213 Wis. 443 | Wis. | 1934
The following opinion was filed November 7, 1933 :
The note upon which recovery is sought is in the amount of $12,000, is-dated February 9, 1931, is signed by the defendant alone, and is the sixth renewal of a like note dated January 11, 1929. Nothing has been paid on the note except $6.09, which was credited thereon after the bank closed, said sum being the amount which the defendant had on deposit at the time the bank closed. When the original note was given the defendant was a holder of a considerable amount of the preferred stock of Waterways Engineering Company, a corporation engaged in the business of bridge building, harbor dredging, and marine construction work with headquarters at Green Bay. The company had a number of contracts on which work was either wholly or largely suspended during the winter months. The company did practically all of its banking business with the McCartney National Bank. At the time the original note was given the company was in need of funds but was'un
The verdict framed by the court consisted of three questions :
“1. Did the defendant, Charles H. Greiling, sign an 'accommodation note for the Waterways Engineering Company to the McCartney National Bank, dated January 11, 1929, in the sum of $12,000, which note has been renewed by the defendant, Greiling, periodically thereafter, up' to and including the note dated February 9, 1931?”
This question was answered “Yes” by consent of the parties.
“2. When the defendant, Greiling, signed the original note on January 11, 1929, was it mutually agreed between J. H. Tayler for the bank, R. A. Heffernan for the Waterways Engineering Company, and Charles H. Greiling, that the loan of $12,000 as evidenced by the note would be repaid out of the first moneys thereafter to come into the hands of said Waterways Engineering Company, out of its operations ?”
This question was also answered “Yes” by consent of the parties.
“3. Did the defendant, Charles H. Greiling, sign the renewal notes with knowledge that the proceeds obtained by the Waterways Engineering Company, from its operations, had been sufficient to have paid the note and that, such money had not been applied as payment upon his accommodation note?”
This question was answered “Yes” by the jury.
Upon the coming in of the verdict the plaintiff moved for judgment on the verdict and the defendant moved for judgment notwithstanding the verdict. The court granted the plaintiff’s motion, holding that whatever defense the
The defendant assigns as error the granting of plaintiff’s motion for judgment on the verdict and contends (1) that it should be held that the defendant was released by virtue of the agreement that the note would be taken care of out of the first substantial moneys coming to the company (sufficient moneys having been thereafter received by the company), and (2) that it should be held that the note was discharged, since the defendant was an accommodation maker, and the bank from time to time, as the company deposited moneys with it, had within its control the means of complete satisfaction of the note.
As to the first contention, assuming that the oral agreement was admissible in evidence, which seems very doubtful, and even assuming that the failure of the bank and the company to take care of the note as promised and agreed might operate as a defense to the original note, which we do not decide, it seems clear that the defendant fully waived any such agreement by renewing the original note six different times.
It seems to be well established that where the maker of a note against which there is a valid defense not based upon public policy, executes a renewal note, he waives such defense. State Savings Bank v. Deal, 200 Iowa, 490, 203 N. W. 293; First State Bank v. Gunderson, 54 S. Dak. 473, 223 N. W. 596, 600; Olson v. Union Central Life Ins. Co. 58 N. Dak. 176, 225 N. W. 124; Lincoln Nat. Bank v. Miller, 255 Pa. St. 467, 100 Atl. 269; Thorpe v. Cooley, 138 Minn. 431, 165 N. W. 265; McCormick H. M. Co. v. Yoeman, 26 Ind. App. 415, 59 N. E. 1069. See, also, note in 35 A. L. R. 1258. In German Nat. Bank v. Barber, 159 Wis. 109, 149 N. W. 767, it was held that whatever right the appellants therein had to insist upon their release from liability as sureties on account of the relinquishment by the
The jury found that the defendant signed the renewal notes with knowledge of the fact that the proceeds obtained by the company from its operations had been sufficient to pay his note had it been applied in payment thereof. That finding of the jury is, we think, amply supported by the evidence.
The difficulty with defendant’s second contention is that, while he was an accommodation maker, his liability to the bank was primary. Sec. 116.01, Stats., provides:
“The person ‘primarily’ liable on an instrument is the person who by the terms of the instrument is absolutely required to pay same. All other parties are ‘secondarily’ liable.”
Sec. 116.34 provides:
“An accommodation party is. one who has signed the instrument as maker . . . without receiving value therefor, and for the purpose of lending his name to some other person. Such a person is liable on the instrument to a holder for value, notwithstanding such holder at the time of taking the instrument knew him to- be only an accommodation party.”
It seems clear, therefore, that the defendant was primarily liable to the bank even though the bank knew him to be only an accommodation party. Schoenwetter v. Schoenwetter, 164 Wis. 131, 159 N. W. 737; Rosendale State Bank v. Holland, 195 Wis. 131, 217 N. W. 645. The contention that defendant was discharged because the bank at various times had within its control the means of complete or partial satisfaction of the note is based upon sec. 117.38 (4a). That section provides :
“A person secondarily liable on the instrument is discharged : . ... By giving up or applying to other purposes*450 collateral security applicable to the debt, or, there being in the holder’s hands or within his control the means of complete or partial satisfaction, the same are applied to other purposes.”
That section is obviously not applicable to the facts here since the defendant was primarily, not secondarily, liable to the bank. We think defendant’s second contention without merit.
By the Court. — Judgment affirmed.
A motion for a rehearing was denied, with $25 costs,. on January 9, 1934.