Spire v. Spire

• Decision Date: 12 April 1919
• Docket Number: 21,801
• Citation: 104 Kan. 501,180 P. 209
• Parties: JOHN S. SPIRE, as Administrator, etc., Appellee, v. M. B. SPIRE et al., Appellees, and THE J. I. CASE THRESHING MACHINE COMPANY, Appellant
• Court: Kansas Supreme Court

180 P. 209

104 Kan. 501

JOHN S. SPIRE, as Administrator, etc., Appellee, v. M. B. SPIRE et al., Appellees, and THE J. I. CASE THRESHING MACHINE COMPANY, Appellant

No. 21,801

Supreme Court of Kansas

April 12, 1919

Decided January, 1919.

Appeal from Chautauqua district court; ALLISON T. AYRES, judge.

Judgment reversed and cause remanded.

SYLLABUS

SYLLABUS BY THE COURT.

PROMISSORY NOTE--Payment by Maker--Surety for Comaker--Subrogation. The maker of a promissory note, in fact surety for his comaker is not entitled, on paying the note, to be subrogated to chattel security held by the payee, to the prejudice of other liens on the chattel held by the payee to secure other obligations of the comaker.

S. H. Jones, of Sedan, J. S. Kirkpatrick, O. D. McCollum, and H. M. Kirkpatrick, all of Kansas City, Mo., for the appellant.

J. A. Ferrell, of Sedan, for the appellee.

OPINION

BURCH, J.:

The action was one by the administrator of the maker of two promissory notes, who was in fact surety for his comaker, for reimbursement, after payment of the notes, and for subrogation to chattel security held by the payee. The plaintiff recovered, and the payee, who held other liens on the chattels to secure other obligations of the comaker, appeals from the decree of subrogation.

The notes were the last of a series of five given to the machine company for the price of farm machinery, and were secured by mortgage on an engine which was part of the machinery sold. The notes were signed by Ambrose Spire as maker, who also signed the accepted order for the machinery and the mortgage. Ambrose Spire in fact lent his name to enable his son, M. B. Spire, who signed all the instruments mentioned, to purchase the machinery. M. B. Spire paid three of the notes, but in other dealings with the machine company incurred other obligations which he secured by a second and a third mortgage on the engine. Ambrose Spire died, and after the maturity of the unpaid notes they were presented and allowed as a claim against his estate. The administrator paid the claim, and the machine company discharged the mortgage of record. The administrator, claiming right of subrogation, attempted to keep the mortgage alive by filing a renewal affidavit. There was evidence for the machine company that it refused to accept M. B. Spire's sole order for the machinery; that the order which was approved was accepted because of Ambrose Spire's signature; and that credit was subsequently extended to M. B. Spire on the second and third mortgages because Ambrose Spire was depended on for payment of the notes secured by the first mortgage. M. B. Spire is bankrupt. The judgment was that the administrator recover from M. B. Spire, and that the administrator have a first lien on the engine.

The judgment was rendered in disregard of the statute fixing the relation of Ambrose Spire to the payee of the notes, and the brief of the administrator completely ignores the decisions of this court interpreting the statute. Ambrose Spire signed the notes as maker. His obligation to the machine company was measured by the terms of the instrument which he signed. The debt was his. He was principal debtor, primarily liable under the negotiable-instruments law (Bank v. Jeltz, 101 Kan. 537, 167 P. 1067; Bank v. Hoyt, 103 Kan. 44, 172 P. 994; Lonnon v. Batchman, 103 Kan. 266, 173 P. 415.) The evidence concerning suretyship merely established the relation of Ambrose Spire to his comaker. It was without force to modify the relation of Ambrose Spire to the machine company--the relation of maker established by his signature and the negotiable-instruments law. (Bank v. Jeltz, supra.) The administrator cites none but old cases from the American decisions and American reports. The provisions of the statute are too simple and too plain to require interpretation, and the court has no function to perform but to apply them. A person not desiring to become principally and primarily liable may indicate the capacity in which he desires to be bound, or he may decline to sign. Having signed as maker before delivery of the instrument, he is bound as maker, and, in the absence of fraud, accident, or mistake, cannot show liability in any other capacity.

Being a maker, who was primarily and absolutely bound to pay the notes according to their tenor, Ambrose Spire was, as between himself and the payee, a principal debtor, and payment by his administrator discharged the notes. (Negotiable-instruments Law, § 126, Gen. Stat. 1915, § 6647.) Discharge of the notes discharged the lien of the mortgage. It was then the duty of the mortgagee to enter a release of the mortgage on the...