105 Ky. 212 | Ky. Ct. App. | 1899
DELIVERED THE OPINION OF THE COURT.
These four cases practically involve the same questions of law and fact, and were heard together in the court below, and by agreement are heard together in this court. It appears that J. T. Herron was a merchant in Bison, Kv., and some time in the year of 1894 the appellant loaned to
It is the contention of appellees that the appellant knew of the insolvency of Herron, and that it conspired and agreed with him to divide the large note into small notes for the purpose of enabling Herron to obtain sureties, which he could not otherwise have obtained, and that it aided Herron in misleading the sureties as to his condition and as to the purpose for which the notes were being executed. It is the contention of appellant that it was not aware of Herron’s insolvency, and that it was simply a business transaction; that it desired to collect the $2,500 note, but inasmuch as Herron could not or would not pay it when due, that it desired and demanded better security; and that at the instance of Herron himself, and without any intention of aiding him in defrauding anybody, and without any information or expectation that Herron would do so, it agreed to the division of the debt, as hereinbefore stated.
It is a well-settled rule of law that, if the obligee of a note obtains the signature of a surety for the principal by any fraudulent misrepresentation or concealment of material facts in regard to the condition of the principal, the surety will be released. It is also well, settled that, if the appellant had notice that the sureties
It is suggested on behalf of appellees that the notes in question indicated that money was to be furnished, and therefore appellant had notice that they were executed for that purpose; but the notes appear to be in the regular form used in executing notes either to obtain money or renewal of an antecedent obligation. It is not an extraordinary proceeding for a creditor who desires to collect a debt, and is unable to do so, to attempt to procure sufficient security, and in this case it seems certain that the surety on the $2,500 note was notoriously insufficient. Nor is it strange that Herron would believe that he could obtain security more readily by dividing the debt into smaller notes, for it is quite reasonable that some friends would be willing to sign a note for $500 or $600 when they would not desire to incur as large an obligation as $2,500, and the fact that the debt in question was so divided certainly does not establish a fraudulent intent upon the part of Herron. Nor was it sufficient notice to appellant that Herron contemplated perpetrating a fraud upon his confidential friends. It is true that Herron was insolvent at
It is suggested by appellees that, if there is- any evidence to support the finding of the court below on a question of fact, this court will not reverse, but treat such finding in the same manner as if it was the verdict of a properly instructed jury. Such, however, is not the rule of this court in equity cases. . It is a well-settled rule of law that in equity causes this court will consider the. evidence introduced, and determine therefrom what judgment should have been rendered. We are unable to say that the evidence in this case conduces to show, in a reasonable degree, that appellant was guilty of any unusual, improper, or fraudulent acts in connection with the execution of the notes in question. It therefore results that the court erred in rendering the several judgments. The judgments are therefore reversed, and causes remanded, with directions to set aside the judgments appealed from, and to dismiss the several petitions, and for proceedings consistent herewith.