Draper v. Owsley

• Citation: 15 Mo. 613
• Parties: DRAPER, T USE OF CLIFTON, v. OWSLEY.
• Decision Date: 31 March 1852
• Court: Missouri Supreme Court

15 Mo. 613

DRAPER, T USE OF CLIFTON,

v.OWSLEY.

Supreme Court of Missouri.

March Term, 1852.

On the 9th of September, 1836, James P. Shropshire and William P. Owsley gave their note or bond, under seal, to Joseph Conway, for the sum of eight hundred and eighty-five dollars, payable with eight per cent. interest from date, on the 1st day of August, 1838. This note was given for the sole benefit of Shropshire, and Owsley signed the same as surety, which was well known to Conway at the time. Before this note fell due (perhaps in 1836), Shropshire was a member of the “Hannibal Company,” a partnership, or association dealing in lands, and composed of T. G. Draper, William B. Clifton (the plaintiff below in this suit), the said James P. Shropshire, and others The Hannibal Company having sold a lot to Joseph Conway, the payee of the note above named, he, Conway, in payment for said lot assigned said note to the Hannibal Company on the 18th day of April, 1837. At this time Shropshire, the principal in the note, was a member of the company, and was good and solvent, and so continued till 1839 or 1840. The company kept said note till their dissolution, in 1839. In 1838 or 1839, Shropshire sold his share or interest in the effects of the Hannibal Company for about $6,000 to Joshua Mitchell, A. S. Robards and Angus W McDonald; and they (Mitchell, Robards & McDonald), afterwards represented Shropshire's share in the concern and received his part of the assets, when they were distributed, amounting to some $6,000. When this company dissolved in 1839, its assets were distributed among its individual members, and the note above-named was assigned to Clifton (the real plaintiff below), by Draper, the secretary of the company, the assignment being made to Clifton without recourse and by the direction of the company. By this time Owsley and Shropshire had become unfriendly, and they continue so still. In 1847, after Shropshire had become insolvent and taken the benefit of the bankrupt law, suit was commenced by Clifton, or by Draper for his use, against Shropshire and Owsley, on the above-named note of $885, given to Conway in September, 1836. This suit was defended by Owsley, but he compromised or settled the matter by giving various new notes in lieu of the old one on which he had been sued. Time was given him by Draper, and the sum of the new notes was much less than the amount of the first note with the interest. The consideration of the new notes was, 1st, the dismissal of the suit on the old note, as to Owsley; 2nd, a reduction of the amount claimed against Owsley, and 3rd, the giving of time to Owsley for the payment of said amount. In 1837, the first note had been credited by some $250. The note now sued on is one of the notes given by Owsley in consideration of the dismissal of the suit against him, as surety of Shropshire on the note first above-named, and of his discharge from any supposed liability thereon. This suit is to settle the question as to Owsley's liability on any or all of the notes given by him in lieu of the first named note as above stated. The court instructed the jury, in effect, that under the circumstances above named, Owsley was liable in law to the payment of the note sued on herein; and refused instructions of a contrary character. Owsley excepted, and brings the case here for reversal.

RICHMOND, HARRISON and HAWKINS, for Appellant.

I. This suit having been commenced before a justice of the peace, the defendant may rely upon any defense legal or equitable. Rev. Stat. 1845, pp. 652-3.

II. A joint obligation in a bond or ordinary note with the addition of a seal, may prove by parol or otherwise, that he signed the note as surety. Harrison v. Field's Ex'r, 2 Wash. Va. R. 137-41; Theobold on Principal and Surety, 845; Pitman on Principal and Surety, 183-4-5, 38 Law Lib.; 6 Mon. 104, 573; 9 Wheaton, 720; 11 Wheaton, 184.

III. When the original note of $885 came by assignment into the hands of the Hannibal Company, of which Shropshire was a member, Owsley, as Shropshire's surety, was immediately discharged from any liability thereon. Shropshire could not have been sued on this note at law, without being both plaintiff and defendant, which cannot be, and one joint obligor being released, by act of the party, the other is released also. If, while this note was in the hands of the company, Shropshire could have been sued by the other members of the company, in chancery only, for a general settlement, Owsley could not have been sued even in chancery, for a surety cannot be sued in chancery when his liability at law has ceased. See case in 2 Wash. R. above cited. The assignment of the note to Hannibal Company, and their acceptance of it, in payment for property sold by them, worked a satisfaction, or at least an extinguishment of the liability of even Shropshire, upon the note. How then could Owsley, the surety, be liable thereon? Story on Promissory Notes, §§ 402, 425-6; Chitty on Bills, 60-1. A debt once released or suspended is always so. Chitty on Bills, 411-12. Had Owsley remained bound after this assignment of the note, his liability, as surety, would have been materially raised. He could not have paid the debt to the company and been substituted in their place, so that he could sue Shropshire. Had he called on or notified the company to sue Shropshire on the note, the company could have brought no such suit. The same principle of law which discharges a surety where time has been given to the principal acts with ten-fold force in this case. Pitman on Principal and Surety,...