Lill v. Gleason

Citations

• 92 Kan. 754
• 142 P. 287
• 1914 Kan. LEXIS 318

Syllabus

<p>SYLLABUS BY. THE COURT.</p> <p>1. Promissory Note — Accommodation Indorsement by Stranger —Note Paid by Indorser — Note Not Discharged — Indorser May, Enforce it Against the Maker. A strangér to a negotiable promissory note indorsed the instrument for the accommodation of the payee, who transferred it by indorsement in blank and delivery to a holder in due course. At maturity the maker refused to pay, because of a contract executed contemporaneously with the note which relieved him from liability to the payee. The accommodation indorser had no. notice of this contract at the time of his indorsement and was not a party to any fraud or illegality affecting the instrument. After default of the maker the accommodation indorser paid the note to the holder in due course, who delivered it to him. Held, the note was not discharged and the accommodation indorser became the holder, possessed of all the rights of the holder in due course from whom he acquired title, including the right to enforce it against the maker.</p> <p>2. Same — Construction of Section 128 of Negotiable-Instruments Law. The words “remitted to his former rights” contained in section 128 of the negotiable-instruments law, which provides that where the instrument is paid by a party secondarily .liable thereon it is not discharged but the party so paying is remitted to his former rights as respects all prior parties, do not apply to the accommodation indorser.</p> <p>8. Same — Payee Adjudged a Bankrupt - — • Title of Bona Fide Holder Not Affected. While the note was in the hands of the holder in due course the payee was adjudged to be bankrupt. The accommodation indorser was a creditor of the bankrupt and held collateral securities for his claim. After he acquired title to the note he made composition with the trustee in bankruptcy whereby he was allowed to retain the securities. The note in question was included in the list of securities. Held, the title acquired from the holder in due course was not aff