Reynolds v. Bank of Hellier

Opinion op the Court by Judge Dietzman Affirming The appellee brought this suit against B. T. Hash and the appellants, W. W. Reynolds, J. S. Marrs, and F. A. Hopkins, on a promissory note dated December 6, 1923, whereby Hash, as principal, and the appellants, as indorsers, agreed to pay to the order of the appellee the sum of $700 four months from its date. Hash did not answer, but the appellants defended upon two grounds. The first was that the appellee had theretofore sued Hash, the appellants, and J. W. Reynolds on a promissory note dated August 6, 1923, whereby Hash, as principal, and J. W. Reynolds and the appellants, as indorsers, had agreed to pay to the order of the appellee the sum of $700 four months from its date; that in that suit they had defended on the ground that the bank had accepted the note of December 6, 1923, herein sued on in lieu of and as a discharge of the August note; that the *635 bank in that suit bad denied that it bad accepted tbe December note on any sncb terms, bnt that despite sncb denial tbe jury found that it bad, and, on its verdict, judgment went for tbe appellants. There was attached to the answer in this case a transcript of all of tbe proceedings bad in tbe suit on tbe August note from which it appeared that tbe only question submitted in that suit to tbe jury under tbe proof was whether tbe December note bad been accepted by tbe bank in discharge of tbe August note. Tbe other defense relied upon to defeat this note of December 6th was that, at tbe time tbe appellants signed tbe note for Hash, it was agreed between them and Hash that tbe note was not to become binding until be bad also secured tbe signature of J. W. Reynolds who bad been an indorser with these appellants on tbe August, note, and that Hash bad failed to do so. There was nothing said in the answer about tbe appellee being apprised of this arrangement. Tbe appellee ‘ filed a demurrer to this answer, and it was sustained. The appellants declined to plead further, and judgment was entered against them on tbe note of December 6th. They have appealed. That tbe court properly sustained tbe demurrer of tbe appellee to tbe defense that it was agreed between Hash and tbe appellants that tbe note sued upon was not to become binding upon them until be bad secured tbe signature of J. W. Reynolds is settled by the case of Brown’s Adm’r et al. v. Wilson et al., 222 Ky. 454, 1 S. W. (2d) 767. Indeed, appellants make no contention on this appeal as to this, but they do argue, that as tbe note of December 6th and tbe note of August’ 6th were both given for tbe same indebtedness, and as they have won tbe suit brought on tbe August 6th note, they are forever afterward discharged from having to pay the indebtedness-represented by these notes. Tbe statement of tbe case which we have given refutes tbe appellants’ contention. Their sole defense in tbe first suit was that there bad been a novation, in that tbe appellee bad accepted the December note in place of tbe August note.' It is true tbe appellee denied this, but tbe jury decided in favor of tbe appellants on that issue, and it is now res adjudicata betweeji tbe parties. Necessarily, under tbe appellants’ theory in tbe first suit, tbe consideration for tbe December note was tbe surrender of any claim under tbe August note. It is plain then that, by tbe verdict and judgment in tbe suit on the August note, it was decided that a nova *636 tion had occurred, and whether that decision was erroneous or not, a matter we do not decide, since it was never-appealed, modified^ or set aside, as this record discloses, it is binding as between the parties. Turner v. Deaton, 220 Ky. 154, 294 S. W. 1063. A novation having-occurred, the rights of the parties are to be measured alone by the obligations arising from the new situation. Larimore v. West, 227 Ky. 306, 12 S. W. (2d) 856. The fact, then, that the appellants had won the suit on the August note on the ground they did presented no defense to this suit on the December note. The court, therefore, properly sustained the demurrer to the answer of the appellants, and on appellants’ declining to plead further properly entered judgment for the appellee. Its judgment is affirmed.