National Bank of Commerce v. Kenney

• Citation: 80 S.W. 555
• Parties: NATIONAL BANK OF COMMERCE v. KENNEY et al.<SMALL><SUP>*</SUP></SMALL>
• Decision Date: 09 April 1904
• Court: Court of Appeals of Texas

Page 555

80 S.W. 555

NATIONAL BANK OF COMMERCE v. KENNEY et al.^*

Court of Civil Appeals of Texas.

April 9, 1904.

Appeal from District Court, Hemphill County; B. M. Baker, Judge.

Action by the National Bank of Commerce against P. W. Kenney and others. Judgment for defendants. Plaintiff appeals. Affirmed.

H. E. Hoover and Elijah Robinson, for appellant. I. N. Watson, C. H. Kohler, and Tempel & Hardy, for appellees.

STEPHENS, J.

Appellant, a national bank of Kansas City, Mo., declared on a promissory note for $7,259.80, dated Canadian, Tex., November 29, 1899, due 180 days after date, signed by J. H. Kenney as principal, and P. W. Kenney and J. W. Lambert as irregular indorsers, payable at Kansas City, Mo., to the order of Ladd, Penny & Swazey, to whom it had been delivered at their office in Kansas City, Mo., by the makers, who were citizens of Texas, secured by a duly registered chattel mortgage on cattle in Texas, which mortgage appellant sought to foreclose. Ladd, Penny & Swazey seem to have delivered the note to appellant, though without indorsement, as collateral security for a pre-existing loan of $50,000, most of which remained unpaid at the institution of this suit; Ladd, Penny & Swazey having become insolvent. In February, 1900, at the instance of Ladd, Penny & Swazey, and for reasons given by them, a new note, dated February 8, 1900, but differing in no other respect from the one declared on, secured by chattel mortgage on the same cattle, was executed by the Kenneys and Lambert as a substitute for the first note. February 19, 1900, this note was sold, indorsed, and delivered by Ladd, Penny & Swazey to the Third National Bank of Springfield, Mass., one of the appellees. It was not conclusively shown when the note declared on came into appellant's hands, for, while there was evidence tending to show that this occurred prior to the substitution, there was also cogent evidence to the contrary. But however this may be, it was conclusively established by the evidence that neither the makers nor the indorsee of the new note had any notice that appellant held or claimed the old note until long after the substitution and sale of the new one.

In no view of the case was appellant entitled to recover unless the instrument declared on was a negotiable promissory note, since, both according to the Missouri statutes read in evidence and the Texas statutes, if it was nonnegotiable, it was subject to every defense which it would have been subject to in the hands of Ladd, Penny & Swazey; appellant having failed to give any notice of the alleged assignment to it until long after the substitution and sale of the new note, the effect of which was to destroy the old one. The negotiable quality of the note is denied because it contained this provision: "The makers and endorsers hereof hereby severally waive protest and nonpayment in case this note is not paid at maturity, and agree to all extensions and partial...