Corydon Deposit Bank v. McClure

• Decision Date: 04 June 1908
• Citation: 110 S.W. 856
• Parties: CORYDON DEPOSIT BANK v. McCLURE et al.
• Court: Kentucky Court of Appeals

110 S.W. 856

CORYDON DEPOSIT BANK v. McCLURE et al.

Court of Appeals of Kentucky.

June 4, 1908

Appeal from Circuit Court, Henderson County.

"Not to be officially reported."

Action by the Corydon Deposit Bank against H. D. McClure and others. Judgment for defendants, and plaintiff appeals. Reversed and remanded.

Vance &amp Heilbronner, for appellant.

Thomas E. Ward, for appellees.

SETTLE J.

The appellee H. D. McClure executed to the appellant, Corydon Deposit Bank, his note for $1,115.75, to which he signed the name of his mother, Mary H. McClure, as surety, supposing he had authority in writing from her to do so; but this court in McClure, Ex'r, v. Corydon Deposit Bank, 106 S.W 1177, 32 Ky. Law Rep. 772, held that the writing relied on did not confer upon H. D. McClure authority to sign the note in question. The note of $1,115.75 was given in renewal of three other notes held by the bank against H. D. McClure, one of which was a past-due note of $440, in which he was principal and Mary H. McClure surety. It is conceded that the latter's signature to the $440 note was written by her. After the execution of the $1,115.75 note, Mary H. McClure died testate, and soon thereafter the appellee H. D. McClure as executor of her will, brought suit in the Henderson circuit court for a settlement of her estate. The $1,115.75 note was filed by appellant with the commissioner of the court for allowance and payment. It was allowed by the commissioner to whose report appellee filed exceptions. The circuit court sustained the exceptions, and rejected the claim upon the ground that Mary H. McClure's estate was not liable for the note, because her name had been signed thereto as surety by her son H. D. McClure without authority in writing from her. Subsequently appellant brought suit against the executor upon the note of $440 attempted to be merged in the $1,115.75 note. An answer was filed by the executor, denying that the estate of the executrix, or that he as executor of her will, was liable for the $440 note, or any part thereof and alleging that she had been relieved from such liability by the act of appellant in merging the note with others, on which she was never bound, in the $1,115.75 note, and in accepting the latter note and marking the $440 note on the back "Paid"; and, in addition, by postponing, without her knowledge or consent, the maturity and payment of the $1,115.75 note in consideration of interest paid in advance by H. D. McClure, the principal which acts of appellant, it was further alleged, kept from her information of the attempted merger of the $440 note into the $1,115.75 note until H. D. McClure became insolvent and prevented her from taking steps to compel H. D. McClure to pay the $440 note on which she was or had actually been surety. By agreement of the parties a trial by jury was waived and the cause submitted to the court, whose findings of law and fact were adverse to appellant and resulted in a judgment dismissing the action. Appellant asked and was refused a new trial. Hence this appeal.

It is manifest that at the time of the execution of the $1,115.75 note both H. D. McClure and the officers of the appellant bank believed the former had authority under the writing from his mother to sign her name thereto as surety; but in this they were mistaken. Such authority was not conferred by the power of attorney, and, this being true, the note of $1,115.75 was invalid; indeed, as much so as if her name appearing thereto as surety had been forged. While the act of H. D. McClure in signing his mother's name to the renewal as surety, under the circumstances, manifested no moral turpitude, it was nevertheless an illegal act, and, as an assumption of authority false in law and in fact. Being therefore, void ab initio, its execution by the principal, and acceptance by the bank, did not merge or discharge the $440 note upon which Mrs. McClure was surety. As said by this court in McClure's Executor v. Corydon Deposit Bank, supra: "If the note signed for her by her son is invalid, the bank, having accepted the renewal on the faith that the signature was valid, should be remitted to the former note which it then held, and was admittedly valid." In Stratton v. McMakin, 84 Ky. 641, 4 Am. St. Rep. 215, it is said: "The verdict and judgment in the suit...