BLACK RIVER ELECTRIC COOPERATIVE, A Missouri Rural Electric Cooperative v. PEOPLE'S COMMUNITY STATE BANK, n/k/a PEOPLE'S COMMUNITY BANK

DANIEL E. SCOTT, J

Acting as a financing conduit under a USDA loan program, Black River borrowed $450,000 from the USDA and relent it to a Mr. Baker to start a business. Black River had required a letter of credit (LOC) as loan security; its file contained one purportedly issued by People’s Bank (Bank).

When Baker defaulted several years later, still owing $129,000, Black River made claim on the LOC. Bank disclaimed any knowledge of it and refused to pay. Black River sued to collect.

The case was tried without a jury. One contested issue was whether Irv Ellington (an imprisoned former Bank vice…