Keokuk County State Bank v. Hall

• Decision Date: 22 October 1898
• Citation: 76 N.W. 832,106 Iowa 540
• Parties: THE KEOKUK COUNTY STATE BANK v. EUNICE HALL, Appellant
• Court: Iowa Supreme Court

76 N.W. 832

106 Iowa 540

THE KEOKUK COUNTY STATE BANK v. EUNICE HALL, Appellant

Supreme Court of Iowa, Des Moines

October 22, 1898

Appeal from Keokuk District Court.--HON. D. RYAN, Judge.

THIS action is founded upon a promissory note. The answer, with its several amendments, sets up defenses, the substance of which may be thus stated: Defendant signed the note in suit together with one A. L. Hill, who was at the time a minor. Defendant was a surety only, although her name appears as a joint maker. The note was given to the firm of Skinner Bros as part of the price of a livery stock purchased from said firm by Hill. It is further averred that Hill was induced to make such purchase by the fraudulent representations and concealments of said Skinner Bros.; that there was a failure of consideration; that, upon attaining his majority, Hill disaffirmed the contract; and that plaintiff is not a bona fide holder of said note. After the testimony was all in under the direction of the court, the jury returned a verdict for plaintiff. From the judgment rendered thereon defendant appeals.

Reversed.

C. M. Brown and Woodin & Son for appellant.

A. G. Schulte and J. P. Talley for appellee.

OPINION

WATERMAN, J.

The note was transferred to the plaintiff by the following endorsement: "This note is hereby assigned to S.W. Brunt, cashier, as collateral security on our note or notes, and we hereby waive demand, notice, protest, and all legal formalities of every kind. Skinner Bros." Brunt was cashier of plaintiff bank, and it claims to own the note under this indorsement, and the claim is not disputed. It does not appear that any new consideration was given by the bank or any additional responsibility incurred. So far as shown, it took the note as further security only, for a pre-existing debt of Skinner Bros. Under these circumstances, it is not a bona fide holder. Trustees v. Hill, 12 Iowa 462; Ryan v. Chew, 13 Iowa 589; Ruddick v. Lloyd, 15 Iowa 441; Bank v. Barber, 56 Iowa 559, 9 N.W. 890; Bone v. Tharp, 63 Iowa 223, 18 N.W. 906.

II. On the trial Hill was a witness for defendant, and was asked this question: "State whether or not, upon your arriving at majority, about the 1st of February, 1896, you rescinded the contract entered into on the 9th day of September, 1895 and delivered back to Skinner Bros. all the property that you received or had in your possession when you arrived at the age of majority." This was objected to by plaintiff as immaterial, and the objection was sustained. Two other questions, relating to the disaffirmance of the contract by Hill, were objected to on like grounds, and the objections sustained. These rulings were duly excepted to, and error is assigned on the court's refusal to admit the evidence, which the questions indicate was called for. It is alleged in the answer, as we have already said, that Hill, on attaining his majority, disaffirmed the contract, and returned the property purchased to Skinner Bros., who received and kept the same. The general rule is that where a party becomes surety for an infant he is bound, though his principal is not. Jones v. Crosthwaite, 17 Iowa 393; Allen v. Berryhill, 27 Iowa 534; 1 Brandt Suretyship, section 153. But to this as to most other rules there are exceptions. When the principal disaffirms the contract, and returns the consideration received under it, the surety is thereby discharged. 1 Brandt...