U.S. Nat. Bank of Red Lodge v. Chappell

• Citation: 71 Mont. 553
• Decision Date: 24 November 1924
• Docket Number: No. 5547.,5547.
• Parties: UNITED STATES NAT. BANK OF RED LODGE v. CHAPPELL.
• Court: Montana Supreme Court

71 Mont. 553

UNITED STATES NAT. BANK OF RED LODGE
v.
CHAPPELL.

No. 5547.

Supreme Court of Montana.

Nov. 24, 1924.

Appeal from District Court, Carbon County; W. L. Ford, Judge.

Action by the United States National Bank of Red Lodge against Grace Chappell. Judgment for plaintiff, and defendant appeals. Reversed, and remanded for new trial.

Shea & Wiggenhorn, of Billings, for appellant.

George W. Pierson, of Billings, and John G. Skinner, of Red Lodge, for respondent.

CALLAWAY, C. J.

This is an appeal by defendant from a judgment given plaintiff, following a directed verdict.

From the proof admitted, and evidence offered which should have been admitted, the facts are pretty clear. R. B. Chappell, called Roy, was vice president of the First State Bank of Wibaux, hereafter called the Wibaux bank. As such officer he negotiated two promissory notes aggregating $13,150 to the United States National Bank of Red Lodge, hereafter called the Red Lodge bank. These notes were forged, and by Roy Chappell it seems. the indorsement upon them by the Wibaux bank was without recourse, but unrestricted as to Chappell himself. The Wibaux bank closed its doors and, shortly following that event, Roy Chappell put in appearance at Red Lodge. Immediately thereafter he returned to Wibaux, accompanied by John Romersa, vice president of the Red Lodge bank. Romersa had been connected with that bank as cashier ever since its founding in 1910, until January, 1921, when he was made vice president. He was succeeded as cashier by H. P. Cassidy, who from 1911 had been assistant cashier.

Apparently, Romersa took the forged notes with him. How he learned the notes were forged does not appear, but shortly after reaching Wibaux, Romersa sought out the defendant, Mrs. Chappell, mother of Roy Chappell, and told her something would have to be done or “they” would prosecute her son. Mrs. Chappell called her brother, Henry Mullendore, and her two other sons, J. R., or Rex, and W. B. Chappell, all from distant places, to her aid. These three arrived and took charge of the negotiations for her. Romersa in turn telephoned Cassidy to send to Wibaux John G. Skinner, Esq., a gentleman who had been attorney for the Red Lodge bank for many years. Mr. Cassidy told Mr. Larkin, president of the bank, of the telephone conversation, and the result was that Mr. Skinner was dispatched to Wibaux without delay. In the meantime conferenceswent on between Romersa and those representing Mrs. Chappell. Romersa said to Mullendore and W. B. Chappell that the bank was loser $13,150 on the forged notes, and the loss would have to be made good by the mother of Roy Chappell, or some other, or the bank would cause Roy to be prosecuted criminally After the arrival of Mr. Skinner a number of conversations took place between Romersa and Skinner, representing their bank, and Mullendore, Rex, and W. B. Chappell, representing the defendant. Romersa and Skinner were negotiating with Roy Chappell also. In addition to the threat made by Romersa that unless the forged notes were made good the forgeries would be exposed and Roy Chappell prosecuted, it was represented to Mullendore and the Chappells that in case of a settlement “they would keep the thing quiet; keep it from the public” After conferring repeatedly, those representing the defendant told Romersa and Skinner that she would give the Red Lodge bank in settlement 60 shares of corporate stock in the Wibaux Realty Company, and nothing more. At this point Messrs. Romersa and Skinner retired from the room in which the conference was then being held, but returned shortly saying that, while the offer was acceptable, together with such other property and collateral as Roy Chappell himself had agreed to turn over-constituting all of his available property and assets-the bank would not be able to accept the transfer of the stock in the form proposed, but that, in order to meet the requirements of the banking department, the bank would have to have a note with the stock as collateral (whether such representation was correct or incorrect is not material to this inquiry); Mullendore and the two sons refused to permit the defendant to execute a note, but Romersa and Skinner said it would be a mere form, and Mrs. Chappell would not have to pay it. As an assurance of this assertion Mr. Romersa wrote on a typewriter at the dictation of Mr. Skinner; an agreement which, after some amendment, was signed by Romersa for the Red Lodge bank, and which reads as follows:

“Wibaux, Montana, December 13, 1921.

Received of Grace Chappell certificate of stock numbered six for sixty shares of the Wibaux Realty Company of Wibaux, Montana; also one note for $7,150.00 of even date due on demand payable to the undersigned; it is understood and agreed that this note is received and said certificate is also received by it as a part settlement of two certain notes amounting to $13,150.00 which were indorsed with recourse by R. B Chappell and upon which the said R. B. Chappell was and is personally responsible and liable; that it is understood and agreed that said note for $7,150.00 shall be paid by the said R. B. Chappell and that in the event that he fails to pay the same, or any renewal thereof when due, that said certificate of stock immediately becomes the property of said bank and that said note or any renewal thereof shall immediately become the property of the said Grace Chappell. It being understood that said Grace Chappell was not personally liable or responsible for the two notes amounting to...