Niotaze State Bank v. Cooper

• Decision Date: 10 February 1917
• Docket Number: 20628
• Citation: 99 Kan. 731,162 P. 1169
• Parties: NIOTAZE STATE BANK v. COOPER ET AL.
• Court: Kansas Supreme Court

162 P. 1169

99 Kan. 731

NIOTAZE STATE BANK v. COOPER ET AL.

No. 20628

Supreme Court of Kansas

February 10, 1917

Syllabus by the Court.

Rule applied that one of the makers of a negotiable instrument being a party primarily liable, is not released from liability by an extension of the time of payment without his assent, although his relation to a comaker be that of surety.

Rule applied that renewal notes do not pay the note renewed without an express agreement to that effect.

The evidence considered, and held to show renewals only and not payment.

Appeal from District Court, Chautauqua County.

Action of replevin by the Niotaze State Bank against W. O. Cooper and another. Judgment for plaintiff, and defendants appeal. Affirmed.

J. W. Mertz, of Sedan, for appellants.

W. H. Sproul, of Sedan, for appellee.

OPINION

BURCH, J.

The action was one of replevin, brought by a chattel mortgagee, to obtain possession of property covered by the mortgage. The plaintiff prevailed, and the defendants appeal.

The defense of W. O. Cooper was that the note secured by the chattel mortgage had been paid. The defenses of Lou Cooper were: First, that the debt secured by mortgage had been paid; and, second, that she was the owner of the property, that she signed the note secured by the mortgage and the mortgage as surety for her husband, W. O. Cooper, and that she and her property had been discharged by extensions of the note granted her husband without her assent. The burden of proof rested on the defendants. At the conclusion of their evidence, the plaintiff demurred to it. The court overruled the demurrer, and directed the plaintiff to introduce its evidence, but stated that the plaintiff would then be heard on the demurrer. At the conclusion of the evidence, the court instructed the jury as follows:

"3. Under the provisions of said chattel mortgage which provides that it is understood and agreed that this mortgage shall cover any renewals of this debt in whole or in part, the court is of the opinion that there is only one issue in this case for the jury to determine, and that is whether or not the original debt secured by the mortgage and under which possession is sought to be taken by the plaintiff in this case of the property therein described has been actually paid by the defendants to the plaintiff, and upon this the burden of proof is upon the defendants, and before they can defeat the action of the plaintiff for the possession of this property they must prove by a preponderance of the evidence that this indebtedness has been paid.

4. And in this case you are instructed that before you can find that the giving of renewal notes by the defendant Cooper to the bank is and constitutes a payment, you must find from all of the facts and circumstances surrounding this case that it was the intention of the parties and agreed by them that the intention of these subsequent notes or some of them was to and did operate as a payment of the original debt."

A verdict was returned for the defendants. Afterwards the court set aside the verdict and sustained the demurrer to the evidence.

The provision of the chattel mortgage referred to in the third instruction reads as follows:

"It is understood and agreed that this mortgage shall cover any renewals of this debt in whole or in part."

It is not necessary to determine the effect of this provision of the mortgage on the rights of the parties. Without such a provision, a mortgage ordinarily continues to secure an unpaid debt, although renewal notes may have been given. Cooper v. Condon, 15 Kan. 572, 578; Capital Co v. Merriam, 60 Kan. 397, 402, 56 P. 757. However this may be, Lou Cooper signed the note as one of the makers. Under the provisions of section 3 of the Negotiable Instruments Act, she was a party primarily liable. Gen. Stat. 1909, § 5249. Under the provisions of sections 126 and 127 of the Negotiable Instruments Act (Gen. Stat. 1909, § § 5372, 5373), only parties secondarily liable are discharged by renewal without their assent (Bank v. Bowdon, ...