Sunflower State Bank v. Bowman

• Decision Date: 12 June 1922
• Docket Number: No. 14373.,14373.
• Citation: 243 S.W. 403
• Parties: SUNFLOWER STATE BANK v. BOWMAN.
• Court: Missouri Court of Appeals

243 S.W. 403

SUNFLOWER STATE BANK v. BOWMAN.

No. 14373.

Kansas City Court of Appeals. Missouri.

June 12, 1922.

Rehearing Denied July 3, 1922.

Appeal from Circuit Court, Jackson County; Thad B. Landon, Judge.

"Not to be officially published."

Suit by the Sunflower State Bank against E. P. Bowman. From a judgment for defendant, plaintiff appeals. Affirmed.

Kirkpatrick, McCollum & Kirkpatrick, of Kansas City, for appellant.

Blackmer & Bundschu, of Kansas City, and Souders & Souders, of Wichita, Kan., for respondent.

ARNOLD, J.

This is a suit to recover of and from an indorser of a promissory note an unpaid balance due thereon.

Plaintiff is a banking institution operating under a charter from the state of Kansas, and conducting a bank at Wichita in said state. Defendant was a stockholder and director in, and president of, the Bowman-Brown Company, a corporation doing business in Wichita as retail dealers in women's ready-to-wear clothing. H. V. Brown was its vice president, and also a stockholder and director.

On March 22, 1918, the Bowman-Brown Company, being in need of funds, applied to plaintiff for a loan; the negotiations therefor being conducted by Mr. Brown at the bank. The bank paid to the company $1,500, less the discount equal to the interest for 90 days at 10 per cent. after the note sued on in this action was executed and delivered to the bank. The note is in due form, and for value received the company agreed to pay to the order of plaintiff $1,500, 90 days after date, with interest from maturity at 10 per cent, per annum, and is signed, "Bow man-Brown Co., H. V. Brown, V. Pres." On the back thereof appear these words:

"Indorsers waive notice and protest. H. V. Brown. E. P. Bowman."

Four payments are indorsed thereon, as follows:

"6/22/18. Paid hereon $250.00. 9/12/18. Paid hereon $252.79, by trustee, M. E. Garrison. Tan. 24, 1919. Paid hereon $304.73, by trustee, M. E. Garrison, May 28-19. Paid hereon $200.00, by H. V. Brown. (Revenue stamp 25c. Revenue stamp 5c.)"

Aggregate payments indorsed thereon amount to $1,007.52.

The petition is formal and sets out the facts as stated above, and prays judgment against defendant for the balance of $641.35, with interest from May 22, 1920. The amended answer is, first, a general denial, and, as further answer, payment in full of the note prior to the institution of this suit is averred; extension of time without his knowledge or consent; that there was no consideration for defendant's signature on the note; that said note was executed and delivered wholly within the state of Kansas and in all respects is governed by the laws of said state.

The amended answer pleads sections 6590, 6591, and 6595, Rev. Stat. Nan. 1915, and alleges that defendant indorsed said note subsequent to the indorsement of H. V. Brown, and that his liability is secondary to that of H. V. Brown, that plaintiff executed a release to said H. V. Brown, discharging him from all liability on his said indorsement, and that said release of V. Brown, a prior indorser, operates as a release of defendant,

The reply is a general denial and pleads sections 6556, 2034, 2038, and 6647, Rev. Stet, Kan. 1915, as applicable to the facts in this case.

By stipulation of parties a jury was waived, and the cause was submitted to the court. At the close of plaintiff's case, defendant asked a declaration that under the law and the evidence plaintiff is not entitled to recover, which declaration the court refused. At the close of plaintiff's evidence, the court found the issues for defendant, based upon the following declarations of law:

"(a) The court declares the law to be that a person not otherwise a party to an instrument, who places his signature thereon in blank before delivery, is liable as an indorser, and that, if there is more than one indorser, they are liable in the order in which they indorse and that a person placing his name upon a note as aforesaid is liable to all subsequent parties.

"(b) The court declares the law to be that indorsers are in respect to one another liable in the order in which they indorse.

"(c) The court declares the law to be that the release of H. V. Brown by the plaintiff also released E. P. Bowman.

"(d) The court declares the law to be that under the pleadings and the evidence the plaintiff cannot recover."

Judgment was accordingly entered. Motions in arrest and for new trial were overruled, and defendant appeals.

The appeal is based upon the contention that the court erred in the application of the law to the facts. There is no dispute between the parties as to the salient facts in the case, and this appeal must be determined upon the application of the law to the facts.

It is conceded that the sections of the Negotiable Instruments Law of the state of Kansas which are applicable to the facts of this case are practically the same as the Missouri law governing the same points, and that the appellate courts of Kansas furnish no precedents for our guidance in the application of the statutes pleaded and the facts in evidence herein. The appellate courts of Missouri having ruled upon the various phases of our Negotiable Instruments Law, both parties to the suit have drawn largely upon the decisions of Missouri and other states with like statutes, in support of their contentions.

The one question determinative of this appeal, and which carries with it a solution of all the related questions involved, is whether defendant is liable primarily or secondarily upon the instrument sued upon. This issue is governed by the Negotiable Instruments Law of Kansas, as the entire transaction occurred within that state. It has been held repeatedly by the appellate courts of Missouri that in reviewing cases based upon the laws of a sister state the laws of that state will be applied, and not our own.

It is urged by plaintiff: (1) That defendant was an accommodation indorser, and, as such, is primarily liable to the holder for value, and absolutely...