Warren Deposit Bank v. Younglove

112 Ky. 767 | Ky. Ct. App. | 1902

Opinion op the court by

JUDGE O’REAR —

Reversing.

J. I. and J. E. Younglove were partners engaged in the sale of drugs at Bowling Green, Ky., and the firm name and style was J. I. Younglove & Bro. On December 9, 1898, a sixty-day note for $1,000 was executed, payable to Robert Underwood, and negotiable a,t appellant bank. It was signed: “J. I. Younglove. J. I. Younglove & Brother.” This note was negotiated by and discounted to the bank before its maturity, and for value. .J. I. Younglove died, and, his estate having proved insolvent, the bank brought this suit against J. E. Younglove, the other member of the firm, to recover the balance on the note. The defense was that the note sued on was not the debt of the firm; that it did not owe Underwood anything, and did not receive from him any consideration for the execution of the note; that it was executed by J. I. Younglove on account of his individual affairs, without the knowledge or consent of the other member of the firm, and that it was not1 on account or within the scope of the firm’s business; that the name of the firm was signed to the note as surety only. An issue being joined, a trial resulted in a verdict and judgment for appellee.

The following questions of evidence are presented by this appeal: In the course of his testimony appellee J. E. Younglove said: “It is my opinion that he (meaning his brother, J. I. Younglove) borrowed the money to make a payment on some land which he bought about that time, because he made a cash payment on the land, and he had no money on hand out of which he could have made the payment.” This evidence was objected to. The opinion of the witness and statements resting upon it were not relevant, noi was this witness competent to testify to the facts stated, even had they been given as matters of knowledge, instead of an opinion, and should have been excluded. The same witness further testified: “My brother agreed to pay for the land $3,950. He paid a part of this, but at the time of hjs death all of it had not been paid. I think a mortgage w’as given for a part of the money given for the land.” All of the foregoing was incompetent. This witness was not competent to testify for himself as to anything done or omitted to be done by the decedent, nor was his opinion that a mortgage had been given for part of the money relevant matter in evidence.

At the close of the evidence the court instructed the jury that they should find for appellant unless they believed from the evidence that plaintiff, when accepting and discounting the note, knew that its proceeds were not to be used for the benefit of the firm, but for the individual use of J. I. Young-love, “or that the circumstances connected with the discounting of said note, if any are shown by the evidence, were such that the plaintiff could, by the exercise of ordinary care, have learned thereby that the discounting of said note was for' the benefit of J. I. Yoiingldve alone.” The second and third instructions given embodied the same idea as that quoted above. The court is oi opinion that these instructions were erroneous. Those entitled to discount negotiable notes, so that they may be placed upon the footing of foreign bills of exchange, are not compelled to exercise care to learn whether there are equities or defenses thereto. If the note or bill discloses by any matter upon its face any infirmity or defense to it, of course any purchaser will be affected with notice thereof. Or, if such purchaser has actual knowledge of such facts with reference to the paper as would in law constitute notice of the. defense thereto, he will be affected by it. But we are of opinion that, although it may be beyond the scope of a partnership business to execute notes as surety, yet the mere signing of .such a note, the signature of the firm being last upon it, is not sufficient of itself to indicate that the last signature is that of a surety. Sylverstein v. Atkinson, 45 Miss., 81. The positions of the names signed to a note do not constitute their relation to the debt. In fact, the one signing first, and whose name may first appear, may be the surety, while the one whose name appears last may be the principal. From the necessity of the case, one name must appear first and others follow it. This is so whether the case be that of principal and surety or joint principals. Therefore the mere position of signatures to the note will not indicate that either is a surety in point of fact. The note appears to be a joint obligation. Nothing is said about either of the. makers being a surety. No presumption can be indulged as to whether either is surety or both principals. . Therefore, if there is nothing else in the case indicating the relation of the makers to the note at the time of its discounting by the bank, and the bank had no other notice or knowledge of the fact that the firm name was signed as surety instead of joint principal, a peremptory instruction should have gone directing a verdict for the plaintiff. Story, Bills, sections 78, 388; Le Roy v. Johnson, 2 Pet., 196, 7 L. Ed., 391; Bank v. Brooking, 2 Litt., 45; Woolfolk v. Bank, 10 Bush, 515; Montgomery v. Bank, 16 Ky. Law Rep., 445, — seem to sustain the conclusion at which we have arrived.

The judgment is reversed, and cause remanded for a. new trial not inconsistent with this opinion.

Chief Justice G-uffy, dissents. Judge Paynter not sitting.