Williams v. The Ravanna Bank

• Decision Date: 08 November 1926
• Citation: 289 S.W. 34,221 Mo.App. 887
• Parties: IRA WILLIAMS, APPELLANT, v. THE RAVANNA BANK ET AL., RESPONDENT. [*]
• Court: Kansas Court of Appeals

289 S.W. 34

221 Mo.App. 887

IRA WILLIAMS, APPELLANT, v. THE RAVANNA BANK ET AL., RESPONDENT. ^[*]

Court of Appeals of Missouri, Kansas City

November 8, 1926

Appeal from the Circuit Court of Mercer County--Hon. L. B. Woods Judge.

Judgment affirmed.

Thompson & Thompson, Roger Miller and Scott J. Miller for appellant.

Hyde & Hyde, and Ed. C. Hyde for respondents.

BLAND J. Arnold, J., concurs. Trimble, P. J., absent.

OPINION

BLAND J.

This is an action based upon alleged fraudulent representations made by the defendant, John R. Weaver, cashier of defendant bank, concerning the solvency of one Charles Weaver. At the conclusion of all the testimony the court at the defendants' request instructed the jury to find for them resulting in a verdict as directed, and plaintiff has appealed.

The facts show that about May 7, 1923, defendant Weaver solicited plaintiff to buy some of the notes held by the bank. The bank held a note of one Charles Weaver, uncle of the cashier, in the sum of $ 2000. The cashier persuaded plaintiff to buy one-half of this loan by having said Charles Weaver, who consented to the new arrangement, execute a note in the sum of $ 1000. The space for the name of the payee in the latter note was left in blank, the name of plaintiff's daughter being inserted afterwards as payee by the cashier at plaintiff's request. The $ 1000 thus obtained from plaintiff was credited by the cashier upon the $ 2000 note of Charles Weaver. While plaintiff's check was made out to Charles Weaver, the latter did not see the check but his name was endorsed on it by the cashier without express authority of Charles Weaver but, apparently, by his implied authority.

When the cashier, who had been the only active officer of the bank in carrying on its affairs, solicited plaintiff to buy some of the bank's notes, he told plaintiff that the "deposits at the bank were running low" and it would help out the bank if he would buy some of the bank's notes or lend the money to the bank. Plaintiff told him that he would take $ 1000 of the notes. The cashier then suggested that he take the note of Charles Weaver for $ 1000, stating that if he would take such a note the bank would "take it up again when it was due." Plaintiff had no conversation with Charles Weaver but the cashier told him that Weaver's note was a good one and he relied upon this statement in lending the money. Plaintiff testified that he was not lending money at that time but finally concluded to make this loan upon the cashier's urgent request. He testified, "I concluded that I would just let the bank have that one thousand dollars," that the cashier said that the bank would "take it up when their deposits ran up or when it was due if I wanted to." After plaintiff parted with his money he found that Charles Weaver was insolvent. The note was made payable six months after date. Plaintiff prior to the time the note fell due asked the bank to pay it when it became due. He did not ask Charles Weaver to pay it until sometime during the following January when said Weaver paid the interest on the note. About the time the note was due plaintiff asked the cashier to take it up but the latter said he couldn't do it at that time, stating that the bank's "exchange wasn't up enough."

The cashier, testifying for defendants, denied making the representations claimed by plaintiff. He stated that he had authority from the board of directors "to make time deposits or loan money" and to give notes of the bank for money borrowed.

The petition was in two counts but plaintiff dismissed the first and the case went to trial on the second, which alleges that--

". . . on May 7, 1923, the defendant, John R. Weaver, who at the time was cashier of the Ravanna Bank in Mercer county, Missouri, solicited the plaintiff to loan the sum of one thousand dollars to Charles Weaver and stated to the plaintiff that Charles Weaver was indebted to the bank in the sum of two thousand dollars and could not raise the money, but was perfectly good; and that the bank was hard pressed for money and that the payment of one thousand dollars of Charles Weaver's indebtedness to the bank, would help the bank in reducing its loans and that the defendant, the Ravanna Bank, of which defendant, John R. Weaver, was the executive officer and cashier, would take up said note at its maturity, if the said Charles Weaver failed to pay the same.

"And defendant further stated to the plaintiff that Charles Weaver was their customer and that he knew the financial condition of said Charles Weaver and that the said Charles Weaver was perfectly good and solvent.

"And plaintiff states that the defendant, John R. Weaver, executive officer of the Ravanna Bank, knew at the time he made the statement to this plaintiff, that Charles Weaver was financially insolvent and largely in debt and was being hard pressed by his creditors, and was wholly unable to meet his obligations.

"And plaintiff charges the facts to be that the defendant falsely and fraudulently represented to this plaintiff that Charles Weaver was then solvent and plaintiff states that at the time the statement was made by the executive officer of said bank, he knew that Charles Weaver was insolvent and being hard pressed by his creditors and that he was unable to pay his obligations and made the false statement knowingly and unlawfully for the purpose of obtaining plaintiff's money in the sum of one thousand dollars, to avoid the bank losing all of the obligations of the said Charles Weaver to the said Ravanna Bank."

The petition then alleges that plaintiff had no knowledge of the financial condition of Charles Weaver but relied upon the statements made to him by the cashier of the bank; that plaintiff had parted with his one thousand dollars which had resulted in a credit of that amount upon the $ 2000 note of Charles Weaver; that the $ 2000 note at the times mentioned was of no value and that he demanded payment of his $ 1000 of the bank and from the defendant John R. Weaver, which payment had been refused.

It is urged that the court properly sustained the demurrer to the evidence for the reason that the representations alleged in the petition to have been made were not made in writing and therefore came within the provisions of the Statute of Frauds, section 2172, Revised Statutes 1919, which reads as follows:

"No action shall be brought to charge any person upon or by reason of any representation or assurance made concerning the character, conduct, credit, ability, trade or dealings of any other person, unless such representation or assurance be made in writing, and subscribed by the party to be charged thereby, or by some person thereunto by him lawfully authorized."

This statute has been held to be complete bar to a suit for damages for false representations made to plaintiff that the party to whom the money was lent by plaintiff was solvent and of good credit. [Knight v. Rawlings, 205 Mo. 412, 104 S.W. 38; Weil v. Schwartz, 21 Mo.App. 372, 385.] However, it would seem that the representations herein were made for the purpose of procuring a benefit for the defendant bank but defendants claim that this is of no consequence, citing the case of Mann v. Blanchard (Mass.), 2 Allen 386, and cases of similar import. In that case it was said, l. c. 387, 388--

". . . Where the benefit to be obtained by the defendant is to be gained wholly through the credit given to another in consequence of the alleged representations, the primary object of those representations must be regarded as the procurement of the credit." [See, also, Cook v. Churchman (Ind.), 3 N.E. 759; Kimball v. Comstock (Mass.), 14 Gray 508; Hunter v. Randall (Me.), 16 Am. Rep. 490; Brown v. Kimball, 84 Me. 280, 24 A. 847.]

However the benefit to the bank was not obtained solely as the result of the transaction but was gained directly through the contract itself and a very interesting question arises as to whether this would not make the case an exception to the general rule stated in the authorities cited, supra (see Ruddy v. Gunby, 180 S.W. 1043, 1045), provided that the contract pleaded in the petition wherein it was agreed that the bank would pay the one thousand dollars if Charles Weaver did not, in view of its being hard pressed for money, is not itself within the Statute of Frauds, section 2169, Revised Statutes 1919. If it was, then it could not have been relied upon by plaintiff as he is presumed to have known the law to the effect that an oral promise to pay the debt of another is worth nothing and he could have given no credit to the bank on account of such a promise and therefore the assertion of the cashier that the bank would pay the note if Charles Weaver failed to do so, could be considered in no other light than a statement on the part...