Rocky Mountain Nat. Bank v. McCaskill

• Decision Date: 07 May 1891
• Citation: 16 Colo. 408,26 P. 821
• Parties: ROCKY MOUNTAIN NAT. BANK et al. v. McCASKILL et ux.
• Court: Colorado Supreme Court

26 P. 821

16 Colo. 408

ROCKY MOUNTAIN NAT. BANK et al. v. McCASKILL et ux.

Supreme Court of Colorado

May 7, 1891

Commissioners' decision. Appeal from district court, Arapahoe county.

This was a suit in equity, brought by appellees against appellants, to set aside, declare void, and cancel two promissory notes and a trust-deed upon certain lands in the state of Kansas, executed by appellees to secure the payment of the notes. For many years prior to the summer of 1885 one William M. Roworth was a merchant doing an extensive business in Central City in this state. About the year 1870, Roworth and appellee John McCaskill formed a partnership for the purpose of breeding, raising, and dealing in cattle. By the terms of the contract of partnership McCaskill, who had very limited means, was to take charge of and give his attention to the business for a certain interest, and Roworth was to furnish the necessary money. The business was prosecuted for some years in Colorado under the firm name of Roworth &amp McCaskill, was then transferred to Chase county in the state of Kansas, where the business was prosecuted under the same name, and was there continued until some date not definitely fixed but prior to June, 1885, when the partnership was dissolved, and the business continued in the name of John McCaskill. Roworth was at all times a borrower of money in the conduct of his business; for years had done business with and been a borrower from the appellants the Rocky Mountain National Bank of Central City and the Colorado National Bank of Denver, by both of which he was usually carried for quite large sums; his notes at each of said banks being renewed from time to time, and the indebtedness continued almost indefinitely. On the 28th day of July, 1885, Roworth was indebted to the Rocky Mountain National Bank on a note of another person, the payment of which he had guarantied, and which he had discounted, in the sum of about $4,500, and for overdrafts in about $1,500, in settlement of which he made the following note: '$6,000. Central City, Colo., July 28, 1885. On demand, after date, we promise to pay to the order of Wm. M. Roworth, six thousand dollars at the Rocky Mountain National Bank, with interest at one per cent. a month from date until paid. ROWORTH & McCASKILL. Value received, No. 7,675.' And on the back of said note is the following indorsement: 'For and in consideration of the sum of ten cents, the receipt whereof is hereby acknowledged I hereby guaranty the payment of the within note, waiving demand and notice of non-payment and protest; and agree to pay all costs and expenses paid or incurred in collecting the same. WM. M. ROWORTH.' On June 30, 1885, Roworth was indebted to the Colorado National Bank of Denver in the sum of $5,000, which had been of long standing, and frequently renewed, each time previously by his individual note, and on that date he gave to the bank the following note, and took up his own: '$5,000. Denver, Colorado, June 30th, 1885. One day after date we promise to pay to the order of the Colorado National Bank of Denver five thousand dollars at the Colorado National Bank of Denver, with interest at one per cent. per month from date until paid. ROWORTH & McCASKILL. WM. M ROWORTH. Value received. No. 42,626.' Shortly after this Roworth failed. On the 31st day of August, 1885, Roworth, T H. Potter, of the Rocky Mountain National Bank, and the attorney of the Colorado National Bank were at the place of residence of appellees in Kansas, to obtain from McCaskill security for the payment of the two notes due, respectively to the two banks. Roworth had an interview with McCaskill, informed him of the existence of the notes, stated that he was embarrassed, needed help, and urged McCaskill to secure the two notes, and assist him in that way. McCaskill consented, met the agents of the banks, executed his notes, payable one year after date, for the sums respectively due on the former notes the note for the sum due the Rocky Mountain National Bank being made payable to Potter, and the sum due the Colorado National Bank made payable to Kountze, its president; both notes being secured by trust-deed on the lands of appellees in Kansas, William B. Berger being named as trustee; and the former notes were canceled. At the same time Roworth executed and delivered to McCaskill his note for $12,000, to cover the indebtedness assumed and secured by McCaskill. It is alleged in the complaint that before the notes of June 30th and July 28th were made the firm of Roworth & McCaskill had been dissolved; that Roworth never had authority to make notes in the name of the firm; that the indebtedness for which the notes were given was the individual indebtedness of Roworth; and that such fact was known to the defendants at the time, and that Roworth executed the notes of the firm at their solicitation and instance, they having full knowledge that the indebtedness was not that of the partnership. Also that the two notes of McCaskill and the trust-deed were obtained by fraud and by...