Powell v. Sec. Nat'l Bank

• Decision Date: 03 December 1929
• Docket Number: Case Number: 18442
• Parties: POWELL v. SECURITY NATIONAL BANK.
• Court: Oklahoma Supreme Court

1929 OK 519

284 P. 5

141 Okla. 169

POWELL v. SECURITY NATIONAL BANK.

Case Number: 18442

Supreme Court of Oklahoma

Decided: December 3, 1929

Syllabus

¶0 1. Bills and Notes--Proof of Want of Consideration in that Suit Was on Renewal Note and Original Note Had Been Paid.

In a suit on a promissory note, where one of the defenses is want of consideration, evidence on behalf of defendant to the effect that the note in suit was given plaintiff to renew a prior note which had been given another party, and that the original note had been paid, is admissible.

2. Same--Proof of Contemporaneous Parol Agreement for Payment of Note with Work Which Had Been Breached by Payee.

Evidence to the effect that at the time the renewal note was given, and as consideration therefor, a parol, contemporaneous agreement was entered into, whereby it was agreed that the note should be paid only out of certain work to be furnished and procured by the payee for the payor, and that said agreement had been breached by the payee, is admissible for the purpose of establishing want of consideration for the note.

3. Fraud--Actionable Fraud--False Promises.

The nonperformance of a promise made without an intention to perform may be the basis of actionable fraud in an action at law, but the mere nonperformance of a promise not made under circumstances inconsistent with an honest purpose to perform is not sufficient to raise an issue on the question of fraud in such an action.

Commissioners' Opinion, Division No. 2.

Error from District Court, Tulsa County; A. C. Brewster, Assigned Judge.

Action by the Security National Bank of Tulsa against C. F. Powell. Judgment for plaintiff, and defendant appeals. Reversed.

J. M. Springer, Louis W. Pratt, and W. N. Banks, for plaintiff in error.

Chas. L. Yancey, Henry L. Fist, and Whit Y. Mauzy, for defendant in error.

JEFFREY, C.

¶1 The Security National Bank of Tulsa, herein called plaintiff, began this suit against C. F. Powell for judgment on a promissory note in the sum of $ 19,000. The note was dated July 15, 1925, payable to the Security National Bank 90 days after date and signed by Powell. Powell filed an answer in which he admitted the execution of the note, but pleaded substantially the following state of facts: That on or about May 19, 1923, he, for the purpose of securing funds with which to buy an oil and gas lease, secured a loan from the Liberty National Bank of Tulsa, hereinafter referred to as L. Bank, in the sum of $ 25,000, and gave his note therefor; that A. E. Lewis, who was president of the L. Bank, agreed to negotiate the deal for the lease; that Powell transferred the net amount of the loan to his account in a New York bank and executed two checks on that bank in favor of the L. Bank, one being for $ 20,000 and one for $ 4,495, and left them with Lewis to be used in purchasing said lease. It is alleged that the difference between the two checks and the amount of the loan was the discount to be charged for the loan; and that Powell only received credit at the L. Bank for the sum of $ 24,495. The answer further alleges that within a day or two after the execution of the note and the two checks, Powell again returned to the L. Bank and inquired of A. E. Lewis if he had secured the oil and gas lease, and that Lewis informed him, in substance, that the lease could not be purchased. Thereupon Powell requested Lewis to apply the two checks in payment of the note and destroy it. Powell alleged that the note which had been made payable to the L. Bank was made payable 90 days after date; that he believed and understood that the same had been paid and destroyed, but that on November 5, 1923, the plaintiff purchased of the L. Bank, by written contract, all the property and assets of the L. Bank, including the note of date May 19, 1923, for the sum of $ 25,000. It is then alleged that plaintiff called upon Powell for payment of the note; that he refused to pay same, explaining that the note had been fully paid; but that the officers and agents of plaintiff bank informed Powell that he was, under such circumstances, guilty of a conspiracy with the said A. E. Lewis to wreck a national bank in violation of the national banking laws and subject to prosecution and sentence to the federal penitentiary, but that if Powell would execute a new note to plaintiff, the bank would protect him against criminal prosecution. It is further alleged that thereafter the president of plaintiff bank also told Powell that if he would execute a new note, that bank would throw him enough business in his profession as an appraisal engineer and tax expert to pay said note without disturbing his capital. It is then alleged that Powell believed the threats and promises made to him, and was induced thereby to execute a new note to the Security National Bank for the sum of $ 25,000. The answer further alleges that from time to time Powell paid the interest on the note and renewed it several times. It is also alleged that plaintiff gave Powell employment as an appraisal engineer and tax expert to the amount of $ 810, which was credited on the note, and that Powell made other payments on the principal and interest so as to reduce the amount thereof to $ 19,000; and that the note in suit is a renewal note of the original transaction so had. It is further alleged that plaintiff breached its agreement to furnish or secure enough tax work for Powell whereby the note could be paid from this source. It is then alleged that the officers and agents of plaintiff bank falsely and fraudulently made the threats and promises which induced Powell to execute the note to plaintiff for the purpose of securing said note, and that there was no consideration for the giving of any of said notes except the first note to the L. Bank, which had been fully paid. All of the material allegations in Powell's answer were denied in the reply.

¶2 When the cause came on for trial plaintiff introduced its note and rested. Defendant undertook to show the origin of the transaction, and undertook to testify to a conversation had between defendant and A. E. Lewis showing the purpose for which the first note was given; that checks were left with Lewis with instructions to apply the same in payment of the note. This was objected to, and the objection was sustained. Thereafter, counsel for defendant attempted to prove, and properly offered to prove all of the material allegations of his answer tending to show that the original note to the L. Bank had been paid, that no consideration was given by plaintiff for the first or any subsequent renewal note, or if there ever had been a consideration, that it had failed; that the officers of plaintiff bank had represented to Powell that if he would execute the note the bank would furnish or secure him sufficient business in his profession with which to pay the note so that he would not have to use any assets then...