Canal-Commercial Trust & Savings Bank v. Brewer

Citation143 Miss. 146,108 So. 424
Decision Date15 February 1926
Docket Number25200
PartiesCANAL-COMMERCIAL TRUST & SAVINGS BANK v. BREWER. [*]
CourtUnited States State Supreme Court of Mississippi

Division A

Suggestion of Error Overruled May 31, 1926.

APPEAL from chancery court of Coahoma county, HON. C. L. LOMAX Chancellor.

Suit by Earl Brewer against the Canal-Commercial Trust & Savings Bank. From decree for complainant, defendant appeals. Affirmed.

Judgment and decree affirmed.

Oscar Johnston and F. H. Montgomery, for appellant.

The indorsement by appellee of the W. P. Holland note was supported by sufficient consideration and rendered appellee liable thereon. The court below held that there was no consideration for the indorsement by the appellee of the note of W. P. Holland and, therefore, the same was not binding upon the appellee. The court below was in error.

The pledge contract executed by the appellee to the appellant on February 1, 1921, which contract was written by the appellee, provided as follows: "That all of said securities are cumulative and intended to secure the three hundred twenty-five thousand dollars owed by the party of the first part to the party of the second part, and is also pledged as collateral to secure the payment of balance of two hundred sixty-eight thousand five hundred forty dollars and eighty-three cents owed by W. P. Holland to the party of the second part, on which note the party of the first part is indorser, and is also intended to secure any other indebtedness that the party of the first part may owe to the party of the second part."

The Bobo notes and the Gates notes, which constitute the subject-matter of this litigation, were a part of the securities referred to in the said contract. It will thus be seen that it was expressly stipulated that these notes should stand as collateral to secure the payment of the W. P. Holland note on which the appellee was indorser. Unless this indorsement was invalid, and the pledge contract referred to invalid, undoubtedly the appellant has the right to retain the Bobo and the Gates notes until the balance due on the Holland note is paid in full.

Immediately preceding the closing of the several transactions then pending between Brewer and the appellant, appellee was repudiating, or seeking to repudiate, his liability on these notes; and the appellant was contending that he was liable to it because of his indorsement thereof. Thereupon, the appellee drafted a contract, which was signed by the appellant and the appellee, and which appellee says he "required the appellant" to enter into before he would close the transaction. The effect of this contract was as follows:

The appellee indorsed the Holland note. The appellant cancelled and surrendered appellee's note for two hundred thousand dollars, and released the Bobo and Gates notes, the subject of this litigation, which were held as collateral to the said two hundred thousand dollars. Thereupon the appellee made new notes to appellant for three hundred twenty-five thousand dollars, payable one year from date, bearing interest at the rate of eight per cent per annum, and pledged as collateral thereto the Bobo and Gates notes and agreeing: "that all of said securities are cumulative and intended to secure the three hundred twenty-five thousand dollars owed by the party of the first part to the party of the second part, and is also pledged as collateral to secure the payment of the balance of two hundred sixty-eight thousand five hundred forty dollars and eighty-three cents owed by W. P. Holland to the party of the second part, on which note the party of the first part is indorser, and is also intended to secure any other indebtedness that the party of the first part may owe to the party of the second part."

After new notes aggregating three hundred twenty-five thousand dollars were executed by the appellee, there was applied as a credit on the Holland note, with the consent of the appellee, an amount equal to the amount of the principal and interest due on the two hundred thousand dollar note of appellee and the twenty-five thousand dollar note of appellee and Ed Brewer, which were released as collateral by the appellant from the Holland note, reducing the amount of the indebtedness on the Holland note to two hundred sixty-eight thousand five hundred forty dollars and eighty-three cents.

No question was ever raised by the appellee about his liability to the appellant on account of his indorsement of the Holland note until after the bond issue of the Tchula Co-Operative Stores Company lands had been bought by the appellant and the Hibernia Bank of New Orleans, and appellee had received the full benefit arising therefrom. Then the appellant requested a renewal of his indorsement of the Holland note, which was long past due, and then the appellee, for the first time, questioned his liability on this note as indorser, and declined to renew the same.

The appellee contended, and the court below so held, that the indorsement of the Holland note by the appellee was without consideration, and did not constitute an indebtedness from appellee to appellant. In this we think the court below erred, both in law and in fact.

We are not contending that any contract of whatsoever nature need not be supported by a consideration. This is a principle of law universally recognized. But the questions involved here are (1) What constitutes a consideration? and (2) Was there such an act done in connection with the indorsement by the appellee of the Holland note as is recognized in law as a consideration? For definitions of the word "consideration," which are pertinent to the question here raised, see: Neg. Instr. Law, section 2603, Hemingway's Code; Magee v. Catchings, 33 Miss. 672; Byrne v. Cummings, 41 Miss. 192; Duff v. Snider, 54 Miss. 245; Long v. Shackelford, 25 Miss. 559; Field v. Weir, 28 Miss. 54; Ableman v. Haehnel, 103 N.E. 69; Leakeville Institute v. Mevane, 81 S.E. 1020; State v. Hillis, 113 N.E. 1045, L. R. A. 1917-B 684; Cherokee County v. Meroney, 173 N.C. 653, 92 S.E. 616; St. Marks Church v. Teed, 120 N.Y. 583, 24 N.E. 1014; Mascolo v. Montevanto, 29 A. S. R. 171.

It will be seen, therefore, that loss, injury, trouble, inconvenience, damage or detriment, even though trifling, and notwithstanding it does not inure to the benefit of the promisor, is a sufficient consideration.

It was the contention of the appellee in the court below that when the appellee executed his notes to the appellant on February 1, 1921, for three hundred twenty-five thousand dollars, and agreed to pay as interest thereon the highest legal rate of interest, his consenting in addition thereto to indorse the Holland note to the appellant constituted usury, and his indorsement of the Holland note was, therefore, void.

If the circumstances involved nothing more than a naked loan from appellant to appellee, for which the highest legal rate of interest was charged, and in addition thereto the maker was required to indorse the note of another, which he was under no legal or moral obligation to pay, and there were no other transactions connected therewith, this contention might be presented with some plausibility.

But the situation here is a wholly different one. It did not involve merely the making of the loan. The making of the loan of three hundred twenty-five thousand dollars was only one of several transactions. At the time in question, the appellant was the holder of five of the Glidden & Townsend notes and one of the McNally notes, on which the appellee was an indorser, for the principal sum of two hundred forty-one thousand four hundred dollars, with more than one year's accrued interest. The appellant also held the personal note of appellee for two hundred thousand dollars secured by the Bobo and Gates notes, and also held the note of appellee and Ed Brewer for the principal sum of twenty-five thousand dollars, both of which said notes were past due, and with more than a year's interest due thereon. All of these notes had been pledged as collateral security to the W. P. Holland note for five hundred thousand dollars.

The notes on which appellee was liable to appellant at the time evidenced an indebtedness in an amount in excess of the Holland note to which they were collateral.

The appellee was not merely seeking to procure a loan from the bank. He was seeking, in addition to this, a renewal of his indebtedness of two hundred twenty-five thousand dollars, evidenced by his personal note of two hundred thousand dollars and the joint note of Ed Brewer and himself for twenty-five thousand dollars, with an additional loan of one hundred thousand dollars for current business purposes. He was seeking to enlist the offices of the bank in the matter of shifting the Bobo and Gates notes, with a long list of other collaterals, which the testimony shows to have been worthless, from the Holland note to a personal note, which he proposed to make to the bank, for the sum of three hundred twenty-five thousand dollars. In fact, he was calling upon the bank to re-arrange his finances entirely so that he might be relieved of a present necessity of paying his obligations amounting to two hundred twenty-five thousand dollars and interest, which were then past due, and procuring one hundred thousand additional cash money. He was calling upon the bank to recast and re-adjust his finances so that he might continue in business. The appellant and the appellee were not the only persons interested in these transactions. W. P. Holland, who had pledged the two Brewer notes for two hundred twenty-five thousand dollars with the bank as collateral with his five hundred thousand dollar note, had rights therein which the bank had to respect and protect.

By his indorsement of the Holland...

To continue reading

Request your trial
35 cases
  • Dickey v. Bank of Clarksdale
    • United States
    • Mississippi Supreme Court
    • November 7, 1938
    ... ... Bank v ... Frazier, 63 Miss. 238; Jones v. Brewer, 146 Miss ... 142, 110 So. 115; Chandler v. Cooke, 163 Miss. 147, ... 546; Vickery v. Dickson, 35 ... Barb. 96; Canal Commercial Trust & Savings Bank v ... Brewer, 108 So. 424; Wied v. Crum, 92 So ... ...
  • Hardin v. Grenada Bank, 32612
    • United States
    • Mississippi Supreme Court
    • May 9, 1938
    ... ... Grenada Bank and others to cancel deeds of trust as a cloud ... on title of plaintiffs, wherein the defendant bank filed a ... 66 C ... J. 293, sec. 281; Jones v. Brewer, 146 Miss. 142; ... Union National Bank v. Fraser, 63 Miss. 231; ... Canal-Commercial ... Trust & Savings Bank v. Brewer, 108 So. 424, 47 ... A.L.R. 45; ... ...
  • Hardin v. Grenada Bank
    • United States
    • Mississippi Supreme Court
    • May 9, 1938
    ... ... Grenada Bank and others to cancel deeds of trust as a cloud ... on title of plaintiffs, wherein the defendant bank filed a ... 66 C ... J. 293, sec. 281; Jones v. Brewer, 146 Miss. 142; ... Union National Bank v. Fraser, 63 Miss. 231; ... Canal-Commercial ... Trust & Savings Bank v. Brewer, 108 So. 424, 47 ... A.L.R. 45; ... ...
  • Canal Bank & Trust Co. v. Brewer
    • United States
    • Mississippi Supreme Court
    • June 6, 1927
    ...I. All matters and things raised in this cause are res judicata under the rules of the court in cause number 25200. See Canal Bank v. Earl Brewer, 108 So. 430; v. Evans, 85 Md. 79, 36 L. R. A. 218; Durant v. Essex Co., 74 U.S. 19 Law Ed. 154; Walton v. Bodley, 39 U.S. 156, 10 Law Ed. 398; H......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT