The Cambridge State Bank v. Dwyer

• Court: Kansas Supreme Court
• Writing for the Court: MARSHALL, J.:
• Citation: The Cambridge State Bank v. Dwyer, 289 P. 423, 131 Kan. 148 (Kan. 1930)
• Decision Date: 05 July 1930
• Docket Number: 29,396
• Parties: THE CAMBRIDGE STATE BANK, Appellee, v. JOHN DWYER, Appellant

289 P. 423

131 Kan. 148

THE CAMBRIDGE STATE BANK, Appellee, v. JOHN DWYER, Appellant

No. 29,396

Supreme Court of Kansas

July 5, 1930

Decided July, 1930.

Appeal from Cowley district court; OLIVER P. FULLER, judge.

Judgment reversed.

SYLLABUS

SYLLABUS BY THE COURT.

1. BILLS AND NOTES -- Negotiability. A promissory note which contains the following language is nonnegotiable:

"The makers and indorsers of this note hereby severally waive presentment for payment, notice of nonpayment, protest and notice of protest, and consent that time of payment may be extended without notice thereof."

Such a note in the hands of an indorsee is subject to the same defenses as would have been available against the payee.

2. SAME--Defenses -- Want of Consideration. Under the circumstances disclosed in the opinion, the defendant is not estopped from setting up want of consideration as a defense to the note on which the action is based.

J. E. Torrance and O. W. Torrance, both of Winfield, for the appellant.

J. A. McDermott and Richard B. McDermott, both of Winfield, for the appellee.

OPINION

MARSHALL, J.:

The action is brought by the plaintiff as indorsee to recover on a promissory note. Judgment was rendered in favor of the plaintiff on the pleadings and the opening statement of counsel for the defendant. The defendant appeals.

The note, dated June 16, 1928, contained the following provision:

"The makers and indorsers of this note hereby severally waive presentment for payment, notice of nonpayment, protest and notice of protest, and consent that time of payment may be extended without notice thereof."

The answer and the trial statement of the defendant were, in substance, that in October, 1910, H. T. Fromm presented to the defendant a statement showing him to be indebted to Fromm in the sum of $ 416.72 on notes and on an account; that the defendant thereafter in that year paid to Fromm the full amount claimed by him, the most of which was represented by three promissory notes; that when the payments were completed the statement was made to the defendant by Fromm that he did not then have the notes, but would send them to the defendant later; that later the notes were produced by Fromm and he again demanded payment of them; that on being informed by the defendant they had been paid, Fromm in effect stated, "Produce the checks showing payment," and demanded a note be given in renewal of the notes held by Fromm until the checks were produced, when, if they were produced, the new note would be returned to the defendant; that a note for the full amount was given under those circumstances; that when it became due it was renewed under the same promise on the part of Fromm; that the note was afterward renewed with the same promise by Fromm until the note sued on in the present action was given; that before the plaintiff purchased the note the defendant informed the plaintiff of the conditions under which each of the several notes had been given by the defendant to Fromm; that the checks by which the original notes and the account in favor of Fromm against the defendant had been paid were lost, and that the defendant was unable to find them until in 1928.

1. The note is nonnegotiable. (Bank v. Gunter, 67 Kan. 227, 72 P. 842; Bank v. Heslet, 84 Kan. 315, 113 P. 1052; Bank v. Engler, 112 Kan. 708, 212 P. 656; National Bank v. Hoover, 114 Kan. 394, 401, 218 P. 1003) That rendered the note subject to all defenses. ( Iron Works v. Paddock, 37 Kan. 510, 15 P. 574; Bank v. Gunter, supra; Bank v. Engler, supra.)

In addition to the note being nonnegotiable, according to the answer and trial statement, the plaintiff had been informed by the defendant before the purchase of the note concerning the circumstances under which the note had been given. That rendered available all defenses the maker had against the note. (Brook v. Teague, 52 Kan. 119, 34 P. 347; Dewey v. Bobbitt, 79 Kan. 505, 100 P. 77; Murchison v. Nies, 87 Kan. 77, 123 P. 750; Bank v. Peckham, 108 Kan. 560, 196 P. 593.)

The following language is found in the syllabus to Hutchins v. Stanley, 88 Kan. 739, 129 P. 1180:

"(2) The assignee of a nonnegotiable instrument stands in the shoes of the payee. A defense available against the payee is also available against the assignee.

"(3) The new note taken in exchange for the old one is a renewal of the former obligation.

"(4) The payee of the new note is chargeable with notice of the infirmity in the original instrument because of his knowledge of the consideration, as well as from its nonnegotiable form.

"(5) The consideration of the new note is the obligation of the old one. This consideration being illegal, a recovery cannot be allowed."

See, also, 8 C. J. 444.

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