Federal Deposit Insurance Corporation v. Culver

640 F. Supp. 725 (1986)

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Nature of the Case

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Facts

D entered into a business arrangement with Kalliel. Kalliel was to assume control over the financial aspects of d's farm, while D was to manage the farming operation -- receiving both a salary and a share of the profits. D informed Kalliel that he urgently needed money in order to stave off foreclosure. One week later, $30,000.00 was wire-transferred to D's bank. D knew that the money had come from the Rexford State Bank. D thought that Kalliel would be responsible for its repayment. About one week later, Gilbert, whom D believed was working for Kalliel said that 'Rexford State Bank wanted to know where the $30,000.00 went, . . . for their records.' Gilbert presented D with a document and asked D to sign it. Gilbert either told or led d to believe, that the document was a receipt for the $30,000.00 he had received. D signed the document without intending to commit himself to the repayment of any money. The document was a pre-printed promissory note. At the time D signed the document, none of those blanks had been completed. There was no execution date, no maturity date, no principal amount, and no interest rate. The payee was filled in with 'THE REXFORD STATE BANK, Rexford, Kansas.' The note was in fact completed as follows: (1) the principal amount was shown as $50,000.00; (2) the execution date was shown as August 2, 1984; (3) the maturity date was shown as February 2, 1985; and (4) the interest rate was shown as 14 1/2 percent per annum until maturity, and 18 1/2 percent per annum thereafter. Kalliel did receive the full $50,000 of which D got $30,000. The Rexford State Bank became insolvent. D purchased a number of the assets from the receiver. When D purchased P's note, it had no actual knowledge of the events. P sued D to enforce the note.