Meredith v. Pemberton

• Decision Date: 21 April 1913
• Citation: 156 S.W. 70,170 Mo.App. 100
• Parties: HUGH MEREDITH, Appellant, v. T. C. PEMBERTON, Respondent
• Court: Kansas Court of Appeals

156 S.W. 70

170 Mo.App. 100

HUGH MEREDITH, Appellant, v. T. C. PEMBERTON, Respondent

Court of Appeals of Missouri, Kansas City

April 21, 1913

Appeal from Adair Circuit Court.--Hon. Nat. M. Shelton, Judge.

Judgment affirmed.

Smoot & Cooley for appellant.

(1) Plaintiff having indorsed the note to the bank, on being compelled to pay same was re-invested with title thereto, and entitled to proceed thereon as though he had not negotiated it. Peers v. Kirkham, 46 Mo. 146; Keys v Keys, 217 Mo. 48; Fenn v. Dugdale, 31 Mo. 580. In Fenn v. Dugale it is held that the indorser's action can only be maintained upon the bill itself. In Keys v. Keys the same rule is announced, and the difference of relation between an indorser and a surety is pointed out. (2) The giving of renewal notes did not extinguish the original note nor plaintiff's right of action thereon. Lease v Goode, 67 Mo. 126. This was where new note was given with a new name as principal and one of the former principals as surety. Held debt not extinguished. In the case at bar, the original note was to be held till all renewals were paid. Hence, it was not extinguished nor was endorser released. Bank v. Rogers, 123 Mo.App. 569; see also Reynolds v. Mitchell, 106 Mo. 365.

Millan & Banning for respondent.

(1) A negotiable instrument is discharged by its intentional cancellation by the holder. R. S. 1909, sec. 10089. Cancellation of a note may be effected by writing or stamping words or lines upon its face, provided the instrument, by its condition, shows it has been cancelled. 4 Am. and Eng. Law (2 Ed.), 503; District of Columbia v. Cornell, 130 U.S. 633. To render inoperative the cancellation evidenced by the condition of the note in suit, appellant, even if he were the proper party to raise the point, would have to allege and prove that it was made unintentionally or under a mistake or without authority. R. S. 1909, sec. 10093. Any act which discharges a negotiable instrument discharges a person secondarily liable thereon. R. S. 1909, sec. 10090. (2) Where the act which discharges the instrument is done by the maker, whether it operates as a payment, discharge, or renewal of the old note, the maker alone acquires the right to the discharged note, and if the note is not discharged the title thereto remains in the holder. In neither case would the old note support a suit such as appellant has instituted. Bank v. Freund, 80 Mo.App. 657. (3) A valid agreement for an extension of time to the principal debtor without the consent of an indorser releases the latter. R. S. 1909, sec. 10090. (4) An indorser who pays the amount of a note on his contract of indorsement must recover from his indorser on the very note he is compelled to take up. Keys v. Keys, 217 Mo. 48. (5) The case having been tried to the court sitting as a jury, and a general verdict having been rendered on all the issues of fact without declarations of law being asked or given, the appellate court will not review the finding of the trial court on questions of fact. Jordan v. Davis, 172 Mo. 599.

OPINION

JOHNSON, J.

--Defendant Pemberton was the payee of a negotiable promissory note of which L. W. Boone was the maker. Before maturity Pemberton, for value, sold and indorsed the note to plaintiff who, in turn, sold and indorsed it before maturity to a bank. When the note fell due, Boone, Pemberton and plaintiff executed and delivered a renewal note to the bank. The bank accepted the new note and stamped the original "Paid" but did not return it to the maker Boone. When the renewal note matured a new note was given to the bank, signed and indorsed as the others and the second note was cancelled. Four such renewal notes were given successively and when the last one matured a new note executed by Boone as maker and plaintiff as surety was accepted by the bank in renewal of the last note which was cancelled. Plaintiff was compelled to pay this note after its maturity and, obtaining the original note from the bank, brought suit upon it against defendant on the theory that the original note had not been cancelled and extinguished by the renewal notes and that defendant is liable to him as his indorser. The principal defense in the answer is "that said first note was fully satisfied and discharged by said renewal note and no right of action thereon exists in favor of plaintiff or any other person."

A jury was waived and the court, after hearing the evidence, rendered judgment for defendant. No declarations of law were asked or given. Plaintiff appealed.

There is evidence in the record introduced by plaintiff which tends to support his contention that when the first note was renewed all the parties to the transaction agreed that the original note should not be regarded as paid and extinguished but this evidence is met by strong contradictory evidence.

The cashier of the bank introduced as a witness testified on direct examination: "When Meredith came and this renewal note was given they agreed I should hold the original note. That agreement was between the parties that signed it, indorsing the note to the bank. It was between Mr. Meridith, Mr. Boone and Mr. Pemberton. The agreement about my holding it, and what was said was for me to hold the note, as I remember it, Mr. Meredith suggested it and the other two said that was all right that I hold the original note until the renewals were paid. They at that time understood there was likely to be more. . . . They said at that time they expected it would have to be renewed again. It was to be held until the renewal notes were paid. I was to hold it for Mr. Meredith. It was at his suggestion."

On cross-examination he said: "When it (the original note) fell due, we took a renewal note, signed as the original note, for the same amount plus the interest. I don't remember the amount but if there was anything added to it, it was nothing only the interest. It was for the principal of the original note and accrued interest. Took a renewal note payable in ninety days as I remember. Took it in payment of the original note so far as we were concerned. We considered the old note, the original note, was paid and discharged as to us. It is stamped on the face of the note. That is our stamp."

Speaking of the transaction relating to the giving of the last note the witness said: "When the last renewal note fell due I don't remember what notice I gave. It is not a fact that I told Mr. Boone Mr. Pemberton had moved away from that vicinity and I would no longer look to him for pay on that note. We made that note out to ourselves. All the others had been made out payable to Pemberton and the Meredith Lumber Company, but this last note I wrote out myself and made it payable to the Bank at Gibbs, and gave it to Mr. Boone in person. I told Mr. Boone Mr. Pemberton had,--as I remember we had sent notice to both of them and Mr. Boone came in and I told him Mr. Pemberton...