KANSAS NATIONAL BANK v. BAY.

[62 Kan. 692, 64 Pac. 596.]

NEGOTIABLE INSTRUMENTS-PERSONAL LIABILITY OF ATTORNEY IN FACT.-A person who signs a note in the name of another, by himself as attorney in fact, with the knowledge of the payee, and subsequent indorsee that he has no authority to use such other's name, and who refuses to assume personal responsibility by signing his own name, is not liable on the note as his contract, although it is given in a transaction of his own, and he generally uses the name signed to the note as trade name.

Houston & Brooks, for the plaintiff in error.

H. Whiteside, for the defendant in error.

692 DOSTER, C. J. This was an action by the Kansas National Bank against C. M. Bay on a promissory note. Judgment went for the defendant. The plaintiff has prosecuted error to this court. The note sued on read as follows: "$5577.50. Wichita, Kansas, October 8, 1898. "One hundred and twenty days after date, I promise to pay to the order of W. W. Graves & Co. five thousand five hundred and seventy-seven and 50-100 dollars, for value received, negotiable and payable, without defalcation or discount, at the Kansas National Bank of Wichita, Kansas, with interest at the rate of 10 per cent per annum from November 8, 1898, interest payable annually. No.. Due Feb. 8, 1898.

"H. R. SLOAN.
"By C. M. BAY,

"Attorney in Fact."

693 The petition averred that the defendant Bay, under the name and style of H. R. Sloan, executed and delivered the note, and that the amount of it was due from the defendant Bay, doing business as H. R. Sloan; wherefore judgment was demanded against said Bay.

The facts were that Bay was doing his own business under the name of Sloan, and that, as a cover for his transactions, he had procured a power of attorney from Sloan. However, that instrument did not confer on him the power to execute promissory notes. He bought cattle from W. W. Graves & Co., and, to evidence the purchase price, executed to them two promissory - notes, in form similar to the one in suit. To secure these notes, he executed in Sloan's name a first and a second chattel mortAm. St. Rep., Vol. LXXXIV-27

gage on the cattle. These notes and mortgages were negotiated to the Kansas National Bank. At the time they were taken by the bank, Bay explained to its president that he was doing business in the name of Sloan under a power of attorney. The bank accepted the notes and mortgages, but required Bay to furnish it with a copy of the power of attorney. The cattle seemingly were taken under the first mortgage to pay one of the notes. This left the other one in the hands of the bank. It was held there as collateral security to an indebtedness due the bank from Graves & Co. The bank desired its renewal and sent Graves, as its agent, to procure the renewal. As a renewal, Graves secured the note in suit and indorsed it to the bank. He tried to induce Bay to assume personal responsibility on the note by signing his own name to it. Bay refused to do this.

There is no question but that the transaction for which the notes were given was Bay's individual business, 694 but he fully explained to the bank president and to Graves & Co. that he was not doing business in his own name; that he could not do so because of indebtedness held against him. There is no claim of deception or fraud practiced by Bay. His admission that he was conducting his own business in the name of another and his reasons for doing so were frank and open. While he seemed to be of the opinion that Sloan's power of attorney to him authorized the execution of promissory notes, yet it was not claimed that he fraudulently misstated his authority under that instrument, and, even if he had done so, the bank came into the possession of a copy of the power of attorney before the note in suit was executed, and therefore knew what it contained or did not contain. The question, therefore, is whether Bay is liable on the note executed by him in the name of Sloan.

The plaintiff in error contends that Bay is liable, because, as it says, the name of Sloan was a trade name adopted by Bay for the transaction of his own business, and, inasmuch as the giving of the note was his own business, he is liable on it as though executed in his own name. There are authorities to the effect that one who, for his own purposes, adopts the name of another, will be held liable in a transaction of his own conducted thereunder. We have no occasion to question the soundness of these authorities. We think, however, that they are limited to cases where it appeared that, under the name of another as a trade name, the party contracted to bind himself and not the other; and, in some of them, the party using the name of another was held liable, not on the contract, but upon the transaction out

of which the contract grew. It may be that Bay is liable in an action charging him upon the original transaction, but he is 695 not liable upon the promissory note. He is not liable because he never made that note his contract. He never agreed to be bound upon it, but, on the contrary, refused to sign it as his contract or bind himself by it as an instrument of writing.

No cases precisely in point have been cited to us, nor in considerable research among the authorities have we been able to find one entirely similar in its facts. We think, however, that the case is covered by the general principles of the law, and that these are well stated and elucidated in Bartlett v. Tucker, 104 Mass. 336, 6 Am. Rep. 240, the opening paragraph of the opinion in which case reads: "It is well settled that any person taking a negotiable promissory note contracts with those only whose names are signed to it as parties, and cannot, therefore, maintain an action upon the note against any other person. That rule, of course, does not preclude charging a party who, instead of the name by which he is usually known, signs, with intent to bind himself thereby, his initials, or a mark, or any name under which he is proved to have held himself out to the world and carried on business."

The judgment of the court below is affirmed.

One who Signs a Fictitious Name to a Note, or the name of a real person without authority, is not liable thereon: Bartlett v. Tucker, 104 Mass. 336, 6 Am. Rep. 240.

PRICE v. FIRST NATIONAL BANK.

[62 Kan. 735, 64 Pac. 637.]

JUDGMENTS-MERGER.-All causes of action upon which suit is brought and final judgment obtained are merged in such judgment, and thereby extinguished and cannot be made the basis of a subsequent action or judgment.

JUDGMENT-MERGER OF ONE IN ANOTHER.-A second judgment upon the same cause of action as a prior judgment, although for a less amount, is a waiver of the balance, and an absolute extinguishment of the first judgment.

JUDGMENTS-MERGER-EFFECT OF SECOND JUDGMENT.-If a judgment is recovered upon a prior judgment, the latter is merged in the former, and all of its liens or priorities are released.

JUDGMENTS.-SATISFACTION, MERGER, OR EXTINGUISHMENT of a personal judgment in an action to foreclose a real estate mortgage, releases the mortgage lien.

On July 10, 1890, J. M. Price and wife executed two notes for five thousand dollars each, for an indebtedness due the defendant bank. They also executed to one D. Auld a deed to certain real estate in trust as security for the payment of such indebtedness. These notes having been reduced and renewed, Price and wife, on January 19, 1894, executed to the defendant two new notes for the old indebtedness in the sum of four thousand four hundred and thirty-four dollars and ten cents, and at the same time gave it one note for two thousand dollars, one note for twelve hundred dollars, and twelve notes for fifty dollars each. They also executed a mortgage on the homestead premises in controversy herein, to secure the payment of these notes and interest. On April 22, 1894, Price and wife gave the defendant bank two renewal notes, each for the sum of four thousand five hundred and forty-eight dollars and sixty-five cents, payable at ninety days with interest. On March 21, 1896, the defendant bank commenced suit on ten different causes of action against Price and wife, including all of the indebtedness heretofore mentioned, and on May 21, 1897, recovered a personal judgment against Price and wife for the sum of sixteen thousand seven hundred and twenty-nine dollars and nine cents, and a decree foreclosing the mortgage on the homestead. Afterward the homestead was sold under such decree and purchased by the defendant bank, and it obtained a sheriff's deed therefor. On March 21, 1896, the same day that the prior action was commenced, the defendant bank began another action against Price and wife on two causes of action, the first being one of the notes executed on April 22, 1894, and alleged as its first cause of action in the prior suit, and the other cause of action being the other note executed on that date, and alleged as its second cause of action in the first suit. In this action judgment was asked for the whole sum of the two notes with interest, and a foreclosure of the deed executed by Price and wife to D. Auld in trust as security for such indebtedness. On May 21, 1897, the defendant bank, after it had obtained judgment in the first action, recovered judgment as prayed for in the second action in the sum of eleven thousand six hundred and seventy-four dollars and eighty-six cents, and a decree foreclosing the trust deed given to D. Auld. This land was afterward sold under such decree, the proceeds thereof to be applied in satisfaction of such judgment. This action was brought to set aside the sheriff's deed to the homestead. The defendant bank recovered judg ment, and plaintiffs prosecuted a writ of error.

Waggener, Horton & Orr, for the plaintiffs in error.

C. D. Walker and J. L. Berry, for the defendant in error. 738 GREENE, J. The important question in this case is: Did the judgment recovered in the former action become merged in the subsequent judgment, and thus extinguished? The defendant in error, in its first action, included all causes of action which it held against Price and wife, and when judgment was rendered in that action all such causes became merged in that 739 judgment. In the forceful language quoted by Freeman in his work on Judgments, section 115, they became "drowned in the judgment." Black, in his work on Judgments, section 674, says: "The cause of action is merged in the judgment and can never again become the basis of any claim against the defendant in the judgment. The original claim has, by being sued upon and merged in the judgment, lost its vitality and expended its force and effect. . . . . So where judgment is recovered on a note, it is merged and extinguished, and a second judgment cannot be had thereon between the same parties."

When the defendant in error recovered its first judgment against Price and wife, the several causes of action sued on became merged in that judgment for sixteen thousand seven hundred and twenty-eight dollars and nine cents. This judgment then might have been made a cause of action, but as such it is inseparable and indivisible. The subsequent judgment obtained by the defendant in error must be held to have been on this greater cause of action, and not on a separate part of it. If one has a single cause of action and elects to split it and recover on a part, this is a bar to a recovery on the remainder. In other words, the law declares that whatever of that cause of action is not sued on is merged in the judgment and thus extinguished. To hold otherwise would be to permit a creditor not only to embarrass his debtor but also to bankrupt him in interminable litigation, costs, and record liens on his property. The law will not tolerate this. It was held in Bolen Coal Co. v. Whittaker Brick Co., *52 Kan. 747, 749, 35 Pac. 810: "It is the policy of the law to avoid a multiplicity of actions, and a party is not permitted to split a cause of action into two or more parts and maintain separate actions for each of the separate parts. A recovery of one part of an action so split up will constitute a complete bar to a recovery upon any remaining portion thereof." The same principle was again adhered to in Thistler v. Miller, 53 Kan. 520, 42 Am. St. Rep. 302, 36 Pac. 1060.

740