Whitman Realty & Inv. Co. v. Day

• Decision Date: 25 February 1931
• Docket Number: 22607.
• Citation: 161 Wash. 72,296 P. 171
• Court: Washington Supreme Court
• Parties: WHITMAN REALTY & INVESTMENT CO. v. DAY.

296 P. 171

161 Wash. 72

WHITMAN REALTY & INVESTMENT CO. v. DAY.

No. 22607.

Supreme Court of Washington

February 25, 1931

Department 2.

Appeal from Superior Court, Spokane County; R. M. Webster, Judge.

Suit by the Whitman Realty & Investment Company against J. W. Day. Judgment for plaintiff, and defendant appeals.

Affirmed.

R. L. Campbell, of Spokane, for appellant.

Glen E Cunningham, of Spokane, and Hanna, Hanna & Wilkinson, of Colfax, for respondent.

BEELER J.

Plaintiff brought this suit to recover the balance due on a promissory note dated May 2, 1924, executed and delivered by the defendant, Day, payable six months after date to the order of the Farmers' National Bank of Colfax, which, after maturity and for a valuable consideration, it indorsed and delivered to plaintiff. The complaint is in the usual form. Defendant in his answer admitted the execution and delivery of the note, and set up three affirmative defenses: Fraud and duress, want of consideration, and a collateral oral contemporaneous agreement. Plaintiff in its reply denied all affirmative allegations. The cause was tried to the court and jury, and at the conclusion of the introduction of testimony plaintiff challenged its legal sufficiency to sustain the affirmative defenses, which motion the court sustained. Thereafter defendant moved for a new trial, which was denied, and judgment entered in favor of the plaintiff. The defendant has appealed.

Inasmuch as the trial court withdrew the case from the jury, only those facts will be stated which are supported by appellant's evidence. No reference will be made to the evidence offered by respondent.

Appellant was one of the organizers and a stockholder of the Farmers' National Bank of Colfax, capitalized at $100,000, divided into 1,000 shares of the par value of $100 each, of which appellant owned 40 shares. For many years he was personally acquainted with Mr. Miller, the bank's vice president, and was quite familiar with the affairs of the bank. Appellant had been engaged in business in Colfax for about 18 years, and thereafter moved to Spokane, where he engaged in business for approximately 24 years immediately prior to the time this suit was brought. Previous to April 4, 1923, the state supervisor of banking discovered that the bank had approximately $45,000 of assets consisting of collection notes of very doubtful value, and demanded of the bank officials that these notes be charged off its books and be replaced by liquid assets. Shortly thereafter Mr. Miller interviewed appellant at Spokane and advised him of the action taken by the bank examiner informing him that an assessment of 45 per cent. had been levied against all stock of the bank in order to raise $45,000, the amount necessary to replace the questionable paper, and further informed him that an assessment of $1,800 had been levied against his stock, and demanded payment thereof. At first appellant refused, stating he was without funds, and, inasmuch as he had received no notice of any stockholders' meeting at which an assessment was authorized, the assessment was illegal. Thereupon Mr. Miller requested him to execute his note for the sum of $1,800 representing that it would be renewed from time to time, and that payment thereof would never be demanded, as the note could be paid from dividends to be declared on his stock and from the sale of the impaired securities, and, if the money raised from those two sources proved insufficient, the officers' salaries would be raised and a portion diverted to the payment thereof until the note was fully liquidated, and, relying on these representations, appellant agreed to sign his note in the sum of $1,800. Apparently no note was available at that moment, and several weeks later, April 4, 1923, appellant was again interviewed at Spokane by Mr. Camp, cashier of the bank who presented him with a note for his signature, which he refused to sign, stating that he had changed his mind. Thereupon Mr. Camp stated to appellant that, if he refused to sign the note, a sufficient amount of his stock would be canceled on the books of the bank and sold and the proceeds applied in payment of the assessment levied against his stock, and, believing that this threat might be carried out by the bank's officers, appellant executed and delivered his note to the cashier on April 4, 1923. Six months later, October 3, 1923, that note was canceled, and on the same day a renewal note in like amount, payable six months after date, was executed, together with a note for $71.18 in payment of the accrued interest on the initial note of April 4, 1923. On May 2, 1924, the October note for $1,800 was canceled and the note in suit executed. Furthermore, the following amounts received from the sale of impaired securities and from dividends declared on his bank stock were credited on appellant's note: March 10, 1926, $81; January 20, 1927, $40; December 15, 1927, $600. On January 24, and again on March 21, 1924, appellant learned that the officers of the bank at, no time had levied an assessment against his stock, nor against any of the stock held by the several stockholders, but that the stockholders among themselves had agreed to a voluntary assessment.

At the conclusion of the introduction of testimony the court withdrew the case from the consideration of the jury and entered judgment for respondent. This is assigned as error. Appellant urges that the question whether he executed and delivered the initial note of April 4, 1923 under duress and fraud, was one of fact and should have been submitted to the jury for determination. We find no merit in this contention for several reasons. Approximately thirteen months elapsed from the time he executed the initial note, which he maintains he was induced to sign by reason of fraud and duress, to the time he executed the note sued on, and during that interim the initial note was canceled and the first renewal note as well as the interest note were...