Continental National Bank v. Doyle

NOURSE, J.

Plaintiff sued on a promissory note executed by defendant and delivered to the bank in payment of defendant’s

pro rata

of a subscription agreement whereby defendant undertook to pay to trustees named therein a sum equal to the face of the note. The agreement was drawn at the instance of stockholders of the plaintiff bank, of which defendant was one, for the purpose of enabling the trustees to purchase from the bank certain collateral which the bank examiner had directed the bank to dispose of. A voluntary subscription was agreed to in order to avoid an involuntary assessment by the bank upon its stock

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holders. Among other things, the subscribers, agreed to pay to the trustees therein named thirty dollars per share on the stock owned by each for the purpose of enabling said trustees to purchase the assets and securities from said bank. The trustees were also authorized to collect said asséts and securities as rapidly as possible and reimburse the subscribers for the sums advanced by them for the purpose of said purchase. The money was to be immediately refunded unless the holders of at least two thousand five hundred shares paid said amounts within ten days from the date of the agreement, which was the fifth day of December, 1918. Two thousand five hundred and three shares subscribed to the agreement and the subscriptions were paid in cash, checks or notes. The cash and checks were thereupon turned over to the trustees and the notes were taken up by the bank, which in turn credited the trustees therefor as so much cash and accepted them at their face value. Upon the full credit thus given to the trustees the assets and securities were delivered to them by the bank according to the arrangement made with the subscribers. Defendant was one of those who gave his note in payment of his subscription. The bank assumed the note, the trustees gave him credit for payment of his subscription in full, and the bank collected from him three regular interest payments in accordance with the terms of the note. This note was dated January 3, 1919, which was some nineteen days after the expiration of the time set in the contract for the payment of the subscriptions. It is admitted that two thousand five hundred shares had not paid in cash within the ten days from the date of the agreement, but it is not disputed that at some time more than that number had paid in the manner herein outlined and that the bank had actually transferred the assets and securities to the trustees, who held them for the benefit of the subscribers. From the fact that the defendant executed and delivered his note some time after the expiration of the period set in the subscription contract, it is argued that he waived that condition. In this connection it is argued that at the time of the execution and delivery of the note defendant was fully informed of all the circumstances and knew that his note was being taken in lieu of a cash payment to the trustees, that the bank was giving him full credit therefor, and