100 Ky. 683 | Ky. Ct. App. | 1897
delivered the opinion op the court.
It appears from tbe record in this case that the New Farmers’ Bank of Mt. Sterling, Ky., some time prior to the 23d day of September, 1893, made an assignment of all its property for the benefit of all its creditors to B. B. Yonng, who failed to qualify as such assignee, and that such proceedings were had as resulted in the appointment of the appellant as assignee of said bank,
It is alleged in the petition in this case that R. Bruce Young and N.B. Young had,on the 1st day of January, 1893, executed their note to said bank for the sum of $1,000, due in six months from date, no part of which had been paid.
It is also alleged that R. Bruce Young is the principal in said note, and has been good and solvent, and has been so ever since the execution of said note, and all the time a resident of Montgomery county, Ky., and is entirely able to pay said note with interest, and that N. B. Young is only surety on said note.
It further appears from allegations in the petition that the following endorsement had been on the note, viz.:
December 16, 1893.
“Paid $467.65 by offset.' N. B. Y.”
It is claimed in the petition that said endorsement was made by mistake of law, and occurred in substance as follows, yiz.: H. Y. Sanders, appellant’s agent, directed L. M. Bent, a clerk in appellant’s employment, that where any depositor or creditor of said bank owed a note to the bank at date of assignment to set off the same against the creditor’s claim and enter credit, therefor, and did not in said direction distinguish between the claim of a creditor or depositor, who was
It is further alleged in substance that Bent, who had been a clerk in the bank before the assignment, doubtless knew that R. Bruce Young was the principal in the note, yet that fact was unknown to appellant, its officers and agents, until after said 16th day of December, 1898.
It is further alleged in substance that the assets of the bank are insufficient to pay the creditors and depositors of the bank in full, and that it would be in* equitable and unjust to the general creditors for N. B, Young to be paid in full, and that the said credit should be canceled, and judgment is prayed for against R. Bruce Young only for the amount of the note, and that the credit be canceled and for proper relief.
The defendants, the Youngs, offered to confess judgment for the amount of the note, subject to the said credit, which it seems was not accepted.
The substance of the answer is a plea insisting on the credit; a denial that the plaintiff’s officers and agents in the management of the business did not know at the time of the credit that N. B. Young was
The reply in substance alleges that the note on V. JB. Young and N. B. Young could only be collected from the latter, Y. B. Young being dead and his estate insolvent. The reply traverses the affirmative matters in the answer, except as to the Y. B. Young note and the $4.80 account. Afterwards the appellant was permitted to file an amended petition.
It is substantially alleged in the amended petition that on or about the 17th day of October, 1893, the ap
The receipt is tendered and filed, and an offer made to cancel the entire transaction, and demanded a return of the V. B. Young note. The amended petition was traversed of record. The court rendered judgment in favor of the defendants, and denied the relief asked, and from that judgment this appeal is prosecuted.
The effect of the assignment made by the bank was to appropriate its assets to the paynrent pro rata of all claims against it, subject, of course, to all legal rights of set-off held at the time by its debtors. It is not claimed that the assets are sufficient to pay all creditors in full.
If the claim of N. B. Young in this case is sustained the result would be that he would collect in money his entire claim, for under his claim he would obtain a credit upon the note in suit for the full amount.of Iris demand, and his principal being solvent he would then collect of him the full amount so paid.
It seems to us that he can not be allowed to do so. He had no claim against his principal until he paid the debt, and while it is true that he could have been compelled to pay, yet if it is also true that no effort was being made by appellant then, nor is there now, to compel him to pay, hence he was a volunteer in the transactions set up. He was not in fact paying the debt to the bank, but in reality securing a debt that the bank owed him. The law did not authorize him to do so.
For the reasons given the judgment of the court below is reversed and cause remanded, with directions