Whitcher v. Waddell

• Decision Date: 19 November 1930
• Docket Number: 1642
• Parties: WHITCHER, ET AL. v. WADDELL
• Court: Wyoming Supreme Court

292 P. 1091

42 Wyo. 274

WHITCHER, ET AL. v. WADDELL

No. 1642

Supreme Court of Wyoming

November 19, 1930

APPEAL from District Court, Crook County; JAMES H. BURGESS, Judge.

Action by Roy Whitcher and another, a copartnership doing business under the firm name and style of Whitcher & Simpson, and another, against Bert Waddell. Judgment for defendants and plaintiffs appeal.

Affirmed.

The cause was submitted for the appellants on the brief of W. K Somers, of Moorcroft, Wyoming, and John T. Heffron, of Deadwood, S. D.

The notes involved are negotiable instruments. Chap. 250, C. S 1920. Their negotiability is unaffected by notations on the face thereof. Sherman Bank v. Apperson, 4 F. 25; Corbett v. Clark, (Wis.) 30 Am. Rep. 763; Brown v. Cow Creek Sheep Co., 21 Wyo. 1, 126 P. 886; Taylor v. Curry, 109 Mass. 36; 12 Am. Rep. 663; Wells v. Duffy, 124 P. 907; Fellows v. Prentiss (N. Y.) 45 Am. Dec. 484. The character of the signature on the notes does not affect negotiability. 3953 C. S. An accommodation maker is liable to a holder for value. 3962 C. S. Failure of contingencies not expressed in a note, cannot be set up by parol defense. Henshaw v. Dutton, 59 Mo. 139. A good faith explanation will be adopted, rather than one involving fraud. Utah National Bank v. Nelson, 111 P. 907. An instrument uncertain in terms will be construed against party causing uncertainty. Coutre v. Ocean Park Bank, (Calif.) 270 P. 943. The trial court erred in refusing to direct a verdict for plaintiffs in view of the evidence.

The cause was submitted for respondents on the brief of E. E. Wakeman, of Gillette, Wyoming, and E. C. Raymond, of Newcastle, Wyoming.

No consideration was received by defendant for the execution of the notes and they were never negotiated. Failure of consideration is a defense against any person not a holder in due course. 3961 C. S. The notes were sold by the receiver after their maturity, and were open to all defenses. 3991 C. S. Plaintiffs did not rely on any representation of defendant, and were not injured by the defense of lack of consideration. 21 C. J. 1126, 1135. In order to create an estoppel in pais, the party pleading it must have been misled. 21 C. J. 114. Schnitzler v. Husted, 18 N.Y.S. 156. The makers were not estopped. Bank v. Felt, (Ia.) 69 N.W. 105; Woodbury v. Glick, (Ia.) 132 N.W. 67. Plaintiffs took the notes after maturity, with notice of defendants claim that he received no consideration for the notes, and denied liability thereon. The defense is permitted by statute. 3961 C. S. Plaintiffs failed to establish their allegations of estoppel. The appeal is without merit and respondent should be awarded attorney's fees and costs. 6372 C. S.

W. K. Somers and John T. Heffron, in reply.

The transaction was clearly a fraud upon creditors of the bank. Farmers State Bank v. Haun, 224 P. 856. The case of Bank v. Felt, et al., cited by defendant is not in point on the facts. The bank was insolvent, and appellants relied upon assets carried in the bank. Respondent is estopped to deny consideration. The alleged notice, by exhibits attached to the notes, was restricted to $ 2,000.00, while appellants were suing for nearly $ 6,000.00. There was no evidence to show when the exhibits were attached to the notes.

BLUME, Chief Justice. KIMBALL and RINER, JJ., concur.

OPINION

BLUME, Chief Justice.

On December 15, 1920, William G. Oelkers owed the Bank of Moorcroft the sum of $ 27,800 represented by notes, secured by mortgages on real estate and on cattle to the number of about 350. Part of the notes, the amount not appearing, had been transferred to the Livestock National Bank of Omaha, and that bank had the first lien on the cattle. Oelkers became apparently insolvent, and on the date above mentioned transferred his property, including about 350 head of cattle, to the bank. The transfer was direct to D. R. Shackleford, but the testimony shows that he was merely the agent of the bank. It was necessary to feed these cattle during the winter, and though the Livestock National Bank had the first lien, there is nothing in the record to justify the statement of appellant that such feeding would be solely for the benefit of that bank. The value of the cattle, or the equity of the Moorcroft bank, does not appear. But the bank officials evidently thought that the latter was sufficiently large to justify them in caring for the cattle and incurring the necessary expense in that connection. The testimony shows that in order to keep a satisfactory record of these expenses, it was determined to keep a special account thereof, and carry that in the name of "Bert Waddell, Special;" and in order to raise an "apparent" fund against which to check, to have Mr. Waddell give notes, with which the account should be credited. This was done, from time to time, some of the notes being taken up as expenses were incurred, and replaced by others, of larger amounts, so as not to have too many notes. The last notes so given are the three notes in suit, one for the principal sum of $ 2000, dated June 16, 1921, due in 90 days from date; one for $ 500, dated July 11, 1921, and one for $ 250, dated July 12, 1921, both due 60 days after date. All were in the regular form of negotiable notes, given to the "Moorcroft Bank," signed "Bert Waddell, Special a/c," and the fact was noted thereon that they were for the expenses of the cattle above mentioned, and for some sheep, also later taken over by the bank in similar manner as the cattle. To the notes was appended the following memorandum:

"The Moorcroft Bank took over a mortgage from Wm. Oelkers covering 350 head of cattle. These cattle were put out for wintering purposes with Al Andrews. He bought hay from W. H. Colquhoun that amounted to about $ 400.00. He bought hay from Adolph Lamb to the amount of about $ 100.00. There has been some other expense on these cattle and the total expense on the cattle will amount to somewhere between $ 500.00 to $ 2000.00.

This account is run in the Moorcroft Bank in the name of Bert Waddell, Special, and all notes that he would sign in favor of the Moorcroft Bank under this account, not exceeding the sum of $ 2000.00, would not be chargeable to his personal account, but to the expense account of the Moorcroft Bank, as the Moorcroft Bank owns the cattle.

This is simply a memorandum of information for all parties concerned.

MOORCROFT BANK.

D. R. Shackleford, S. A. Guthrie, Pres.

Secy."

The limit of $ 2000 here mentioned, so the testimony shows, was exceeded, by reason of the fact that later, as already stated, some sheep had to be taken over by the bank and cared for the same as the cattle and the expenses incurred in that connection were handled in the same account. It is further shown that the State Examiner, through his deputies, was informed of this arrangement and it was approved by him. Some of the cattle were finally shipped, and the remainder sold, and by reason of their depreciation in the meantime, it is doubtful, though the record is not clear, whether any of the proceeds went into the hands of the bank or its receiver. Some money, just how much is not clear, was, however, received from the sheep and paid into the bank or its receiver, and credited to the special account above mentioned. The bank became insolvent in August, 1921, and Thomas Dunn was appointed receiver. He was succeeded in the summer of 1923 by J. E. Ford, who about December, 1924, made a report to the court and in which he listed the notes in suit as part of the assets in his hands. He sold these notes--perhaps among other assets--to L. H. Robinson "for some consideration," according to the stipulation in the record. This was done in the latter part of December, 1925. But before that, respondent made out a written notice as follows:

"Notice

To Receiver for Moorcroft Bank, Moorcroft, Wyo., and To Whom it May Concern:

Please take due notice that notes listed in assets of Moorcroft Bank receivership, totaling a balance of $ 2558.06 signed by Bert Waddel, Special a/c and numbered 7523, 7302 and 7317, and dated June 16, 1921, July 11, 1921 and July 12, 1921 respectively, are not personal obligations of Bert Waddell, but represent a trusteeship and so carried on the books of Moorcroft Bank by the notes themselves and the individual ledger sheets as such trusteeship for the necessary expense incurred by said Moorcroft Bank on a certain herd of cattle turned over by Wm. Oelkers on December 6, 1920, and one certain band of sheep taken over by said Moorcroft Bank from Noah Williams, and one certain band of sheep taken over by said Moorcroft Bank from Albert Andrews, and cared for by said bank during the years 1920 or 1921 or both respectively.

That all personal liability by said Bert Waddell is hereby disclaimed, formally.

Dated this 3rd day of December, A. D. 1925.

Bert Waddell.

Witness: I. M. Guthrie."

And this notice, and the memorandum of February 5, 1921, were appended to the notes in suit when sold. The appellants are assignees of L. H. Robinson. A few additional facts will appear hereafter. The trial court rendered judgment for Waddell, the respondent.

1. Counsel for appellant argue that the evidence of the...