The Conqueror Trust Company v. Danforth

• Decision Date: 07 December 1918
• Docket Number: 21,781
• Citation: 177 P. 357,103 Kan. 860
• Parties: THE CONQUEROR TRUST COMPANY, Appellee, v. H. L. DANFORTH, Appellant
• Court: Kansas Supreme Court

177 P. 357

103 Kan. 860

THE CONQUEROR TRUST COMPANY, Appellee, v. H. L. DANFORTH, Appellant

No. 21,781

Supreme Court of Kansas

December 7, 1918

Decided July, 1918.

Appeal from Reno district court; FRANK F. PRIGG, judge.

Judgment affirmed.

SYLLABUS

SYLLABUS BY THE COURT.

1. PROMISSORY NOTE--Liability of Comaker. A comaker, though in fact a surety only, is primarily liable on his promissory note.

2. SAME--Contemporaneous Oral Agreement--No Defense. It is no defense to an action on a note to plead an agreement with the payee to look to certain mortgage security and to hold the comaker for the balance only, as such agreement would contradict the terms of the note.

3. SAME--Set-off and Counterclaim. Neither does the alleged breach of such an agreement form any legal basis for a set-off or counterclaim.

C. M Williams, and D. C. Martindell, both of Hutchinson, for the appellant.

W. G. Fairchild, and H. S. Lewis, both of Hutchinson, for the appellee.

OPINION

WEST, J.:

The defendant signed a note with another person, who was the borrower and real principal, and when sued thereon he pleaded that it was agreed between the plaintiff and himself at the time he signed the note that before he could be held thereon or required to pay any portion thereof the plaintiff would exhaust certain chattel-mortgage security given by the principal, and that the defendant should be held for the balance only; that afterwards the plaintiff released its security without his knowledge and consent, although the property mortgaged was of more value than the amount of the note. The defendant further pleaded that the mortgaged property was sold by the principal, with the consent of the plaintiff, for $ 175, taking the purchaser's note for that amount due in thirty days, and a collateral note from the purchaser for $ 250 secured by a real-estate mortgage, both of which notes were indorsed and delivered to the plaintiff, who consented to the sale; and that by reason of these facts he, the defendant, had been damaged in the sum of $ 175 by the failure of plaintiff to carry out its agreement with him, which damage he claimed as a set-off and counterclaim. The trial court held that, having signed the note as a joint maker, the defendant's counterclaim could not be considered.

The defendant appeals, and contends that this case falls within the rule of Carter v. Wilson, 102 Kan. 200, 169 P. 1139, and that the bank having, without his knowledge or consent, released the mortgaged property to the principal and then undertaken to recover from the defendant, he is not liable.

The plaintiff relies on the negotiable-instruments law (Gen. Stat. 1915, § 6587), and on numerous decisions of this court, in support of its contention that the plaintiff is liable as a joint maker.

To this the defendant replies that, even if under the statute he became primarily liable, he is entitled to be heard upon his cross complaint as to damages.

Concerning the decision in Carter v. Wilson, it may be said that "this thing was not done in a corner." It was made plain in the opinion that no objection was made to the defense stated in the answer, that the court found the essential facts, and that the findings were not challenged the only question presented being whether they sustained the judgment. So, in order to make the...