Holland Banking Co. v. Griggs

ATWOOD, P. J. This is an appeal from a judgment for plaintiff on a promissory note executed and delivered by appellants to the Holland Banking Company in the principal sum of $35,000, dated October 9, 1923, due ninety days after date, and bearing interest from *292 date at the rate of seven per cent per annum, to be compounded if not paid annually, and further providing for a ten per cent attorney fee if unpaid at maturity and placed in the hands of an attorney for collection. Plaintiff’s amended petition alleged that on July 15, 1924, the sum of ten thousand dollars was paid on this note; that on August 11, 1924, the further sum of two thousand dollars was paid, both payments being duly credited thereon; that the remainder was past due and unpaid, and that it had become necessary to place said note in the hands of an attorney for collection. Defendants went to trial on their second- amended answer, which admitted the execution and delivery of the note and certain formal allegations, but denied each and every other allegation in" plaintiff’s petition, and further answering alleged' duress in the execution and delivery of said note, agreement that the makers were not to be held personally liable thereon, and lack of consideration. At the close of all the evidence the trial court directed the jury to return a verdict in favor of plaintiff for $27,327.61, debt, and $2732.76, attorneys fee. Appellants’ assignments of error are that the court erred in refusing defendants’ offer tending to show an agreement that they were not to be held, personally liable on the note, that the court erred in giving the peremptory instruction to find for plaintiff, and in refusing to sustain defendants’ motion for a new trial. The only matters presented in appellants’ points and authorities and printed brief and argument are duress in the execution and delivery of the note, and the trial court’s refusal of tender of proof to show agreement that defendants were not to be held personally liable. Summarizing the evidence most favorable to the contentions of appellants’ we find that in April, 19'23, the seven defendants who appeared here as appellants constituted the board of directors of the Dade County Bank of Greenfield, Missouri; that examiners Charles W. Moody and Leon Clippard, representing the banking department of the State of Missouri, examined this bank shortly prior to April 9, 1923, and found a shortage amounting to about $35,000 chiefly on account of missing bonds and bad notes, and sufficient to wipe out the entire surplus of the bank and impair the capital stock to the extent of about $10,000; that on the evening of April 9'th they called a meeting of the board of directors at the bank, all members attending, and apprised them of the nature and extent of the shortage and further told them that the questionable loans were not made by them and that the bond shortage occurred under the management of their predecessors, but that the impaired capital stock and surplus would have to be restored or the bank would be closed, immediately; that they threatened to send the directors to the penitentiary if they failed to make up the shortage at once; that they suggested that the Holland Banking Company, which already held a $15,000 loan against *293 Dade County Bank, would lend the needed $35,000; that the Dade County Bank “would pay off the note and that the directors would not be personally liable; that at this meeting they required' each of the directors to sign a personal note on a Dade County Bank form for $35,000, give a written statement of his financial worth, and also sign a bond for $200,000 to indemnify the bank depositors against loss; that three of the■ directors were selected to take this note and these financial statements to the Holland Banking Company the next day and solicit the $35,000 loan; that these three directors went to Springfield the next day, the two bank examiners preceding them in a separate ear; that appellants James N. Snadon and Lee Rountree met the two bank examiners at the Holland Bank and they all conferred with Mr. E. L. Sanford, who was then president of the Holland Banking Company, with regard to procuring the $35,000 loan. Mr. Snadon testified that Mr. Rountree did most of the talking to Mr. Sanford at this conference, that “he went ahead and told him the bank was short and we was facing the penitentiary, we didn’t want to borrow this money, then we went ahead and told him we was borrowing the money and the surplus earnings of the bank would pay this note, we didn’t expect to pay this note ourselves, it was a bank obligation.” When pressed for what else was said he replied: “Well, the most'of our conversation I think was just talking about the business in regard to the bank, and he said we could get the money if we could get things shaped up, he said it would pay things off, he said the bank would pay things off, for us not to get scared. ... I told Mr. Sanford in talking that the bank examiners was down there and found the bank short, and they was trying to help us get some money, and if we didn’t get the money they said the penitentiary was facing us, and we talked on about wanting to get the money which would help us out.” Lee Rountree also testified as to what was there said to Mr. Sanford as follows: “I told everything that had happened in the bank at Greenfield the night before the best I could. I told him that the note we had signed there the night before had our signatures on it personally, but did not have the bank’s signature on it, and Mr. Moody had agreed with us that the surplus of the bank and the earnings would take care of the interest, and if we had enough, it would pay this $35,000. . . . We told him we had to borrow $35,000, we had to get this money, those fellows would send us to the penitentiary if we didn’t get this money and make up that shortage, we had to get the money, we talked the situation over and he said we could get the money.” This witness also testified that Mr. Sanford accepted the note which the directors had signed the night before, but stated that he would rather have a note on one of his own *294 blanks and asked them to take a note back made out in this way and have it signed; that Mr. Sanford held this note until the one he required got back; that all the directors renewed this note in July and again in October of the same year; that the directors made no inquiry about their criminal liability before they signed these renewal notes; that the Metals & Mechanics National Bank of New York owned the note here sued on at the time the makers paid $10, 000 and $2,000 thereon; that Mr. Sanford had previously told them that he had sold the note to this bank, and that up until the time they were sued by the Holland Bank they thought this note belonged to the Metals & Mechanics Bank and could be paid according to their agreement with Mr. Young who represented the latter bank. The evidence further shows that the Dade County Bank finally closed in January, 1924, and a new bank was organized; that some of the directors took part of the paper of the old bank and out of collections made thereon the above-mentioned two thousand dollars payment • was made on the note, the ten thousand dollar payment being made by the directors personally. The record fails to show any evidence of any threat made by anyone to send any of the directors to the penitentiary except at the directors’ meeting on the night of April 9th when the note was executed which did not prove acceptable to the Holland Banking Company. Appellant James N. Snadon testified that he did not know of any threats at any other time. When Mr. Sanford finally agreed to make the loan he required that a new note be executed and the request was promptly complied with. The record does show that the note upon the strength of which the loan was originally made was not the one signed at the directors’ meeting on the night of April 9th when the directors were alleged to have been under duress; that long after that time the note required by the Holland Bank and upon which the loan was actually made was twice renewed, and nearly a year after the date of the last renewal, which is the note here sued upon, two payments were made thereon, all without the slightest evidence of duress or coercion. Even if at the meeting on the night of April 9th the directors executed the note because of duress induced by threats or promises of any kind or under an agreement that they would not be personally liable on the note, which both bank examiners positively denied and which seems highly improbable on the face of the whole record, yet the record presents no evidence that any representative of the Holland Banking Company ever threatened any of these directors, or was ever apprised of the exercise of any such duress or coercion, or knew of the existence of any such state of mind on the part of said directors, or ever agreed with them or any of them that they would not be held personally liable on the note which they individually signed. The trial court *295 properly refused defendants’ offer of oral testimony tending to vary the terms of this written instrument, and committed no error in giving the peremptory instruction at the close of all the evidence to find for plaintiff as therein specified. While the defense of lack of consideration may be treated as waived because of appellants’ failure to urge it here, the record discloses that this alleged defense was likewise not supported by the evidence. It clearly appeared that the $35,000 was borrowed by these directors and stockholders to keep the bank open, and that it was placed to the credit of and used by the bank. The note not only imported consideration (Lindell v. Rokes, 60 Mo. 249), but given under such circumstances it is in fact supported by a valuable consideration. [First National Bank v. Henry, 202 S. W. 281; and People’s Bank v. Hunter, 216 Mo. App. 334.] Counsel for respondent ask that we affirm the judgment and; award the statutory damages provided in Section 1515, Revised Statutes 1919. The record does not convince us that the appeal was frivolous or not taken in good faith, and sy.ch damages will not be awarded. No reversible error appearing, the judgment is affirmed. All concur.