to said trust company for a consideration. That at no time in the past was the People's Trust Company asked by the defendant to extend to him any credit; neither did the said People's Trust Company extend any credit to defendant by reason of being in possession of any instrument or note executed by the defendant. That the said People's Trust Company never was induced and in fact, never did extend any credit to anyone by reason of it being in possession, if at any time it was, of any instrument in writing or note executed by the defendant.

"The defendant alleges that in truth and in fact the said People's Trust Company at no time assumed that the defendant was obligated to it in any sum of money, by reason of any written instrument or note executed by the defendant.

"At no time did said People's Trust Company suggest to the defendant that he, in anywise, by reason of the note described in plaintiff's petition, was obligated to it for any sum of money. That the said trust company at no time called upon the defendant for interest in any amount for any obligation by the defendant to said trust company and that no one else was ever asked to pay for the defendant, nor in fact did pay any interest on any obligation by the defendant to said trust company; all of which facts the plaintiff knew and must have known.

"The defendant alleges said note alleged and described in plaintiff's petition is not a valid obligation of the defendant by reason of the facts herein alleged.

"Wherefore, the defendant prays for an order and decree by the court, declaring said note as set out in plaintiff's petition null and void and of no force and effect; and that the costs of this action be taxed to plaintiff."

The reply was a general denial.

The evidence discloses that in the year 1912, F. L. Arthaud and his brother Joseph Arthaud, residents of Chillicothe, Mo., were indebted to the banking institution at that time called People's Saving Bank. F. L. and Joseph Arthaud at that time were solvent, but their indebtedness appears to have exceeded the limitations placed by law upon loans which a bank could make to a single individual. Under these circumstances, Mr. Ellett, the chief officer of the bank, informed F. L. Arthaud, father of this defendant, that the state bank examiner was objecting to the bank making such large loans to the two brothers, and that while the bank was willing and anxious to carry the loans, in order to satisfy the bank examiner a portion of the indebtedness should be placed in the name of another party. Mr. Ellett suggested to F. L. Arthaud that he have one of his sons sign a note for a part of the indebtedness. F. L. Arthaud then explained this situation to his son, J. D. Arthaud, and sent him a note to sign for a portion of the indebtedness, and explained to him what the banker had told him. The son at that time was a young man about 21 years of age. Pursuant to the suggestions of the father, who explained the situation to him, J. D. Arthaud signed a note to the bank, due four months after date, in the principal sum of $4,480. This, on the face of matters, reduced the indebtedness of F. L. and Joseph Arthaud to a point within the limitations allowed by law. This arrangement was made at the suggestion of Mr. Ellett. J. D. Arthaud received no consideration for his signing of the note. According to the testimony, the note was executed solely for the accommodation of the bank, and in order that the bank might comply with the requirements of the state banking department. This note was renewed from time to time, until nine notes had been signed by J. D. Arthaud, each one taking up its predecessor. When the tenth note was executed, on June 4, 1915, Mr. Ellett advised defendant's father that the indebtedness of F. L. Arthaud and Joseph Arthaud had been reduced to the legal limitations. J. D. Arthaud continued to sign this note. Joseph Arthaud and F. L. Arthaud signed with him without his knowledge. The indebtedness on this particular note had been reduced in the meantime to $3,179.29. All payments on the note were made by F. L. Arthaud and Joseph Arthaud. On April 4, 1916, the note was made payable to People's Trust Company, the bank having changed its name from People's Savings Bank to People's Trust Company. On August 1, 1922, the note was again made in the same from, due in four months, for the principal sum of $3,457.36. This note was renewed on December 1, 1923, by the note in suit, the indebtedness having been reduced to $2,812.26, the amount of the note sued on. This reduction had been made by payments made by F. L. and Joseph Arthaud.

The bank never requested any payments to be made by the defendant. J. D. Arthaud continued to sign the various renewal notes as they were sent to him. Eventually, J. D. Arthaud began protesting about signing these renewal notes. F. L....