The Peoples State Bank of Hartville v. Hunter

• Decision Date: 02 July 1924
• Citation: 264 S.W. 54,216 Mo.App. 334
• Parties: THE PEOPLES STATE BANK OF HARTVILLE, Respondent, v. GEORGE M. HUNTER, Appellant
• Court: Missouri Court of Appeals

264 S.W. 54

216 Mo.App. 334

THE PEOPLES STATE BANK OF HARTVILLE, Respondent, v. GEORGE M. HUNTER, Appellant

Court of Appeals of Missouri, Springfield

July 2, 1924

Appeal from the Circuit Court of Wright County.--Hon. C. H. Skinker Judge.

AFFIRMED.

Judgment affirmed.

Curtis & Vandeventer for appellant.

(1) This note was without consideration. Absence of consideration is good defense on a promissory note, against anyone not a holder in due course. State ex rel. v. Bank, 187 S.W. 597, 598; R. S. 1919, sec. 815; Newburg Bank v Heflin, 189 Mo.App. 292; R. S. 1919, sec. 844; 8 C. J. p. 747, sec. 1019; O'Day v. Annex Realty Co., 236 S.W. 22; Farmers Bank v. Harris, 250 S.W. 946. (2) Plaintiff is not a holder in due course. The note was not indorsed and was assigned after maturity. R. S. 1919, secs. 817, 835; Long v. Shafer, 185 Mo.App. 641; R. S. 1919, secs. 844, 839; 8 C. J. 477, sec. 2. (3) A plea of estoppel to be sufficient must plead the facts and elements of estoppel. Gillen v. Ins. Co., 161 S.W. 673; Osburn v. Court of Honor, 152 Mo.App. 661.

E. L. Rayborn and N. J. Craig for respondent.

(1) The court did not err in finding the issues for plaintiff for the reason that the note sued on was supported by a sufficient consideration. Any benefit, profit or advantage to the promisor or any loss, detriment or inconvenience to the promisee is a sufficient consideration to support a note. 8 C. J. 212, sec. 347; Nelson v. Diffenderfer, 178 Mo.App. 48; Williams v. Jensen, 75 Mo. 681; German v. Gilbert, 83 Mo.App. 441. (2) The enhancement of the value of a bank stockholder's stock is a sufficient consideration to support a note given by the stockholder to the bank. First Natl. Bank v. Henry, 202 S.W. 281; Union Bank of Brooklyn v. Sullivan, 214 N.Y. 332, 108 N.E. 558. (3) A release from a liability already incurred is a sufficient consideration for a note. (4) The maker of a note will not be permitted to prove that though he executed the note it was at the time agreed that he need not pay it. Third Natl. Bank v. Reichert, 101 Mo.App. 242; Bass v. Sanborn, 119 Mo.App. 103. (5) An accommodation maker of a note is liable on the instrument to a holder for value, notwithstanding such holder at the time of taking the instrument knew him to be only an accommodation party. R. S. 1919, sec. 816; Moffatt v. Greene, 149 Mo. 48.

FARRINGTON, J. Cox, P. J., and Bradley, J., concur.

OPINION

FARRINGTON, J.--

This is an action on a promissory note by the Peoples State Bank, Assignee of the Bank of Hartville, the payee in said instrument. In answer to the petition the defendant avers that the note was given without any consideration therefor, all of which was well known by the officers of plaintiff bank, and that they were not purchasers for value and without notice, and took said note subject to the equities between the original parties.

Defendant's evidence tends to show that Bank Examiner Beam examined the Bank of Hartville in April, 1920, and on his examination being completed reported a shortage of $ 1888.56. Defendant was at the time cashier of the Bank of Hartville. He was ordered by the Examiner to charge off the amount or fix it in some way. There was at the time approximately $ 20,000 in the surplus fund. Defendant contended that there was no shortage but that said discrepancy was an error in bookkeeping or in the notes re-discounted at the McDaniel National Bank at Springfield, and that to make the books balance until the error could be discovered and the surplus undisturbed, defendant executed the note sued upon and placed it in the bank pending his investigation of the matter. His testimony shows that this was not done at the request of any officer or stockholder of the bank but of his own volition to satisfy the State Banking Department, and merely as a temporary arrangement pending his investigation. The directors and stockholders of the Bank of Hartville had full knowledge of the matter. The note was dated May 4, 1920, and was payable on demand. No interest was ever paid on it but was marked paid so it would not show overdue on the books.

On the 26th day of March, 1921, the Bank of Hartville was closed by the State Banking Department and the note sued on was still in the bank. A reorganization, or rather the organization of another bank was effected in a short time and a contract was entered into by the directors of the Bank of Hartville and the Peoples State Bank, the new bank, and the plaintiff here, by which the plaintiff was to assume the liabilities of the old bank and in consideration thereof was to have certain securities of the Bank of Hartville. In the contract there were also some notes listed in a paper attached which were to be in trust for the Bank of Hartville. Two trustees were appointed, one being the president of plaintiff bank and a witness used by plaintiff at the trial. The trustees were to collect these notes or get them secured. The Peoples State Bank had the privilege of exchanging any of the notes it took over for any of the notes in the trustees' fund within a period of three years after the date of the contract. The note sued upon was placed in the trustees' fund. In August, 1921, it was taken in exchange by plaintiff herein without any endorsement. Defendant testified that he told the president of plaintiff bank about how the note was made even before the Bank of Hartville closed. The Bank Examiner was informed of the matter and knew that the note was given to take up the alleged shortage. It was reported to the banking department in the list of notes owned by officers of the bank.

Defendant was never asked to put the note in the bank but did so of his own volition after the Bank Examiner had told him to do something to make up the shortage. The contract of liquidation was drawn up by the Bank Examiner and the directors of the Bank of Hartville had nothing to do with it except to sign it. The note was never endorsed by the payee therein. There was no warranty of its genuineness and it was taken over by the Peoples State Bank long after it was due and after the bank knew that plaintiff executed the note to take the place of notes which the Bank Examiner found the bank to be short.

Nearly eleven months after this note was made, it having been in the Bank of Hartville, the defendant and other stockholders, officers and directors made the contract of March 25, 1921, in which he makes this statement: "That in addition to the assets and paper turned over by the Bank of Hartville to the Peoples State Bank, there remains uncollected paper and obligations due said bank, a list of which is hereto attached, marked "Exhibit A," and the note in suit was one of the uncollected notes and "obligations due said bank."

The trial court, sitting as a jury, found the issues against the defendant and gave judgment for plaintiff. He appeals relying on the ground that the note was without consideration, and that this defense could be made in the hands of this plaintiff who is not a holder in due course. No instructions were asked or given, and as the defense of failure of consideration places...