State National Bank v. Bay

• Citation: 64 P. 596,62 Kan. 692
• Decision Date: 06 April 1901
• Docket Number: 11,805
• Parties: THE STATE OF KANSAS NATIONAL BANK v. C. M. BAY
• Court: United States State Supreme Court of Kansas

64 P. 596

62 Kan. 692

THE STATE OF KANSAS NATIONAL BANK v. C. M. BAY

No. 11,805

Supreme Court of Kansas

April 6, 1901

Decided January, 1901.

Error from Reno district court; M. P. SIMPSON, judge.

Judgment affirmed.

Houston & Brooks, for plaintiff in error.

H Whiteside, for defendant in error.

OPINION

DOSTER, C. J.:

This was an action by the Kansas National Bank against C. M. Bay on a promissory note. Judgment went for the defendant. The plaintiff has prosecuted error to this court. The note sued on read as follows:

"$ 5577.50. WICHITA, KANSAS, October 8, 1898.

"One hundred and twenty days after date, I promise to pay to the order of W. W. Graves & Co. five thousand five hundred and seventy-seven and 50/100 dollars, for value received, negotiable and payable, without defalcation or discount, at the Kansas National Bank of Wichita, Kansas, with interest at the rate of 10% per annum from November 8, 1898, interest payable annually. No. --. Due Feb. 8, 1898.

H. R. SLOAN.

By C. M. BAY, Attorney in fact."

The petition averred that the defendant, Bay, under the name and style of H. R. Sloan, executed and delivered the note, and that the amount of it was due from the defendant Bay, doing business as H. R. Sloan; wherefore judgment was demanded against said Bay.

The facts were that Bay was doing his own business under the name of Sloan, and that, as a cover for his transactions, he had procured a power of attorney from Sloan. However, that instrument did not confer on him the power to execute promissory notes. He bought cattle from W. W. Graves & Co., and, to evidence the purchase-price, executed to them two promissory notes, in form similar to the one in suit. To secure these notes, he executed in Sloan's name a first and a second chattel mortgage on the cattle. These notes and mortgages were negotiated to the Kansas National Bank. At the time they were taken by the bank, Bay explained to its president that he was doing business in the name of Sloan under a power of attorney. The bank accepted the notes and mortgages but required Bay to furnish it with a copy of the power of attorney. The cattle seemingly were taken under the first mortgage to pay one of the notes. This left the other one in the hands of the bank. It was held there as collateral security to an indebtedness due the bank from Graves & Co. The bank desired its renewal and sent Graves, as its agent, to procure the renewal. As a renewal, Graves secured the note in suit and indorsed it to the bank. He tried to induce Bay to assume personal responsibility on the note by signing his own name to it. Bay refused to do this.

There is no question but that the transaction for which the notes were given was Bay's individual business but he fully explained to the bank president and to Graves & Co. that he was not doing business in his own name; that he could not do so because of indebtedness held against him. There is no claim of deception or fraud practiced by Bay. His admission that he was conducting his own business in the name of another and his reasons for doing so were...