The Farmers State Bank v. Haun

Decision Date08 January 1924
Docket Number1152,1149,1157,1150,1156,1155,1151,1148,1154,1153
Citation30 Wyo. 322,222 P. 45
PartiesTHE FARMERS STATE BANK v. HAUN, ET AL. Same v. State, et al.; Same v. Waltz, et al.; Same v. Addison, et al.; Same v. Lichtenwald, et al.; Same v. Wilk, et al.; Same v. Longern, et al.; Same v. Chisam, et al.; Same v. Gordon, et al.; Same v. Delfelder, et al
CourtWyoming Supreme Court

[Copyrighted Material Omitted]

Numbers 1148 and 1153: reversed and remanded. Other cases affirmed.

W. C Mentzer, Brome & Hyde for appellant.

In each of the cases a demurrer was filed by Investors Guaranty Corporation on the ground that no cause of action was stated and improper joinder of defendant. The first ground, however applied to only two of the causes of action upon which judgment has been entered. The overruling of the demurrers was error; the alleged guaranty of the corporation placed on each of the notes was unauthorized and void. The court erred in refusing to strike the alleged contract of guaranty from plaintiff's amended reply on the ground that it was a departure of the case alleged in its petition. 13 C. J. 755; Clemmons v. McGeer, 115 P. 1081; Savage v. Aiken 21 Neb. 605; Durbin v. Fisk, 16 O. St. 533, Kimberlin v. Carter 49 Ind. 111, Estes v. Farnham, 11 Minn. 423. A reply cannot present a new issue. Moots v. Cope, 126 S.W. 184; Silver Bow County v. Davies, 40 Mont. 418. The Court erred in overruling appellant's motion to dissolve the attachments issued in each of the cases; the Court erred in its findings in each of the cases that appellant was chargeable as a guarantor of the notes in suit. These errors are set forth in assignments numbered 7 to 26 inclusive; Appellant Guaranty Co., denies that it was made liable as a guarantor of the notes in suit or that there was any authority for indorsing its guaranty thereon; said guaranty is not binding even in the hands of a bona fide purchaser. 3 Fletcher 1935. Persons dealing with a corporation must take notice of its powers as imposed by its charter. 14 C. J. 348, 362, 435, 436. This defense is not barred by the principle of estoppel, for the reason that the bank was not misled, and had full knowledge that the attempted guaranty was ultra vires. 10 Cyc. 1162; Mooney vs. Mooney, 128 P. 225; Blood v. Marcose, (Cal.) 99 A. D. 435; Buena Vista O. C. Co. v. Park Bank (Cal.) 180 P. 12; Black v. Bank (Md.) 54 A. 88; Davis v. Rockingham Ins. Co. (Va.) 15 S.E. 54; Palo Alto M. B. & L. Co. v. Bank, 164 P. 1124; Nat. Bank v. Puget Sound Co., 112 P. 265. The directors meeting was not properly called and some of the directors were interested and therefore disqualified to act or vote authority for the alleged guaranty, 3 Fletcher 1868, 1889. Appellant could not hold stock of the bank, 5056 Comp. Stats., 26 Cyc. 899. The title to corporate assets is in the corporation and not in the stockholders. Peoples Bank v. Board of Com'rs. 104 P. 55; Gibbons v. Mahon, 136 U.S. 577; Van Allen v. Nolan, 70 U.S. 573; Tenn v. Whitworth, 117 U.S. 129; New Orleans v. Houston, 119 U.S. 265. Luikart as Secretary of the Guaranty Co. would have no different authority or control of the bank's assets, if the Investors owned all of the bank shares, than if it owned but one share. Mr. Luikart as Secretary of the Investors, could not lawfully agree with himself as President of the bank that the Investors Co. would, without consideration, guarantee the payment of commercial paper of the bank; an accommodated party has no right to sue the accommodation party, 8 C. J. 259; Bank v. Duncan, 141 F. 926-8; Williams v. Hasshagen, (Cal.) 137 P. 9; Green v. McCord, 85 So. 750. Lack of consideration may be shown as between the accommodating and accommodated parties. Lackawanna Trust Co. v. Carlucci, (Pa.) 107 A. 693. Want of consideration, and that paper was given for accommodation may be shown by parol, Bank v. Dorvall, 98 A. 476; Long v. Todd, (Mo.) 226 S.W. 262; Bank v. Freeman, 98 S.E. 558; Syllabus State Bank v. Pangerl, 165 N.W. 479. The indorsement of negotiable paper by a corporation without consideration, and for money accommodation is ultra vires and void, 14a C. J. 738. A note held by a State Bank is void, unless made payable by its terms or indorsement to the bank, 5148 C. S., Vannatta v. Bank, 9 O. St. 27-34. The finding of the court that plaintiff was entitled to recover a 10 per cent collection fee, is unsupported by evidence. Porter v. Monarch, 17 Id. 364, 106 P. 299, 27 L. R. A. (NS) 111; McAllister's App. 59 P. A. 204; Broadhurst v. Brumback, 16 P. 555. An indorser is not liable for attorney fees stipulated on the face of the note. Robinson v. Aird, (Fla.) 29 So. 633. The facts in the Delfelder case in some respects are unlike the other cases. The Appellant received no consideration and Mr. Kingery had no authority to bind it by guaranty of payment of said notes. The judgment of the trial court should have been for defendants.

A. C. Allen and O. N. Gibson for Respondent.

An allegation that the payee of a note endorsed and delivered it to plaintiff, sufficiently alleges ownership in plaintiff. 8 C. J. 887; Pryce v. Jordan (Cal.) 11 P. 185; Curtin v. Kowalsky, (Cal.) 78 P. 962; Stamper v Gay, 3 Wyo. 321; Higgins v. Bullock, 66 Ill. 37 l. c. 39. Allegations of fact from which an indebtedness from defendant to plaintiff can be inferred, sufficiently shows non-payment. 8 C. J. 883, 1056; Howard v. Richards 2 Nev. 128, l. c. 132, 90 Am. D. 520, 8 C. J. 884n; Davison v. Bighorn Lumber Co., 14 Wyo. 422. An error in sustaining or overruling a demurrer, is harmless if substantial rights of objecting party are not affected. 4 C. J. 930; 4 C. J. 935 and numerous cases there cited; Stephensville R. R. Co., v. Wheat (Tex. Civ. App.) 173 S.W. 974; Stein v. United R. Cos. Co., 159 Cal. 368, 113 P. 663; Peterson v. Mineral King Fruit Co., 140 Cal. 624, 74 P. 162; Contreras v. Merck, 134 Cal. 211, 63 P. 336; Young v. Benton, 21 Cal.App. 332, 131 P. 1051; 4 C. J. 936; Dunlap v. Broils (Tex. Civ. App.) 141 S.W. 289; First Nat. Bank v. Stephens, 157 Ky. 663, 163 S.W. 1097. Averments of a reply avoiding any matter in the answer even though not supporting the petition if not inconsistent therewith, are not a departure. 31 Cyc. 256 and numerous cases cited; 31 Cyc. 259 and cases cited; 13 C. J. 914; Rainsford v. Massengale, 5 Wyo. 6; Home State Bank v. School Dist. (Kans.) 169 P. 202; Sturgeon v. Culver (Kan. ) 124 P. 419; Hunter Milling Co. v. Allen 74 Kan. 679, 88 P. 252, 8 L. R. A. (NS) 291; 21 R. C. L. Sec. 116. Guaranty contracts by appellant under circumstances disclosed by the evidence were not ultra vires. Sec. 3962, Comp. Stats. of Wyo. 1920; Reed v. First Nat. Bank of Pueblo, 48 P. 509; 8 C. J. 255; 2 Fletch. Cyc. 1873, 1975; Wood Lub. Co. v. Moore (Cal.) 191 P. 905, 11 A. L. R. 549, 554, and annotations. Notwithstanding provisions of appellant's charter, respondent is not precluded from recovery, because the contracts were not signed by the president and attested by the corporate seal, 10 C. J. 1255; 14a C. J. 269, Sec. 2118, 2120; 3 Fletch. Cyc. 2441, citing; Carey v. McDougland, 7 Ga. 84; Mechanics' Bank of Alexandria v. Bank of Columbia, 5 Wheat. (U.S.), 326, 5 L. ed. 100; Merchants' Bank of Macon v. Central Bank, 1 Ga. 418, 44 Am. Dec. 665; Rockwell v. Elkhorn Bank, 13 Wis. 653; 3 Fletch. Cyc. 2441, 2442 and other cases cited; 2 Fletch Cyc. 2445. The form of the indorsement did not invalidate the notes, Sec. 5148 C. S. 1920; 7 C. J. 713; 3 Fletch. Cyc. 2441, 2442, 2445. The guaranties were supported by ample consideration; a note or endorsement by a stockholder for the purpose of preventing a depletion of bank's assets, is supported by a sufficient consideration and enforceable, 28 C. J. 915, 920, 921; Sections 3957 and 3958 C. S; 8 C. J. 236; Union Bank v. Sullivan, 214 N.W. 332, 108 N.E. 558; Sickles v. Harold, 11 Misc. 583, 32 N.Y.S. 488; State Bank v. Kirch, 26 Pa. 452, 65 A. 932; Dykeman v. Keeney, 10 A.D. 610, 42 N.Y.S. 488; Utah Nat. Bank v. Nelson, 38 Utah 168, 111 P. 907; Best v. Thiel, 79 N.Y. 15; Skordal v. Stanton, 89 Minn. 511, 95 N.W. 449; State ex rel. v. Hills (Ohio) 115 N.E. 1015, L. R. A. 1917B 684; Bank v. Doyle (Cal. App.) 203 P. 780. While an agent or officer cannot represent conflicting interests, the rule does not apply if there be no conflict, when both interests understand and consent thereto, 2 C. J. 712, 713; contracts between corporations having the same officers and directorate, while voidable, may be ratified and made binding 14a C. J. 125, 365; Smith v. Stone 21 Wyo. 62. The guaranties were ratified, where the general manager of a corporation, without authority executes guaranties of payment and the corporation knowingly receives a consideration therefor, the retention of the consideration is a ratification of the guaranty, Armour & Co. v. R. Rosenberg & Sons, Co., 36 Cal.App. 773, 173 P. 404; Cudahy P. Co. v. R. Rosenberg & Sons Co., 36 Ca. App. 818, 173 P. 406; Lake Street Elev. R. Co. v. Carmichael 82 Ill.App. 344; 184 Ill. 348, 56 N.E. 372; Hunt v. Northwestern Mortg. Trust Co., 16 S.D. 241, 92 N.W. 23; Curtis v. Natalie Anthracite Coal Co., 89 A.D. 61, 85 N.Y.S. 413, 181 N.Y. 534, 73 N.E. 1122; Higgins v. Frank, 4 Wyo. 502. Allegations of indorsement and transfer are sufficient to show plaintiff's title, 18 C. J. 887; Stamper v. Gay, 3 Wyo. 321; Higgins v. Bullock, 66 Ill. 37. Alleged ownership is presumed to continue, Curtin v. Kowalsky 78 P. 962. Non-payment is sufficiently alleged, 8 C. J. 883, 22 C. J. 90; Lawson's Pre. Ev. 210; Sullivan v. Shea, 162 P. 925; Murt v. Lemon, 75 P. 160; Love v. Edmonston, 27 N.E. 354; Diel v. Stagner, 56 Mo. 353. Non-payment is presumed from possession, Howard v. Richards, 2 Nev. 128, 132, 90 Am. Dec. 520. Introducing instrument in...

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