112 Ky. 893 | Ky. Ct. App. | 1902
Opinion op the court by
Reversing.
Thomas B. Youtsey was cashier of the First National Bank of Newport, the appellee Phillips was a clerk in the bank, and appellee Anderson was a.friend of said Youtsey. Both of them were assisting Youtsey in floating papers secured by collateral in the shape of stock of said bank. Each of them executed his separate note, payable to himself, respectively, and sold the notes to brokers in Cincinnati, Ohio, the notes having attached to them the collaterals aforesaid. The appellant, Hoffman, purchased both of the notes. While he was the owner of the notes, and before their maturity, the bank failed, and the stock became worthless. It is claimed that appellant learned after the failure, and after he became the owner of the notes, that the makers of them were really acting as accommodation makers or brokers for Youtsey, and, appellees failing to make proof of their claim against Youtsey’s estate, Youtsey having in the meantime made an assignment for the benefit of creditors, the appellant filed his claim, and asked to be subrogated to whatever claim appellees had against Youtsey, and on his petition .was made a party to the suit to settle the estate of Youtsey. The appellees answered the cross petition of Hoffman, alleging' they were acting merely as agents of Youtsey, and that by reason thereof they were relieved
It is the contention of appellant that appellees occupied the position simply of accommodation makers of this paper; that they were acting for the accommodation of Youtsey; and that Youtsey received all of the benefit accruing from their issuance of the paper, but that such is the case in thousands of instances, and the mere fact that an accommodation maker does not receive any of the benefits of the paper executed does not relieve him from liability. It is not charged that Phillips and Anderson acted as agents of Youtsey, but it is charged that they executed and discounted the notes for the benefit of Youtsey for his accommodation. It is further contended for appellant that there was' no agency on the part of Youtsey to appellees to sign his name to the notes, and they did not pretend to execute the notes in the name of Youtsey. It is contended that, appellees being accommodation makers, they are bound on their contract, and, under the proof that Youtsey is also bound, that appellant was entitled to avail himself of the equitable doctrine of subrogation to the claim Phillips and Anderson had against the estate of Youtsey, and nothing more. It is further contended for appellant that appellees could not be released from their liability to him on account of anything he did in seeking to..'collect the claim off Youtsey, unless such action had in some way prejudiced appellees, which, it is contended, has not been done in this' case.
It is contended for appellees that before the notes matured the appellant learned the true nature of the transac
It will be seen from the petition of appellant that, after setting out the note executed by appellee Anderson, of date the 21st of November, 1890, it is further alleged that Anderson had no property subject to execution, and it is also alleged that the stock of the First National Bank pledged as collateral was of no value. It is further' alleged that appellee Anderson executed, indorsed, and delivered said note for the accommodation, benefit, and behoof of said Youtsey, who received the entire proceeds thereof, and though Anderson is to that extent a creditor of the estate of Youtsey, he declined to make claim against Youtsey for the amount of said claim, and the petitioner prays to be subrogated to all the rights of the said Anderson as a creditor of the said Youtsey, to the extent of the amount of said notes and interest; that defendants Samuel E. Anderson and T. B.
That the claims sued upon by the appellant are bills of exchange seems to be admitted, and is undoubtedly true, whether admitted or not. It will be observed that appellant claims that he was only seeking to be subrogated to the rights of the appellees as against Youtsey, so far as the prosecution of his claim against Youtsey is concerned. It is clear, under the proof in this case, that, if appellees had been compelled to pay appellant the debt sued on, they would have been entitled to recover the same from Youtsey;
We deem it unnecessary to determine whether appellees were technically what is understood as agents for Youtsey, or whether they should be held to be the obligors in the accommodation paper issued for the sole benefit of Youtsey.
We do not understand the decision in Jones v. Johnson to settle this case for appellees, though it appears from the decision that Emory’s Sons, after a full knowledge of the transaction had with Dorn, elected to proceed against Dorn or his estate for payment of the debt, and it was insisted that therefore, they were precluded from looking to the bank, the unknown principal at the time loan of money was made to Dorn and the bank stock pledged. It will be seen, from' examination of the case supra, that a suit was pending in the same court in equity to settle the affairs of the bank, and also one to settle the estate of Dorn, and that Emory’s Sons had filed their claim against Dorn’s estate, and also sought to recover from, or, in other words, also filed their claim against the bank, and the bank insisted that presentation and filing of the claim against Dorn’s estate, and .receiving a pro rata therefrom, precluded a recovery against it, and the circuit court so decided; but this court reversed the judgment, and held that the prosecution of the claim.against Dorn’s estate did not bar Emory’s Sons’ right to recdver against the bank. It is therefore manifest that the case supra supports the contention of appellant rather than that of appellees. After a careful consideration of this case, we are 'of opinion that the prosecution of the claim of appellant against Youtsey constitues no defense upon the
Judgment reversed, and cause remanded for proceedings consistent herewith.
Petition for rehearing by appellee overruled.