Missouri Court of Appeals, 1898

First National Bank v. Gregg

First National Bank v. Gregg
Missouri Court of Appeals · Decided April 29, 1898 · Biggs
74 Mo. App. 639; 1898 Mo. App. LEXIS 365

First National Bank v. Gregg

Opinion of the Court

Biggs, J.

— This is an action on a promissory note for $2,000, dated May 26, 1896, due six months after *642date and signed by the defendant and one E. B. Vaughan.

0 The defendant admitted the execution of the note. His defense was that the note was given in consideration of an agreement on the part of the officers of the plaintiff to compound a felony. At the close of the evidence the circuit court directed the jury to return a verdict for the plaintiff, which was done, and judgment entered accordingly. The defendant bas appealed. Concerning the defense attempted to be made the evidence of defendant tended to prove these facts: On the twenty-sixth day of November, 1895, Vaughan forged the name of the defendant to a note for $2,000.

The note was given for money borrowed by Vaughan from the plaintiff.. The note matured on May 26, 1896, and Vaughan failed to pay it; The defendant was not advised of the existence of the note until about the first of June, 1896. Thereafter, about the twentieth of June, Vaughan wrote to him to come to Mexico. The defendant came in obedience to the request and he and Vaughan talked about the note, ánd during their conversation Vaughan informed the defendant that on the twentieth of May he had executed and put upon record a mortgage upon certain personal property to secure the defendant against any liability on the forged note. This was the first information that the defendant had of the mortgage. Thereupon the defendant and Vaughan had a ■'conference with the cashier of the plaintiff, and the defendant informed the cashier that his (defendent’s) name had been forged to the note, and that he would not pay it; that the cashier then told the defendant that the property which Vaughn had conveyed in the chattel mortgage, together with what would be realized from the assigned estate of Vaughan, would pay the note; that the defendant would run no risk in assuming the debt; *643that if he did not do so Vaughan (who was a relative of defendant’s wife) would be prosecuted for forgery, and that in order to protect Vaughan from prosecution the defendant did assume the debt and then and there executed the note in suit, which was dated as of May 26, the date of maturity of the forged note. The evidence also tended to prove that the old note was assigned to the defendant; that he had it allowed against the assigned estate of Vaughan; that he collected dividends thereon from the assignee, and that he sold the property included in the chattel mortgage. It appeared, however, that the amounts thus received by defendant were paid to plaintiff and were entered as credits on the note here sued on.

evidence. Under the foregoing testimony we are of the opinion that the circuit court committed error in directing a verdict for the plaintiff. We concede that the facts and circumstances strongly support the statements of the cashier to the effect that he made no threats to prosecute Vaughan and that the object of the defendant in executing the new note was to secure an extension of the old debt which he had previously assumed. But the evidence of the defendant justifies contrary legal inferences, that is that he had no knowledge of the forgery until June 1; that heohad no knowledge of the mortgage until June 20, the day he had the conference with plaintiff’s cashier; that previous to this conference he had not either directly or inferentially, ratified the unauthorized use of his name; that he stated to the cashier that his name‘had been forge(^ and that he denied liability on the note; that his agreement to assume the debt was simultaneous with the execution of the new note and was evidenced by it, and that he was induced to go into the arrangement in order to save Vaughan from a criminal prosecution. This view of the testimony *644disposes of the main argument of counsel for respondent to the effect that the alleged promise of the cashier not to prosecute Vaughan could not have formed any consideration or inducement for the execution of the new note, since all of the evidence tended to show that prior to the conference between defendant and the cashier, the former had accepted the security afforded him by the chattel mortgage, thereby ratifying the act of Vaughan in signing his name to the first note, and that therefore in executing the new note he simply provided for the extension of his own debt.

Cfdo°y;Ni:* I 2ie|af contract. If the promise of the cashier not to prosecute Vaughan formed the consideration, either in whole or in part of the note in suit, then the eon-tract is illegal, and it can not be enforced . under any circumstances, and it is incapable of ratification. Bick v. Seal, 45 Mo. App. 480. Hence the contention that by accepting the benefits of the assignment and selling the mortgaged property the defendant ratified the contract, or that he is estopped from insisting on the illegality, can not be sustained.

With the concurrence of the other judges, the judgment of the circuit court will be reversed and the cause remanded. It is so ordered.

Case-law data current through December 31, 2025. Source: CourtListener bulk data.