Court Opinion

ID: 6907822
Source: CourtListenerOpinion
Date Created: 2022-07-23 22:03:29.588914+00
Date Added: 2024-06-11T16:06:25.824469
License: Public Domain

McBRIDE, C. J.
There is authority for the proposition that if the bank itself had been the plaintiff, the defense last herein interposed could have been maintained: Agricultural Bank v. Robinson, 24 Me. 274; First Nat. Bank v. Felt, 100 Iowa, 680 (69 N. W. 1057).
It seems, howéver, to be well settled by the great weight of authority that where a bank commissioner or other statutory receiver takes over the assets of an insolvent bank for the purpose of liquidation, such defense is not available and the maker. of a note given, as this one confessedly was, to deceive the bank examiner into a false finding as to the sufficiency of the bank’s assets, is estopped from asserting such defense: State Bank of Pittsburg v. Kirk, 216 Pa. St. 452 (65 Atl. 932); Lyons v. Benney, 230 Pa. St. 117 (79 Atl. 250, 34 L. R. A. (N. S.) 105); Moore v. Kildall, 111 Wash. 504 (191 Pac. 394).
The distinction between that class of cases where the action is brought by a solvent bank and the second class where the action is instituted by a receiver of -an insolvent concern, seems to be that in cases where the solvent bank is the plaintiff both parties *445are equally in fault, and such being the case, the maxim “In pari delicto potior est conditio defendentis” should be applied; while in the latter case, creditors or depositors who are not in pari delicto with the original wrongdoers have a right to say that he who executed his note for the express purpose of perpetrating a fraud should not be heard to assert that fact in order to evade the consequences which his unlawful act has brought upon him.
This rule is in accordance with good morals and sound public policy, and if rigidly enforced by the courts, will do much to prevent the practice indicated in defendant’s answer, a practice all too frequent, as indicated by the authorities cited by counsel.
The defendant in effect says by his answer, “It is true that I signed and delivered the promissory note described in the complaint, but it was without consideration and was made with the intent to increase fictitiously the apparent assets of the bank' and thereby deceive the bank examiner.”
It is urged on behalf of defendant that there is no plea of estoppel in plaintiff’s reply and that as estoppel to be ■ available should be pleaded, the objection of plaintiff cannot be sustained here. But it is also the law that where the matter constituting the estoppel appears on the face of the pleading it is not necessary to urge it by way of a technical plea; and such is the case here.
It' is also contended by counsel for defendant that the complaint should show that the amount of the note in suit is necessary to liquidate the indebtedness of the bank; but there is no logic in that proposition. So to hold would require the plaintiff in this action at law to go into a long accounting before a jury, to marshal the assets and liabilities, *446and to estimate the possibilities or probabilities of collecting claims of doubtful value, and matters of that character. The law does not require plaintiff to do this. The allegation is that the bank is insolvent. The evidence is that when completely liquidated the assets will not pay more than forty-five cents on the dollar. This action bears no relationship to those cases wherein the creditors after exhausting all the assets bring suit to collect unpaid subscriptions to capital stock or to enforce a double liability. It is a plain action on a promissory note, to which the defendant has interposed the unconscionable defense that the paper was given to trick and deceive a public official as to the financial standing of a bank which it was his duty to examine. "With this fact conceded, it was the duty of the defendant to show that there were funds sufficient to meet the demands of innocent creditors without collecting the note here sued upon. It may well be doubted whether he would even be permitted to do this, and the concession of that right is merely an assumption for the purposes of this discussion.
As to the other point upon which the court based its decision, we are of the opinion that it was not well founded. In the course of the testimony it was developed that during the course of business the defendant had large dealings with the bank and had been heavily indebted to it, and from this the jury might have fairly inferred in the absence of explanation that the note in suit was given to cover that indebtedness. It was therefore entirely proper for defendant to explain that the indebtedness so incurred had no connection with the note in suit, but had been discharged by the assignment of certain *447property belonging to defendant, as related in Ms testimony.
Bnt upon the first ground mentioned in the order we are of the opinion that the Circuit Court was clearly justified in granting a new trial, and its ruling is therefore affirmed. Affirmed.