131 Ky. 819 | Ky. Ct. App. | 1909
Opinion op the Court by
Affirming.
The appellees (plaintiffs below) instituted this action in the Jefferson circuit court to recover judgment on a note against Peter Bitzer and Magdalena Hermann.. Magdalena Hermann filed an answer pleading non est factum. Bitzer filed a separate answer pleading his discharge in bankruptcy as a bar to the debt sued for. Issue was joined on the plea of Magdalena Hermann, and the case was heard by the trial court on the law and the facts; a jury being-waived by the parties. The court filed a written statement of the facts ascertained by him from the evidence and his-conclusion of law thereupon. These are as follows:
“The plaintiffs Dudley Gregory and W. T. Pyne and the defendant Peter Bitzer bought a brickyard and executed their joint notes for the purchase money. These notes were held by the Louisville National Banking Company, and there was another note of Bitzer’s for $1,200, but upon which Gregory and Pyne were also bound, held by the First Rational Bank of Louisville. These notes had been renewed from time to time, and when the banks finally insisted upon payment Bitzer was not able to pay his part, and suits were brought and judgment rendered upon most of them. Bitzer was in business and was anxious*821 for further time in which to pay his part of these debts. He asked Gregory and Pyne to pay the debts and promised that if - they would do so he would secure them for the payment of his proportion by, giving them a note payable in six months with his mother-in-law, Miagdalena Hermann, as surety. They agreed to this, after ascertaining that Mrs. Hermann was solvent. Bitzer’s share of the indebtedness was ascertained to be $5,009.71. On the 7th day of December, 1905, the plaintiffs and Bitzer met at the office of Gibson, Marshall & Gibson by agreement, and Bitzer produced a skeleton note with the name of Magdalena Hermann signed at the foot. Barrett Gibson, acting for the plaintiffs, filled in the note, and Bitzer signed it above the name of Mrs. Hermann, and Bitzer delivered the note so signed and filled in to the plaintiffs. The note then read as follows: ‘$5,009.71. Louisville, Ky., December 7, 1905. Six months after date we promise t.o pay to the order of Dudley Gregory and W. T. Pyne, five thousand and nine dollars and seventy-one cents with interest from date. Without defalcation, value received, negotiable and payable at the First National Bank of Louisville, Ky. Peter Bitzer. Magdalena Hermann.’ The plaintiffs endeavored to discount this note, but were not able to do so and they are now the holders and owners of it; They paid off the several judgments and debts, including Bitzer’s part thereof, as they had agreed to do.
“Mrs. Hermann alleges in her answer that in December, 1905, prior to the 7th day thereof, Bitzer brought to her a blank note and asked her to sign it as his surety, saying' he wanted to use it for the purpose of raising or borrowing money, that with the distinct understanding that the note was to be so*822 used she signed it as surety, and that when the paper was presented to her it contained only this printed matter: .......... Louisville, Ky., ........... 190. .. ...........after date ......... promise to pay to the order of........ dollars without defalcation, value received, negotiable and payable at. ’ - She alleges that the note was diverted from the purpose for which she signed it, and that instead of using it to borrow money Bitzer used it to pay old debts then due for all of which the plaintiffs were bound with him. She pleads no consideration. Bitzer in his testimony says he did tell Mrs. Hermann that he intended to raise money on the note, and that she signed it with that understanding and for that purpose, but he admits that he did not tell plaintiffs that she signed for that purpose or upon any condition whatever. The plaintiffs did not know that she signed as surety for any other purpose than to enable Bitzer to carry out the arrangement he had made with them touching his pro rata of the debts. At the time of the trial Mrs. Hermann was too ill to testify in person or by deposition. Since the execution of the note sued on Bitzer has been adjudged a bankrupt and has secured his ■discharge.
“I conclude from these facts that as Bitzer produced to the plaintiffs a blank note with the signature of the person he promised to give as surety, and •as he did not know the amount for which the note was to be given when he obtained Mrs. Hermann’s signature, and for that reason could not complete it before she signed, and as the plaintiffs did not know until after they had performed their part of their agreement with Bitzer by paying the debts, nor until the answer of Mrs. Hermann was filed, that there was any restriction upon her suretyship, if such was*823 the fact, and furthermore that as Bitzer was present and produced the note for the purpose of having it filled in, Mrs. Hermann is hound by her signature. Sebree Deposit Bank v. Clark, 105 Ky. 214, 48 S. W. 1089, 20 Ky. Law Rep. 1155. As to the- plea of no consideration, Bitzer obtained six months’ further time on. his pro rata of the debts by reason of the execution of the note sued on, and that fact is a sufficient consideration to support, the promise of the surety! Steger v. Jackson, 102 S. W. 320, 31 Ky. Law Rep. 434. Por these reasons plaintiffs are entitled to judgment against the surety, Mrs. Hermann, as prayed, and it is so ordered.”
■ After the judgment of the trial court was entered Magdalena Hermann died, whereupon, by consent, the action was revived in the name of her executor, who filed grounds for a new trial, which, being overruled by the court, this appeal is prosecuted here.
■ Appellant admits in his brief that his testator would have been liable on the note as the law stood prior to the adoption of the act of the General Assembly of the Commonwealth of Kentucky known as. the “Negotiable Instruments Law” (Acts 1904, p. 213, c. 102), but insists, as the transaction involved, herein arose subsequent to the adoption of the act in question, that his testator’s liability is to be measured, by the provisions of the new law, and that when so-measured she is not responsible under the facts as found by the court. Appellant also concedes that,, under the common-law rule prevailing in this State prior to the adoption of the negotiable instruments, act, if a party signed his name to a blank note and delivered it to another for the purpose of being used 'to raise money, the first is responsible for whatever-sum the second inserts in the body of the note. Bank
Without wholly giving our consent to the contention of appellant, let us see whether his testator’s estate can escape liability under the rule as laid down by himself. In the first place, were the appellees holders for value? That the note was delivered to them is not questioned. Section 25 of the Negotiable Instruments Law is as follows: “Value is any consideration sufficient to support a simple contract. An antecedent or pre-existing debt constitutes a value, which is deemed such, whether the instrument is payable on demand or at a future time.” It is admitted that the appellees paid for Bitzer, upon receiving the note, $5,000, which he owed the banks, and therefore, under the very language of the statute, there was a valuable consideration for the note. Section 26 of the act is as follows: “Where value has at any time been given for the instrument, the
Now, what was the' diversion which the appellant claims rendered the note invalid in the hands of the appellees! The facts are set up in Mrs. Hermann’s answer, and are as follows: ‘ ‘ She says that said paper was signed by no one at the time the same was presented to her by her codefendant, Peter Bitzer, and she says that her codefendant, Peter Bitzer, stated and represented to her that he desired to borrow or raise some money and requested of her that she should sign her name to said note as his surety,' and this defendant says that, as requested by her co-defendant, and his surety, and with the distinct agreement and understanding that the same was to be used by her codefendant, Peter Bitzer, for .the purpose of borrowing money, she signed her name at the bottom of said note, and which note was blank as to the matters and in the particulars as hereinbefore set out at the time she signed the same, and there was no other signature signed or appended to said note. She says * * * she handed the same (the note) to her codefendant, Peter Bitzer, who received it from her and afterwards and without her knowledge or consent had the same filled out as it now appears, and signed the same and delivered the same to the plaintiffs herein in settlement of or in consideration of a debt or obligation that was on and prior to the time that this defendant signed said note due and owing by her codefendant to the plaintiffs herein, and she says that said note was not used by her code
It seems to us on the statement of the answer and
For these reasons, we are of opinion that the judgment of the trial court should be affirmed, and it is so ordered.