Thomas Kirkman was involved in the horse business and was a friend of John Roundtree, a loan officer for American Federal Bank. Kirkman and Roundtree conceived a business arrangement in which Kirkman would locate buyers for horses and the buyers could seek financing from American Federal. Roundtree gave Kirkman blank promissory notes and security agreements from American Federal. Kirkman was to locate the potential purchaser, take care of the paperwork, and bring the documents to the bank for approval of the purchaser’s loan. Kirkman entered into a purchase agreement with Gene Parker, a horse dealer, to copurchase for $35,000 a horse named Wills Hightime, which Kirkman represented he owned. 

Parker signed the American Federal promissory note in blank and executed in blank a security agreement that authorized the bank to disburse the funds to the seller of the collateral. Kirkman told Parker he would cosign the note and fill in the details of the transaction with the bank. Although Kirkman did not cosign the note, he did complete it for $85,000 rather than $35,000. Kirman took the note with Parker’s signature to Roundtree at American Federal and received two checks from the bank payable to him in the amounts of $35,000 and $50,000. 

Kirkman took the $35,000 and gave it to the real owner of the horse. Parker then received the horse. Parker began making payments to the bank and called upon Kirkman to assist in making the payments pursuant to their agreement. However, Kirkman skipped town, taking the additional $50,000 with him. Parker repaid the $35,000 but refused to pay any more. He argued that he agreed to borrow only $35,000 and the other $50,000 was unauthorized by him. Was Parker’s liability on the note limited to the $35,000 he had authorized Kirkman to fill in?