Heritage Bank v. Bruha

812 N.W.2d 260 (2012)

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Nature of the Case

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Facts

D signed 4 different promissory notes with Sherman County Bank. The notes secured lines of credit where D could borrow money from Sherman County Bank. D then invested the money in accounts with a trading company, which allegedly shared management with Sherman County Bank. D claims that Sherman County Bank misled him into borrowing money that, in turn, he invested with a trading company that generated trade commissions through risky and speculative commodity trading. The record contains no internal records or documents of Sherman County Bank evidencing any of the representations regarding his account that D claims Sherman County Bank made. Sherman County Bank failed, and the FDIC was appointed as receiver. The FDIC sold and assigned some of Sherman County Bank's assets to P. P sued D to enforce the notes. P alleged that it was a holder in due course and entitled to enforce the note. Only note No. 1723 is the subject of this appeal. P claimed that the principal was $75,000 and that the initial interest rate was 8.25 percent, which jumped 5 percentage points upon default. D admitted that he signed note but did not do it voluntarily. He claimed his signature was obtained 'by fraud and/or misrepresentation.' D admitted that he had not paid the note and denied that he was obligated to do so. P moved for summary judgment, and it was granted. D appealed. D argues that P is not a holder in due course nor was the FDIC.