Case Name: FARMERS' STATE BANK OF RIVERTON vs. GENTLE et al. And four other cases
Court: Supreme Court of Wyoming
Jurisdiction: Wyoming
Decision Date: 1926-03-02
Citations: 34 Wyo. 368
Docket Number: Nos. 1193-1197
Parties: FARMERS’ STATE BANK OF RIVERTON vs. GENTLE et al. And four other cases.
Judges: PotteR, C. J., and Kimball, J., concur.
Reporter: Wyoming Reports
Volume: 34
Pages: 368–374

Head Matter:
FARMERS’ STATE BANK OF RIVERTON vs. GENTLE et al. And four other cases.
(Nos. 1193-1197;
March 2, 1926;
243 Pac. 596.)
E. H. Fourt, W. G. Mentzer, H. G. Brome and Joel F. Longenecher, for appellants.
A. C. Allen and O. N. Gibson, for respondent.

Opinion:
Blume, Justice.
The Farmers State Bank of Riverton, as plaintiff, commenced an action against Ray A. Gentle and the Investors Guaranty Corporation, as defendants, on a certain promissory note made by said Ray A. Gentle and endorsed by said Investors Guaranty Corporation. Four other similar suits were commenced, in each of which the said Investors Guaranty Corporation was sought to be held as endorser and in which another, the principal maker of the note, was also made defendant. Judgment was in each case rendered in favor of the bank, against the Investors Guaranty Corporation, as endorser, and against the maker of the note. An appeal was in each case taken by the Investors Guaranty Corporation, and this opinion deals with these appeals. All of the eases have been submitted together and may be disposed of in one opinion.
All of these cases belong to the same series of eases discussed in the case of Farmers State Bank v. Haun, 30 Wyo. 322, 222 Pac. 45, and in the opinion on rehearing in 31 Wyo. 201, 224 Pac. 856, where the general facts governing all of these eases are fully discussed, and it is unnecessary to -do so here. It appears from that ease that the appellant was in control of, and was substantially the sole owner of, respondent bank up to June 9, 1921; that E. H. Luikhart was in charge of the affairs of appellant and at the same time managed the respondent bank; that while he thus occupied a dominant position in both corporations, he made various loans from time to time, sometimes in the name of the bank, sometimes in the name of the appellant, and if in the name of the latter, he frequently transferred the notes evidencing such loans to the bank. In either case the notes generally carried the endorsement, of the appellant, that endorsement being placed thereon by Luikart, appellant's secretary. On June 9, 1921, appellant sold the bank to Oscar Nicholson. A schedule B was attached to the contract evidencing the sale, pursuant to which appellant guaranteed certain notes enumerated therein. The Haun case, supra, involved and discussed not only the notes included in said schedule B, but also other notes held by respondent bank and endorsed by appellant, but not included in said schedule. We held in the Haun ease that appellant was responsible on the notes included in said schedule B. The notes in four of the cases at bar, namely those in which Gentle, Johnson, Dugan and Crescent C Cattle Company were co-defendants with appellant, are all included therein. There are no facts in these cases that would differentiate the notes involved therein from the other notes included in schedule B, discussed in the Haun case, and .the judgments in these cases must accordingly be affirmed.
The note involved in the remaining ease, in which the Arapahoe Baneh Company is a party, is one of the notes that arose out of the same series of transactions that governed the notes discussed in the Haun case, other than those included in schedule B. It is similar in character to the Waltz and Ckisam notes mentioned in the Haun ease. We held in connection with these and other similar notes that where a man occupies a dominant position in two corporations, as did Luikart here, he must be fair to both corporations; that he could not make a loan from the funds of the bank, which was really for appellant's benefit, unless such loan was amply secured; that in case he, as manager of the bank, made such loan from the funds of the bank to a party, to whom he was authorized to make-a loan as manager of appellant, his authority to endorse or guarantee its payment on behalf of appellant might be inferred under the evidence in the ease; and that the real question on which the appellant's responsibility depended was: For whose benefit was the loan really made ?
All of the general evidence relating to the Waltz and Chisam notes above mentioned is applicable to the Arapahoe Ranch Company note. The special facts that relate to the latter note are about as follows: The note in suit, dated January 30, 1922, due in ninety days thereafter, was given to Oscar Nicholson for the benefit of the bank, and is endorsed on behalf of appellant by H. W. Kingery, as president, and Oscar Rohlff, as secretary, who were also respectively the president and secretary of the Arapahoe Ranch Company. The note was given in renewal of two other notes of $3500 and $1500 respectively, given in October, 1921, the former of which was endorsed on behalf of appellant by IT. W. Kingery, as president. These two notes in turn were renewals of other notes given previously, the indebtedness on the $3500 note originating in 1919, and that on the $1500 note in January, 1921. The $3500 note was first endorsed on behalf of appellant by E. H. Luikart, on December 29,1920, when a renewal of the note was executed, and which was previous to the time that the bank was sold to Nicholson. The $1500 note was never endorsed.
The evidence shows that in 1919 a two-thirds interest in the Arapahoe ranch was owned by appellant. Somewhat later the Arapahoe Ranch Company was organized to take over this ranch and two-thirds of the capital stock in that company was owned by and issued to, appellant. Luikart testified that appellant managed and financed this ranch in the same manner as it did a number of other ranches in 'which appellant was interested. It is apparent, therefore, that, as in the ease of the Waltz and Chisam notes above mentioned, the court was authorized to find, as it evidently did, that the loans to the Arapahoe Ranch Company were really made by, and for the benefit of, appellant, and that appellant's endorsement on the note of $3500 made on December 29, 1920, should be held to have been duly authorized. The liability thereon, accordingly, became fixed, at least as of that time, and the endorsements on the renewals of this indebtedness simply continued in force a liability already existing, and must be held binding on appellant.
The only question remaining, accordingly, is as to the indebtedness represented by the $1500 note, which was never endorsed by appellant until the amount thereof was included in the note of $5,000 sued on herein. It is claimed that there is no consideration for the endorsement. But that claim cannot be sustained. The note granted an extension of time for the payment of the indebtedness evidenced thereby. And the benefit from such extension did not merely accrue to the maker of the note, but accrued to the appellant as well, owning as it did two-thirds of the stock of the Arapahoe Ranch Company. Such extension of time for payment was a sufficient consideration for the endorsement on the note. The claim is further made that there was no authority for the execution of the endorsement. We have not been able to find any direct testimony to the effect that no such authority existed. Under the by-laws of appellant, the president and secretary were the proper parties to make the endorsement, and it is executed in the usual manner in which such endorsements are executed on behalf of a corporation. Kingery, in fact alone, had, as shown by the record, made endorsements on other notes for the benefit of the bank, and he appears to have been the man who, at that time, attended to, and acted for and in behalf of the appellant in, all matters in which appellant was interested. The trial court, as stated before, evidently held that the loan was originally made for appellant's benefit, and we think the evidence in the case was sufficient to justify that holding. Fhrther, appellant was interested in the extension granted to the Arapahoe Ranch Company at the time when the note in suit was executed, and we accordingly think, that in the absence, at least of direct testimony to the contrary, we should infer from the circumstances shown in the case, that the president and secretary of appellant were authorized to execute the endorsement of appellant and that it is binding upon it as to the indebtedness previously represented by the $1500 note, as well as the indebtedness previously represented by the $3500 note. 10 Cyc. 1003, 14a C. J. 394, 395.
The judgments in all 'of the cases must, accordingly, be affirmed. It is so ordered.
Affirmed.
PotteR, C. J., and Kimball, J., concur.