First National Bank of Smith Center v. Hardman

Citations

• 89 Kan. 212
• 131 P. 602
• 1913 Kan. LEXIS 44

Syllabus

<p>SYLLABUS BY THE COURT.</p> <p>1. Promissory Note — Chattel Mortgage — Sales by Mortgagor without Accounting — Liability of Surety. Where a surety on a note (who was induced to become such by the assurance of the payee that its payment was to be fully secured by a chattel mortgage upon a stock of merchandise) intended when he signed the note that the mortgagor should be permitted to remain in possession of the goods, and to make sales in the usual course of business, without applying the proceeds to the debt, and this course was followed, the mortgage was thereby rendered invalid by conduct in which the surety participated, and he can not escape liability on the note by showing that without his knowledge the mortgage had been withheld from record, and that it had been held to be void as to creditors by a court of competent jurisdiction, as a result of which the note remained unpaid.</p> <p>2. Sale of Mortgaged Goods — Finding of Jury Construed. Where the jury are asked whether it was the intention that a mortgagor of a stock of merchandise should remain in possession, selling the goods and using the proceeds as he saw fit, and answer: “Yes; to carry on in regular way,” this reply is to be construed as meaning that the intention was that the mortgagor was to carry on the business in the usual way, selling the goods and disposing of the proceeds as he saw fit; and this notwithstanding such construction results in a conflict between the finding and the general verdict.</p>