First Nat. Bank v. Bickel

• Decision Date: 23 May 1911
• Citation: 143 Ky. 754,137 S.W. 790
• Parties: FIRST NAT. BANK v. BICKEL et al.
• Court: Kentucky Court of Appeals

137 S.W. 790

143 Ky. 754

FIRST NAT. BANK v. BICKEL et al.

Court of Appeals of Kentucky.

May 23, 1911

Appeal from Circuit Court, Jefferson County, Common Pleas Branch Second Division.

Action by the First National Bank against C. C. Bickel and others. From a judgment of dismissal, plaintiff appeals. Affirmed.

Helm &amp Helm, for appellant.

Benjamin F. Washer, Norton L. Goldsmith, W. Pratt Dale, Henry W Sanders, Flexner & Campbell, and Chas. H. Shield, for appellees.

HOBSON C.J.

The following note was executed to the First National Bank of Louisville: "Louisville, Ky. May 29, 1907. Sixty days after date I promise to pay to the order of the First National Bank of Louisville, five thousand dollars, value received, negotiable and payable at the office of the National Bank of Kentucky. White City Company, by C. C Bickel, President." On the back of the note when it was delivered to the bank appeared the following signatures: "C. C. Bickel, I. Frost, J. B. Ohligschlager, W. H. Labb, Richard D. Bakrow, J. M. Sharp, Emanuel Bakrow, and L. Simons." The note was not paid at maturity, and this suit was brought against the abovenamed parties, who had placed their names on the back of it. There was no allegation in the petition of notice to the indorsers of the nonpayment of the note at maturity. The defendants demurred to the petition. The court sustained the demurrer. The plaintiff then filed an amended petition. The defendants demurred to it. The court sustained the demurrer, and, the plaintiff failing to plead further, dismissed the action. The plaintiff appeals.

Section 63 of the negotiable instrument act is as follows: "A person placing his signature upon an instrument otherwise than as maker, drawer or acceptor is deemed to be an indorser, unless he clearly indicates by appropriate words his intention to be bound in some other capacity." Section 89 is as follows: "Except as herein otherwise provided, when a negotiable instrument has been dishonored by nonacceptance or nonpayment, notice of dishonor must be given to the drawer and to each indorser and any drawer or indorser to whom such notice is not given is discharged." The defendants placed their names upon the paper before its delivery to the bank, and otherwise than as maker, drawer, or acceptor, and they did not indicate by appropriate words any intention to be bound in any other capacity than as indorser. As no notice of the dishonor of the note was given them, nothing else appearing, they were discharged. This precise question was before us in Mechanics' & Farmers' Savings Bank v. Katterjohn, 137 Ky. 427, 125 S.W. 1071, and we there held that the indorser was released if notice of dishonor was not given. There being no allegation in the petition that notice of dishonor was given the indorsers, and no facts being alleged to excuse the want of notice, the circuit court did not err in sustaining the demurrer to the original petition. The amended petition is in these words: "Comes the plaintiff, First National Bank, and by leave of court amends its petition, and states that the defendant the White City Company is a corporation organized for the purpose of conducting a summer amusement park; that at the time of the making of the note and the creation of the debt sued on herein said company was largely in debt, in a much greater sum than the value of all its property, and had then mortgaged its property for at least 50 per cent. above the value of the same, and was totally without credit, and was greatly in need of money in order to further carry on the enterprise for which it was organized, without which money instant failure and collapse of the enterprise was certain; that the defendants C. C. Bickel, I. Frost, J. B. Ohligschlager, W. H. Labb, R. D. Bakrow, J. M. Sharp, E. Bakrow, and L. Simons were at the time of the making of said note stockholders and directors in said corporation, and directly and personally interested in its financial success; that in order to further the purposes of said corporation, and their own personal interests as stockholders therein, they sought to borrow the sum of $5,000 from plaintiff, and agreed to give therefore the note of the said company and to sign said note as sureties thereon; that plaintiff agreed to lend said sum upon the condition that said defendants would sign a note as sureties for the sum of $5,000, with interest at the rate of 6 per cent. from date; and that, in pursuance of said agreement, the note sued on herein was given and signed by defendants. The credit was given alone to said defendants, and at their request the proceeds were paid to the White City Company. Plaintiff further says that each of the defendants herein, C. C. Bickel, I. Frost, J. B. Ohligschlager, W. H. Labb, R. D. Bakrow, J. M. Sharp, E. Bakrow, and L. Simons, signed said note as surety before its delivery to plaintiff, the payee therein; that, although their names appear thereon where indorsers usually sign, the agreement, understanding, and intention of the parties at the time of the making of said note were that each of the defendants so signing on the back of said note should be liable thereon as surety for the payment thereof; that the principal on said note, the White City Company, and each of the other defendants herein, was equally and mutually interested in the purpose for which said money was borrowed, and for which said note was given, and that each of the defendants herein is primarily liable thereon."

It is earnestly insisted for the plaintiff that parol...