Deibel v. Jefferson Bank.

the bank's paper, upon condition that the directors contribute $20,000 to the assets of the bank, was a valuable consideration for such payment. Marks v. Bank of Missouri, 8 Mo. 316; Houck v. Frisbe, 66 Mo. App. 16; Brownlee v. Wollard, 66 Mo. App. 642; Forbes v. Railroad, 107 Mo. App. 674; Gesen v. Higham, 161 Mo. 333. (4) The test of defendant's liability to plaintiff under an implied promise to repay must be measured by the condition existing April 28, 1909, when the money was contributed. If, at that time, equity and good conscience demanded that it be repaid, it then constituted a liability, immediately due and payable. (5) Directors of a corporation can only bind it by resolutions adopted by vote in meeting assembled. 3 Cook on Corp. (7 Ed.), pp. 2435-6; Brinkehoff Zinc Co. v. Boyd, 192 Mo. 613; Charleville v. Washington Trust Co., 226 F. R. 400. The record is barren of all evidence that the bank borrowed the money from plaintiff. Informal conversations of the directors amongst themselves, not crystalized into a vote, cannot bind the corporation. (6) The most favorable theory of plaintiff's case is, that the directors informally discussed amongst themselves the probability of the money being returned to them, and that it would be repaid as soon as the bank "made the money," or "got in a position to do it," but no resolution to that effect was ever adopted; furthermore, the evidence is, that, had the bank at any time between April, 1909, and the date when suit was filed, repaid the money, it would have been in as bad or in a worse condition than when the money was contributed. (7) If the legal effect of the transaction of April 28th was as now contended by plaintiff, it was a farce, operated as a fraud on the Clearing House Association, and the statements submitted to the State Bank Commission sworn to by the plaintiff, and the statements published over his signature in the public press, were false and intended to deceive; on the faith of these published statements he was able to sell his stock to an unsuspecting public, and it does not lie in his mouth to invoke the doctrine of "equity and

200 M. A.-35

good conscience."

Deibel v. Jefferson Bank.

Gate City National Bk. v. Miners & Farmers Bk., 259 Mo. 551, 1. c. 574-56; Third National Bk. v. Reichert, 101 Mo. App. 252. (8) A payment made, under pressure, unless the demand for such payment was illegal, unjust or fraudulent, does not constitute duress. 9 Cyc. 450; 14 Cyc. 1123; Miller v. Davis Estate, 122 Pac. 793; Kansas City Ry. Co. v. Graham, 145 S. W. 632; Buchanan v. Sahlein, 9 Mo. App. 552; Wolff v. Marshal, 52 Mo. 171; Trust Co. v. Bank, 154 Mo. App. 89, 1. c. 106; Knusden Fruit Co. v. Chicago Ry. Co., 149 F. R. 973; Wood v. Telephone Co., 223 Mo. 537, 557-8-9; Link v. Real Estate Co., 182 Mo. App. 531-6; Mee v. Town of Montclair, 86 At. 261; Newburyport Water Co. v. City, 103 Fed. Rep. 594. (9) Durress must be exerted by him who receives the benefit of the transaction, in order that the same may be avoided on that ground. 9 Cyc. 453; 22 Am. & Eng. Ency. 615; Radlich v. Hutchinson, 95 U. S. 210; Ballard v. Lefferman, 4 Gill. 425; Brumagin v. Tellinghast, 18 Cal. 265; Mays v. Cincinnati, 1 Oh. St. 268; Quincy v. White, 63 N. Y. 370. In the case at bar the Jefferson Bank did nothing; it was the Clearing House that exerted the pressure. (10) As the payment was not made under duress, and was made with full knowledge of all the facts, in the eye of the law it was a voluntary payment, and cannot recovered back. 2 Elliot on Contracts, sec. 1381; 30 Cyc. 1298, 1300; Union Savings Bank v. Kehlor, 7 Mo. App. 165; Morgan v. Joy, 121 Mo. 677; Bank v. Bank, 244 Mo. 587; Dustin v. Farrelly, 81 Mo. App. 380-385; Trust Co. v. Bank, 154 Mo. App. 106; Rhodes v. Dickeson, 95 Mo. App. 395-400; Goodell v. Goolet, 84 S. E. 414; Quincy v. White, 63 N. Y. 370; Hines v. Hamilton Co. Comm'rs, 93 Ind. 266; Morey v. Carlson, 27 Mo. App. 5. (11) It is axiomatic that courts cannot make contracts for the parties. Blaine v. Knapp Co., 140 Mo. 241; Meyer v. Christopher, 176 Mo. 580. (12) This resolution having been adopted one week after the money was in fact paid in, if duress therefore existed, this constituted a ratification of the transaction. National City Bank v. Wagner (C. C. A.),

Deibel v. Jefferson Bank.

216 F. R. 478-9. (13) Where a contract is obtained by duress, the party may either repudiate or affirm it. If he elect to repudiate, he must do so within a reasonable time after the duress has been removed; long acquiescence amounts to a ratification and bars recovery. Harms v. Wolf, 114 Mo. App. 395 (six months too long); Bushnel v. Loomis, 234 Mo. 382-3; Wood v. Telephone Co., 223 Mo. 557, 564-5; Taylor v. Short, 107 Mo. 384; City Light & Power Co. v. St. Mary Machine Co., 170 Mo. App. 224-231; National City Bank v. Wagner (C. C. A.), 216 F. R. 478-9; Miller v. Davis Estate (Cal.), 122 Pac. 793; Robinson v. Sipple, 129 Mo. 220-222. (14) A party desiring to rescind a contract because of duress must tender back what he has received, and place the other in statu quo. Yeater v. Hines, 24 Mo. App. 619; Robinson v. Sipple, 129 Mo. 220-1; Jarrett v. Morton, 44 Mo. 275; Field v. Roanoke Ins. Co., 123 Mo. 603. (b) If a note has been received, even though the maker be insolvent, it must be tendered back, to effect a rescission. O'Brien v. Jones, 38 Mo. App. 90-94; Spencer v. St. Clair Co., 57 N. H. 9; Evans v. Gale, 21 N. H. 240; Crossier v. Murphy, 31 Or. 114; Wood v. Telephone Co., 223 Mo. 537; Steamboat Co. v. Lunn, 9 Mo. 63; Whitcomb v. Denio, 52 Vt. 382. (c) And this must be done unequivocably and within a reasonable time. Whitney v. Bissell, 146 Pac. 141; Field v. Roanoke, 123 Mo. 619. (15) Assuming that the agreement under which the title to the assets was transferred to Kroeger was brought about by duress, the plaintiff, as late as 1913 (four years thereafter), accepted and retained the proceeds thereof, and his trustee still retains the balance of the assets; plaintiff also during a period of two years after the transaction, as a director of defendant, made sworn statements of its condition to the State Bank Commissioner, in which he denied that the $20,000 was a liability of the bank, and like statements were made by him for publication in the daily press; the lapse of time and his affirmative acts bar him from now questioning the legality of the contract. Harms v. Wolf, 114 Mo. App. 338; 16 Cyc.

Deibel v. Jefferson Bank.

787; 9 Cyc. 443, and Authorities cited under Point 16.

BECKER, J.-This is an action by plaintiff, against defendant bank, as for money had and received. At the close of plaintiff's case the defendant's demurrer to the evidence was sustained and plaintiff took an involuntary nonsuit with leave to set same aside. From the action of the trial court in overruling plaintiff's motion for a new trial, plaintiff brings this appeal.

The plaintiff's petition is in three counts. First, that plaintiff loaned to the bank the sum of $2500, which the bank was thereafter to repay with interest. Second, that the defendant received $2500, which the defendant has retained for its own use and benefit and which the defendant should repay to the plaintiff, together with interest. The third count alleged facts which in plaintiff's view are tantamount to alleging that plaintiff, under duress, had paid into the bank the sum of $2500, but with the understanding, however, that if and when the bank's profits should have amounted to a sum sufficient to enable it to repay the same it would repay to plaintiff the said amount, and that the bank's financial condition had reached that point which did enable it to repay, but though demand had been made, payment had been refused and therefore in equity and good conscience plaintiff should have judgment against the defendant for the sum in question.

According to the testimony the defendant is a bank located in the city of St. Louis, in which city it appears no bank can exist without what is termed "clearing house facilities." This "clearing" is done by and through the means of the Clearing House Association, of which the larger financial institutions of said city are members while the smaller ones which are not accepted as members are permitted to make their clearings through some bank which is a member of the association. The defendant bank was not a member of the association but had the privilege of clearing through a bank which held membership.

Deibel v. Jefferson Bank.

In April, 1909, the Clearing House Association, which had theretofore had considerable trouble in handling the clearings for defendant bank, became convinced that the surplus and capital of the defendant bank were impaired. The directors of the clearing house at short notice summoned the directors of the defendant bank to appear before them at an executive session. The plaintiff, an owner of 700 shares of the capital stock of the defendant bank, as one of its directors appeared before the clearing house committee, together with his associate directors of the defendant bank, with the exception of Mr. Blanke, a director, who was out of the city at the time.

At this meeting the chairman of the clearing house committee announced to the assembled directors of the defendant bank that by reason of the defendant bank's financial condition the clearing house would not clear for the bank the next day unless the directors of the bank agreed to put up $30,000 in cash immediately. An attempt by the president of the defendant bank to protest against this ultimatum was promptly declared out of order. An opportunity was then afforded the directors of the bank to retire to an adjoining room to discuss the situation. When the directors of the bank had retired to the adjoining room they discussed the matter in groups of two or three and, according to the testimony, each of the directors present expressed himself to the effect that it would be necessary to acquiesce in the demand of the clearing house or the bank would be ruined. After discussing the matter at length the directors, with the exception of Mr. Berger, agreed to put up various sums which together would aggregate $20,000. Each of the directors thus agreeing to put up the money expressed his view that he expected that the bank should and would repay such sum as the directors put up when it would be in a position to do So. This proposition, that the directors of the bank pay in $20,000 instead of the $30,000 demanded, was put up to the clearing house committee and accepted.