Knight v. Kerfoot

• Decision Date: 19 November 1915
• Docket Number: 22,982
• Citation: 110 N.E. 206,184 Ind. 31
• Parties: Knight v. Kerfoot et al
• Court: Indiana Supreme Court

110 N.E. 206

184 Ind. 31

Knight v. Kerfoot et al

No. 22,982

Supreme Court of Indiana

November 19, 1915

From Clay Circuit Court; James L. Clark, Special Judge.

Action by George A. Knight against Mary G. Kerfoot and another. From a judgment for defendants, the plaintiff appeals. (Transferred from the Appellate Court under § 1394 Burns 1914, Acts 1901 p. 565.)

Affirmed.

Baker & Daniels, Sullivan & Knight, Lamb, Beasley, Douthitt & Crawford, McNutt, Wallace & Sanders, A. W. Knight and Edward H. Knight, for appellant.

C. G Scofield and S. A. Hays, for appellees.

OPINION

Morris, J.

Suit in equity by appellant against appellees. The complaint is in four paragraphs. The first and second are based on the theory of contribution, and seek to recover judgment against appellee, Mary G. Kerfoot, and to set aside an alleged fraudulent conveyance. The third and fourth paragraphs each seek a recovery against Mary G. Kerfoot on the theory of partial indemnity, and contribution, and to set aside an alleged fraudulent conveyance. Each appellee answered by general denial and appellee, Mary G. Kerfoot filed a second paragraph, addressed to the entire complaint. The court overruled appellant's demurrer to this paragraph and error is assigned on this ruling, but we are of the opinion that it constituted no reversible error. The issues were tried by the court, with special findings of fact and conclusions of law. Judgment was rendered in favor of appellees. Appellant's motion for a venire de novo and for a new trial, which averred that the court's decision was contrary to law and not supported by sufficient evidence, were each overruled.

Error is assigned on the conclusions of law and overruling the two motions. The finding of facts, and conclusions of law, are as follows: "(1) On and prior to the 10th day of May, 1907 George Gordon Kerfoot was engaged in the hardware business as a general merchant in the city of Brazil, Indiana. The defendant, Mary G. Kerfoot, is the mother of said George Gordon Kerfoot and was on said date a widow and every since said date has been unmarried. The plaintiff is and was on said date the father-in-law of said George Gordon Kerfoot. Said George Gordon Kerfoot was on said date and at all times since largely in debt and insolvent. He was at all times since said date and until he was adjudged a bankrupt on the 25th day of February, 1909, the owner of a stock of hardware of the value of from five thousand to ten thousand dollars, but at no time did he possess property sufficient to pay all his debts. On said date, May 10, 1907, he owed the plaintiff a large sum of money and was indebted to one or more banks in the sum of about four thousand dollars, evidenced by various notes on which defendant, Mary G. Kerfoot, was his surety. (2) On said 10th day of May, 1907, said George Gordon Kerfoot being pressed by his creditors, and unable to meet their demands, negotiated two loans of five thousand dollars each, one from the First National Bank of Brazil and one from the Riddell National Bank of Brazil, and he executed his two notes, one to each of said banks for $ 5,000 with the plaintiff, George A. Knight, and the defendant, Mary G. Kerfoot, as his sureties on each of said notes. Each of said notes was due in six months. On the 11th day of November, 1907, the note at the First National Bank was renewed by executing a new note for $ 5,000 due in six months with George A. Knight and Mary G. Kerfoot as sureties and said George Gordon Kerfoot as principal. On May 11, 1908, a loan of $ 5,000 was negotiated by said George Gordon Kerfoot from the Citizens National Bank of Brazil and his note executed to said bank for said sum due in ninety days with George A. Knight and Mary G. Kerfoot as his sureties, and $ 4,500 of said new loan was applied on the payment of said note to said First National Bank and the remaining $ 500 due said bank on said note was afterwards paid by said Kerfoot. On the 11th day of November, 1907, the note at said Riddell National Bank was renewed by the execution of a new note for $ 5,000 due in sixty days with said George Gordon Kerfoot as principal and said George A. Knight and Mary G. Kerfoot as sureties. At the maturity of said last note said George Gordon Kerfoot paid $ 500 thereon and gave his note for $ 4,500 in renewal of the balance of said amount with said George A. Knight and Mary G. Kerfoot as his sureties. On the 10th day of April, 1908, at the maturity of said $ 4,500 note said George Gordon Kerfoot was unable to pay the same or the advance interest on a renewal thereof and he executed his note to said bank for $ 4,600 due in four months with said George A. Knight and Mary G. Kerfoot as his sureties, being in renewal of said $ 4,500 note and for a new loan of $ 100, a part of which was applied to the payment of interest in advance. So that on the 10th day of August, 1908, said George Gordon Kerfoot owed said two banks the sum of $ 9,600 as evidenced by said two notes executed by himself as principal and said George A. Knight and Mary G. Kerfoot as his sureties thereon. Each of said notes last referred to were negotiable promissory notes and bore interest at the rate of six per cent per annum before maturity and eight per cent per annum after maturity, and were payable without any relief from valuation or appraisement laws and the drawers and endorsers severally waived presentment for payment, protest and notice of protest and nonpayment of said notes. (3) On the 10th day of August, 1908, said George Gordon Kerfoot owned a stock of hardware of the value of from $ 5,000 to $ 10,000, but was insolvent and unable to pay his debts and had no available funds to apply on either of said notes. Neither he nor his sureties had any valid defense to said notes and the holders of said notes were demanding payment thereof. He made an effort to again renew said notes and requested the said Mary G. Kerfoot to again become surety with said Knight on renewal notes for said outstanding notes and she refused to sign or become surety on any notes for the renewal of said notes or for any sum or purpose whatever. At that time said Mary G. Kerfoot was possessed of sufficient property, including that conveyed to her codefendant, to enable her to pay all of her liability on said notes. Upon the refusal of said Mary G. Kerfoot to become surety for any renewal of said notes said George Knight was informed of such refusal, and to prevent suit on said notes, and because of the insolvency of said George Gordon Kerfoot, said Knight alone became surety for said George Gordon Kerfoot on two notes, one to the Citizens National Bank for $ 5,000 with said Kerfoot as principal and Knight as surety, dated August 10, 1908, and due in three months in renewal of said note held by said bank and one to the Riddell National Bank for $ 4,600, with said Kerfoot as principal and Knight as surety and due in three months in renewal of said note held by said bank. Said note to said Citizens National Bank was delivered by said Kerfoot to said bank in payment of said old note and said old note was by said bank marked paid and delivered to said Kerfoot and by him delivered to said Knight. Said note to said Riddell National Bank was delivered by said Kerfoot to said bank in payment of said old note and after consultation with said Knight by an officer of said bank was accepted by said bank and said old note marked paid and delivered to said Knight, and said Knight has ever since retained possession of both of said notes. Said Kerfoot paid the interest in advance on said new notes. (4) At the time of the making and acceptance of each and all of said notes executed by said George Gordon Kerfoot as principal and said George A. Knight and Mary G. Kerfoot as sureties and by said George Gordon Kerfoot as principal and said George A. Knight as surety the officers of said banks accepting said notes understood that said George Gordon Kerfoot was insolvent and they believed that the sureties or surety on said notes would eventually have said notes to pay and they accepted said notes because of the financial standing of the sureties or surety. At the time of the execution of said new notes by said George Gordon Kerfoot and said Knight on the 10th day of August, 1908, and the using of said notes in renewal of said old notes, said Knight and said Mary G. Kerfoot each knew that said George Gordon Kerfoot was insolvent and unable to pay said notes and that at that time he was unable to pay any part thereof, and said Knight understood and believed that he would have said new notes to pay in full as surety and he at that time intended to hold said Mary G. Kerfoot responsible to him as cosurety in contribution on said old notes so taken up by said new notes executed by said George Gordon Kerfoot and said Knight alone. Said Mary G. Kerfoot did not advise or consent to the making of said new notes by said George Gordon Kerfoot and said Knight, nor did she make any objection thereto. (5) On the maturity of said last notes said Kerfoot as principal and said Knight as surety again renewed said notes for a period of three months by executing new notes, the note to said Riddell National Bank being for $ 4,700 and including a new loan of $ 100. Said Kerfoot with said new loan of $ 100 and other funds paid the interest in advance to maturity on said new notes. When said last renewal notes of said Kerfoot and Knight matured said Knight paid each of them by executing his individual notes, which he in a short time paid in full in cash, the said Kerfoot paying no part thereof. (6) On the 25th day of February, 1909, said George Gordon Kerfoot was adjudged a voluntary bankrupt in the District Court of the United States for the District of Indiana. When the said Knight paid...