Young v. Bank of Sweetwater

• Decision Date: 17 February 1920
• Citation: 218 S.W. 463,187 Ky. 71
• Parties: YOUNG v. BANK OF SWEETWATER.
• Court: Kentucky Court of Appeals

218 S.W. 463

187 Ky. 71

YOUNG v. BANK OF SWEETWATER.

Court of Appeals of Kentucky.

February 17, 1920

Appeal from Circuit Court, Jefferson County, Chancery Branch, Second Division.

Suit by the Bank of Sweetwater against M. W. J. Young. From judgment for plaintiff, defendant appeals. Affirmed.

Henry J. Tilford and O'Neal & O'Neal, all of Louisville for appellant.

John Bryce Baskin and Baskin & Vaughan, all of Louisville, for appellee.

CARROLL C.J.

On January 5, 1915, D. C. Young, with M. W. J. Young, as surety executed a promissory note to the Bank of Sweetwater, Tenn payable in six months. D. C. Young died in July, 1917, and in February, 1918, this suit was brought by the appellee bank against M. W. J. Young, the appellant.

For defense to the note, M. W. J. Young set up that the note sued on had been satisfied on September 19, 1916, by the execution on that day of a new note in place of the original, which new note, as alleged, was accepted by the bank and the original note indorsed paid.

After the pleadings had been made up and evidence taken, the case was submitted, and from a judgment in favor of the bank this appeal is prosecuted by Young.

The correctness of the judgment depends on the question whether the note sued on was satisfied by the execution of the new note on September 19, 1916. It is admitted that on September 19, 1916, a new note for the amount of the note sued on was executed by D. C. Young, payable to the bank, and that the bank retained possession of this new note, on which there also appeared as surety the name of M. W. J. Young. It is also admitted that on September 19, 1916, the bank put on the face of the original note, with a stamp, these words "Bank of Sweetwater, paid September 19, 1916, Sweetwater, Tennessee." The bank, however, for reasons that will be later stated, contends that the indorsement on the face of the original note and its retention of the new note did not amount to its acceptance of the new note in satisfaction of the original. On the other hand, M. W. J. Young contends that the new note was accepted in the place of the original, and that the indorsement on the original note and the retention of the new note established this fact.

M. W. J. Young, in his own behalf, testified that he signed as surety for D. C. Young, who was his brother, the note dated January 5, 1915; that D. C. Young, the principal in the note, died on July 3, 1917; that he was first notified that the note sued on was unpaid on August 8, 1917, at which time payment was demanded of him.

For the bank, S. T. Jones, who was president, cashier, and also a stockholder, testified that the interest on the note was paid every six months from the time it was due in June, 1915, up to August 28, 1917; that D. C. Young died in July, 1917; that on September 19, 1916, D. C. Young came into the bank and offered him a new note for $1,500, with the name of M. W. J. Young signed to the note, but he declined to accept the new note in satisfaction of the original, because the name of M. W. J. Young had not been signed by himself to the new note; that D. C. Young left the new note at the bank and promised to get another note with the name of M. W. J. Young signed to it in person, but did not do so. He further testified that when D. C. Young called at the bank on September 19, 1916, he understood that he had come for the purpose of paying the original note, and that he then went into another room in the building and got the original note and indorsed on it with a stamp the words that appear on the face of the note.

He further said that--

"I stamped the note in that way by mistake. It was done in the main banking room. No one was present at the place where I was when I put the stamp on, but at other places in the bank there were some of the regular employés of the bank. Neither of the Youngs, I mean D. C. Young and M. W. J. Young, were present in the room. D. C. Young was not present and did not see me stamp those words and figures upon that note. That after stamping the note, he took it back in the room where D. C. Young was, when he discovered that he did not intend to pay the original note, but only the interest on it."

Dora E. Young, a lawyer at Sweetwater, Tenn., and who was a partner of D. C. Young, testified that he paid for D. C. Young the interest, indorsed as credits, on the note in 1917; that he was executor of the estate of D. C. Young, and, after the death of D. C. Young, the bank presented to him, as executor, the original note, with the stamp indorsement on it showing its payment; that it was attached to the new note executed on September 19, 1916; that the bank explained that the original note had been stamped paid by mistake, and that the new one had been retained in the expectation that another note properly signed would be received from M. W. J. Young.

Clarence E. Young testified that he was the bookkeeper and assistant cashier of the Bank of Sweetwater, but not a stockholder; that the bank books showed that no payments had been made on the original note except the interest payments indorsed on the note. It may also be here said that it does not appear that any entry of the new note dated September 19, 1916, was ever made on the bank books, nor was any interest ever credited on this note.

The...