Gahren, Dodge & Maltby v. Parkersburg National Bank

Opinion of the Court by William Rogers Clay, Commissioner Affirming. On February 17,1913, G-ahren, Dodge & Maltby, a corporation, executed and delivered to its vice-president, J. W. Butler, a certain promissory note by which it agreed [267] and promised to pay him sixty days thereafter the sum of $1,600. The note was endorsed by J. W. Butler and the Citizens Trust & Guaranty Company of- West Virginia, and negotiated by the Parkersburg National Bank of Parkersburg, West Virginia. The note not being paid at maturity, plaintiff, the Parkersburg National Bank, brought this action against defendants, Gahren, Bodge & Maltby and J. W. Butler, to recover thereon. The trial resulted in a verdict and judgment for plaintiff, and defendant appeals. The note sued on was executed under the following circumstances: One W. F. Garrettson contracted with the United States Government for the construction of Lock No. 13 in the Kentucky Biver, at a point in Lee County, Kentucky. Garrettson gave bond, with the Citizens Trust & Guaranty Company as surety, for the completion of the work in accordance with the specifications prepared by the government. Garrettson having failed to comply with his contract, it was canceled. Thereupon the government notified his surety, the Citizens Trust So Guaranty Company, either to complete the dam or pay the penalty of the bond. On October 7,1912, the Citizens Trust & Guaranty Company entered into a contract with the government for the completion of the work, and on October 8,1912, with the consent and approval of the government, sub-let the contract to Gahren, Dodge & Maltby, in accordance with the terms of a preliminary contract made by it with Gahren, Dodge & Maltby on September. 17, 1912. By the contract in question, Gahren, Dodge &' Maltby agreed to take care of and pay the pay-rolls for the work until the estimates received from the government exceeded the payrolls paid. The government being slow in paying over the actual cash for the estimates, Gahren, Dodge & Maltby, through their vice-president' J. W. Butler, requested the Citizens Trust & Guranty Company to assist them in raising the sum of $4,600 to carry on the work until the estimates were received and paid. To facilitate the work, and to accommodate Gahren* Dadge & Maltby, two notes were executed by that company to its vice-president, J. W. Butler, and payable to his order; one for the sum of $1,600, due thirty days after date, and one for $3,000, due sixty days after date. Both of these notes were endorsed by Butler and the Citizens Trust & Guaranty Company. These two notes were discontinued by plaintiff, the Parkersburg [268] National Bank of Parkersburg, West Virginia. A draft for tbe proceeds, amounting to $4,562, was delivered by tbe bank to tbe trust company, and then mailed by tbe trust company to the Farmers 'Bank of Estill County, and tbe money placed- there to tbe credit of defendant, Gabren, Dodge & Maltby. Tbe $1,600 note was renewed once, and is tbe obligation sued on in tbis action. Tbe proceeds of tbis note were actually received by Gabren, Dodge & Maltby and used by.it in tbe prosecution of tbe work. That company abandoned tbe work on Lock No. 13 in December, 1912, and failing to meet tbis and other obligations discounted for their accommodation, plaintiff brought tbis action. As a defense to tbe action defendants pleaded in substance that tbe note was without consider lion and its execution was procured by fraud on tbe part of tbe plaintiff and tbe trust company. They further pleaded that plaintiff was not a bolder in due course, and bad paid nothing for tbe note, and that tbe note was only tbe obligation of tbe trust company. Tbe first error relied on was the refusal of tbe court to grant defendants a continuance. Tbe motion' for a continuance was predicated on tbe fact that tbe trial court bad discharged its common law jury for tbe July' term, and defendants and their attorneys believed there would be no further trials during that term. They were, therefore, taken by surprise when tbe case was called for trial. It appears, however, that tbe action was instituted in April, 1913, and made returnable for trial at tbe July term of that year. As several of tbe witnesses were non-residents, tbe court assigned tbe case for trial on Thursday of tbe second week of tbe term. Plaintiff’s witnesses were notified to be present on that day, and its attorneys came from Richmond, Kentucky, for tbe ■purpose of conducting tbe trial. In tbe meantime Butler bad left tbe state, claiming that be did not think tbe case would be called for trial. In our opinion, tbe trial court did' not abuse its discretion in refusing a continuance under tbe circumstances. The case having been regularly set for a trial on a certain day for tbe accommodation of parties, witnesses and attorneys, defendants bad no right to assume, merely because tbe trial court discharged tbe common law jury for tbe term, that there would be no further trials during that term. As there were to be no further trials until tbe following Thursday, it was not only right but tbe duty of the. court to dis [269] charge the jury and thus save the Commonwealth the unnecessary expense of its attendance. In refusing the continuance the court permitted the affidavit of T. B. Blakey, one of defendants’ attorneys, to be read as the deposition of J. W. Butler. It was averred in -this affidavit that Butler, if present, would testify in a general way that the note was obtained by fraud, and. that there was collusion between the plaintiff and the trust company. Manifestly, the mere opinion of the witness, unaccompanied by any statement of facts which if true would constitute fraud or collusion, is not sufficient to show fraud or collusion. The affidavit not only fails to state any facts showing fraud on the part of the trust company, but also fails to show that the plaintiff had actual knowledge of any infirmity in the note or defect in the title of any of the persons negotiating the note, or knowledge of such facts that its action in taking the instrument amounted to bad faith. On the contrary, the evidence shows that the defendants received the proceeds of the note sued on and used the proceeds in the prosecution of the work. It being no longer necessary that a note shall be payable and negotiable at a bank in this state, and be actually endorsed to and discounted by a bank in this State, in order to place it on the footing of a bill of exchange, since section 483, Kentucky Statutes, so declaring, has been repealed by the Negotiable Instrument Act, Williams v. Paintsville National Bank, 143 Ky., 781, it follows that as the note in question was complete and regular on its face, and possessed all the requisites of a negotiable instrument, and was discounted by plaintiff in good faith and for value before it was overdue, and without notice of previous dishonor or of any infirmity in the instrument or defect in the title of the persons negotiating, plaintiff was a holder in due course, and the instrument was not subject to any defense that defendants might have against the trust company. Section 3720b, sub-sections 52, 55, 56, 57, Kentucky Statutes. As a matter of law, therefore, plaintiff was entitled to a peremptory instruction. But it is insisted that the trial court in summoning the jury did not follow the method prescribed by the statute. Without discussing the question whether or not the jury was properly summoned, it is sufficient to say that a party can only complain of this fact when there [270] is an issue for the jury. He cannot complain when his evidence is insufficient to take the case to the jury, and the other party is, therefore, entitled .to a peremptory instruction. Other immaterial errors are relied on, but we deem it unnecessary to consider them. Judgment affirmed.