Gannon v. Bronston
| Decision Date | 16 December 1932 |
| Citation | 246 Ky. 612 |
| Parties | Gannon v. Bronston. |
| Court | United States State Supreme Court — District of Kentucky |
3. Bills and Notes. — As between payee and maker, note was subject to same defenses as if nonnegotiable (Ky. Stats. sec. 3720b-58).
4. Partnership. — Novation whereby payee released one of partners from liability on partnership note in consideration of partner surrendering interest in partnership held not to release co-makers agreeing thereto.
5. Frauds, Statute of. — Oral agreement of two partners to pay partnership note on payee's release of third partner in surrendering interest in partnership held not void as oral agreement to pay another's debt .
By the agreement in which payee released one of partners from liability on partnership note and two remaining partners agreed to pay note, such partners did not undertake to pay another's debt within Ky. Stats. sec. 470, subsec. 4, requiring agreement therefor to be in writing, but they merely consented that retiring partner might be released from joint obligation on the note on which each partner and maker was liable for the whole thereof, and on which payee could have singled out any one of three makers and sued him and obtained judgment for whole thereof.
6. Partnership. — Payee's oral release, supported by consideration, of one of makers of partnership note, as distinguished from "renunciation," held valid, though note was not surrendered .
The word "renunciation," as used in Ky. Stats. sec. 3720b-122, means, in general, the act of giving up a right, of renouncing, or giving up something possessed, the legal act by which a person abandons a right acquired, but without transferring it to another, and it imports a gratuitous abandonment or giving up of rights, an express waiver without consideration, and does not import release or discharge for valuable consideration.
7. Bills and Notes. — Negotiable Instruments Law is codification, compilation, or restatement of pre-existing law.
8. Bills and Notes. — Negotiable instrument may be discharged by oral agreement supported by consideration, or by renunciation without consideration if renunciation is in writing, or, if oral, by surrendering instrument .
9. Bills and Notes. — Repeal of all laws inconsistent with Negotiable Instruments Law, not only repeals such statutes, but also destroys force of inconsistent judicial opinions (Ky. Stats. sec. 3720b-195).
Appeal from Fayette Circuit Court.
L.G. CAMPBELL for appellant.
L.F. ZERFOSS for appellee.
OPINION OF THE COURT BY DRURY, COMMISSIONER.Affirming.
Appellant sued Bronston upon a note; he was unsuccessful, and has appealed. This is the note sued on:
The petition is in proper form, and demurrer to it was properly overruled.
Bronston in his answer admitted the execution of the note; then said, in substance: That he and the two Fosters were partners engaged in the retail meat business, and they had executed this note to Gannon for stock sold the partnership; that shortly after its maturity this partnership got into financial difficulties and these partners were contemplating bankruptcy; that it was then agreed among them and with Gannon for Bronston to surrender his interest in the meat business to the Fosters and to retire from the partnership, for the Fosters to continue the business and to assume and pay the whole of this note, and for Gannon to so accept them and to release Bronston from all obligation on this note. His answer concludes as follows:
From this it will be seen Bronston is pleading a release from obligation on this note, and is pleading that Gannon is estopped to assert same against him. Bronston does not use the word "estoppel" in this plea, but he does plead facts which, if true, would constitute an estoppel.
Gannon's demurrer to this answer was overruled, and this he alleges was error, because, as he contends, the execution of this release was not alleged to have been done with the formality required by section 3720b-122, Ky. Stats., which we will discuss later.
In the first paragraph of his reply, Gannon denied everything asserted in the answer, and in a second paragraph he pleaded:
"That he never at any time received from the defendant any consideration for the alleged so-called release, and it is not, and was not in writing, and is therefore invalid, and void in law, nor was the note sued on delivered up."
Bronston denied Gannon's plea of no consideration, and the case went to trial before a jury. The witnesses for the defense were Bronston and Fred D. Foster, and their testimony supported all the allegations of the answer. Gannon was the sole witness for himself. In his testimony, he denied everything testified to by witnesses for the defense, denied having had anything to do with getting Bronston out of this partnership, but said the first he knew of Bronston's retirement was on one Monday morning about May 15, 1916, when he asked about Bronston, and was told by Mr. P.D. Foster, "We got rid of him." He testified that the Fosters continued the business until September 1, 1917, then turned the shop over to him, that on October 17, 1917, the Fosters went into bankruptcy, and he had never received anything on this note from either of the Fosters or from Bronston, nor had he sought to make Bronston pay it until he filed this suit on September 9, 1930, although Bronston lived in the same town with him all that time.
The court gave the jury this instruction:
"The jury will find for the plaintiff T.F. Gannon in the sum of $500.00, with interest at six per cent. from November 15, 1915; unless you believe from the evidence that the plaintiff Gannon agreed with the defendant Bronston to accept P.D. Foster and Fred D. Foster as obligors and discharged Bronston, from further liability on said note."
The jury found for Bronston. Gannon's motion for a judgment notwithstanding the verdict was overruled, and thereupon he filed a motion for a new trial, upon that and divers other grounds, which was also overruled. All of these grounds are in essence merely different ways of saying this: Admitting Bronston and the Fosters as partners owed Gannon $500, an indebtedness they had contracted in the conduct of a retail meat business, and if it be true that the partners were not getting along harmoniously, were in financial difficulties, were contemplating bankruptcy, and at a meeting of the partners and Gannon it was orally agreed, if Bronston would surrender his interest and get out, that Gannon would release him and look to the Fosters for payment of the note and the Fosters agreed to this and undertook to pay the note, but after 15 1/2 months of effort failed and have been discharged in bankruptcy, this release of Bronston is not valid for two reasons: First, because there was, so he says, no consideration moving to Gannon for making it; and, second, because the note was not then surrendered to either Bronston or the Fosters, nor was this release evidenced by any writing whatever. Based on this, Gannon contends the court erred in overruling his demurrer to Bronston's answer because Bronston had not alleged that Gannon's agreement to release him was in writing, erred in overruling his motion for a directed verdict because Bronston did not allege or prove this alleged agreement was in writing, and erred in overruling his motion made under section 386 of the Code of Practice in Civil Cases for a judgment notwithstanding the verdict because, Bronston having failed to allege this agreement to release him was in writing, the pleadings, as Gannon construes them, entitle him to a judgment.
Consideration for making this agreement sufficiently appears in both the pleadings and the proof. It is true Gannon got no money by it, but he got what he wanted; he got what he bargained for; he got Bronston out of this partnership, which he then hoped would result in such restoration of harmony that the Fosters would make a success of it and would be able to pay his note.
Gannon is alleged to have released Bronston in return for Bronston's retirement from the partnership then existing...
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...to renunciation in connection with negotiable instruments. See English v. Evans, Mo.App., 157 S.W.2d 793, 795; Gannon v. Bronston, 246 Ky. 612, 55 S.W.2d 358, 362, 86 A.L.R. 324. In 96 C.J.S. Wills Sec. 1151, p. 951, it is said: 'A consideration is not essential to the validity of a disclai......