Opinion ID: 1331729
Heading Depth: 1
Heading Rank: 1

Heading: community bank and trust

Text: The action involving the appellee, Community Bank and Trust (hereinafter Community Bank), is before this Court upon the petition of the appellants, Charles Keyser, Willene Keyser and Hamilton Electronics Corporation, for an appeal from the final order of the Circuit Court of Marion County, West Virginia. By order entered October 12, 1978, upon a jury verdict, Community Bank recovered $22,104.94, plus interest and costs from the appellants. This recovery was based upon the default of the appellants upon a $50,000 loan. The appellants failed in circuit court to recover upon their theory of usury. [1] During the period in question, the appellant, Charles Keyser (hereinafter Keyser), was the president and sole stockholder of Hamilton Electronics Corporation (hereinafter Hamilton Electronics). Charles Keyser and the appellant, Willene Keyser, are husband and wife. Hamilton Electronics, a West Virginia corporation located in Marion County, West Virginia, was engaged in the business of making glass parts for electronic and electrical components. On May 27, 1971, Keyser met with William McLaughlin, an officer of Community Bank, and discussed a loan transaction to raise funds for Hamilton Electronics. Subsequently, by money order dated June 7, 1971, Community Bank loaned $50,000 to Keyser. That money order was made payable to C. M. Keyser. The record indicates that Keyser applied for the loan as an individual. In return for the loan, the appellants, Charles Keyser, Willene Keyser and Hamilton Electronics, executed a note dated June 7, 1971, whereby the appellants jointly and severally promised to pay the $50,000 with interest at 7½ per cent per annum. The note was to be paid in installments on a monthly basis over a ten year period. The collateral for the loan was described upon the note as follows: Community Bank and Trust. N.A. Passbook Savings Account and $100,000 Hamilton Electronics Corporation, 10% convertible debentures due June 15, 1981. With respect to the collateral for the loan, the record indicates that the $100,000 Hamilton Electronics convertible debentures placed with the bank were owned by Keyser. On the other hand, the savings account opened at Community Bank as collateral for the loan was in the name of Hamilton Electronics and initiated by a $25,000 deposit made by Hamilton Electronics by check dated June 7, 1971. During the period in question, that savings account earned 4½ to 5 per cent interest. The record indicates that Community Bank kept the passbook to the savings account. Withdrawals could not be made from the savings account without the consent of the bank. Until the time of default, payments on the note were made by Hamilton Electronics. [2] Subsequently, Community Bank applied the funds in the savings account to the unpaid balance of the loan. On November 22, 1977, Community Bank instituted an action in the Circuit Court of Marion County against Charles Keyser, Willene Keyser and Hamilton Electronics for the unpaid balance of the $50,000 loan. The appellants filed a counterclaim against the bank asserting that the loan was usurious. The circuit court, upon a determination that West Virginia law barred a corporation from asserting the defense of usury, dismissed the counterclaim of Hamilton Electronics. Moreover, the circuit court by order entered January 23, 1978, held that pursuant to federal law Charles Keyser and Willene Keyser were limited in their recovery, if any, against the bank to two times the interest actually paid by them upon the loan. Trial began in the circuit court on October 10, 1978, and the action of Community Bank and the usury counterclaim of Charles Keyser and Willene Keyser were submitted to the jury. As reflected in the final order of the circuit court entered October 12, 1978, the jury found against the Keysers upon the counterclaim and found in favor of Community Bank in the amount of $22,104.94.