Brown v. Farmers' Deposit Bank

• Decision Date: 17 February 1928
• Citation: 223 Ky. 171
• Parties: Brown v. Farmers' Deposit Bank, et al. Sheeran v. Same.
• Court: United States State Supreme Court — District of Kentucky

223 Ky. 171

Brown v. Farmers' Deposit Bank, et al.

Sheeran v. Same.

Court of Appeals of Kentucky.

Decided February 17, 1928.

1. Appeal and Error. — Denying motion to strike out county and state highway commission as parties plaintiff in actions on notes evidencing donations for federal highway, if error, held harmless,

where another plaintiff, to which notes were made payable, could maintain actions thereon for benefit of any state agency which should construct highway under Civil Code of Practice, section 21.

2. Subscriptions. — Notes evidencing donations made "to help construct a federal highway known as" specified highway inured to benefit of whatever state agency should finally construct highway, and consideration for such notes did not fail because county did not construct highway, under Acts 1920, c. 17, authorizing state highway commission to do so.

3. Subscriptions. — Notes evidencing donations "to help construct a federal highway known as" specified highway held not to require completion of highway through county before they should become payable.

4. Subscriptions. — Consideration for notes evidencing donations "to help construct a federal highway known as" specified highway was procuring of such highway on agreed route, and Acts 1920, c. 17, authorizing state highway commission to construct such highway rather than county, did not destroy consideration or impair it.

5. Subscriptions. — Where agreement to contribute to fund in aid of federal highway specified route as passing through two villages, an unincorporated community grouped around a crossroads and a farm, agreement was substantially complied with by locating highway through said community within half mile of crossroads.

6. Constitutional Law. — Acts 1920, c. 17, authorizing state highway commission to construct highway and declaring that donations for highway to counties should remain binding merely substituted new agency as beneficial obligee of notes evidencing donations, and did not alter obligation of contract of donors.

7. Subscriptions. — Where maker of note evidencing donation for federal highway was liable under evidence to payee for unpaid balance, he could not recover payment by counterclaim.

Appeals from Meade Circuit Court.

H.L. JAMES for appellants.

WOODWARD, WARFIELD & HOBSON, JOHN MARSHALL, JR., and W.D. ASHCRAFT for appellees.

OPINION OF THE COURT BY JUDGE THOMAS.

Affirming.

Prior to the taking effect of chapter 17, Acts of 1920, each county in the commonwealth constructed and maintained its portion of through highways connecting county seats, and it was so done under what was designated as the "state and federal aid plan." In the latter part of 1918 or the first part of 1919, the citizens of a number of counties in the commonwealth between Louisville and Paducah, Ky., began an agitation for the construction of a through highway connecting those two cities. A great many if not all of the counties did not have, nor could they legally raise, a sufficient amount by taxation to defray their part of the construction of such through highway, and, to supplement its part of the cost, some of the citizens of Meade county signed articles of subscription by which they agreed to donate the amount set opposite their names in order to supply such deficit. Two of such subscribers were the appellants, Gabe Brown and Pete Sheeran, in the two cases stated in the caption, the former subscribing $500 and the latter $1,000. The subscription paper that each of them signed read:

"We, the undersigned subscribers, hereby subscribe, bind, and obligate ourselves to pay the amount set opposite our name to help construct a federal highway in Meade county, Ky., known as the federal highway between Paducah, Ky., and Louisville, Ky., provided said highway passes through the following places in Meade county, Ky.: Running from Tip Top, Ky., to Grahampton, Ky.; thence to Hog Wallow; thence to William Hilf's farm — and we further agree and bind ourselves to donate any lands or ground necessary for a right of way for said federal highway which is to be built according to federal and state plans, and we further guarantee the payment of my said subscription to the Farmers' Deposit Bank, Brandenburg, Ky."

Later, and on August 15, 1919, each of them signed notes made payable to the appellee and plaintiff below, Farmers' Deposit Bank of Brandenburg, Ky., in which their subscriptions were divided into installments payable at designated dates, the last one due on January 1, 1922, and it was stipulated in the notes that, if any installment became due and unpaid, the due dates of all future ones would be precipitated, and might be collected "by suit or otherwise." It was also stipulated in the notes that:

"We hereby expressly agree that the entire proceeds of this note shall be placed and shall go to the credit of the federal and state highway which it is proposed to build through Meade county, Ky., and no part of the proceeds of this note is to go to our individual credit."

At the time of the execution of the notes, Meade county had taken no step toward the actual construction of the road, but after the effecitve date of the 1920 act the county in connection with the state highway commission became active in preparing for and constructing the road through it. Under that act it became the duty of the county to furnish the right of way along the route to be selected by the highway commission, which latter had the right to accept donations from the various counties through which state highways were constructed, as well as from individuals and corporations, and the act by express terms kept alive all promised donations theretofore made to the counties for the construction of state and federal aid roads under previously existing law. In conformity therewith, the fiscal court of Meade county, after the effective date of the 1920 act, legally appropriated or donated to the state highway for the construction of the road through that county a sum equal to the amount of its authority to raise by taxation, plus the amount of prior donations,...