Farmers And Merchants Bank of Vandalia v. Richards

• Decision Date: 08 May 1906
• Citation: 95 S.W. 290,119 Mo.App. 18
• Parties: FARMERS AND MERCHANTS BANK OF VANDALIA, Respondent, v. RICHARDS, Appellant
• Court: Missouri Court of Appeals

95 S.W. 290

119 Mo.App. 18

FARMERS AND MERCHANTS BANK OF VANDALIA, Respondent, v. RICHARDS, Appellant

Court of Appeals of Missouri, St. Louis

May 8, 1906

Appeal from Audrain Circuit Court.--Hon. James D. Barnett, Judge.

AFFIRMED.

STATEMENT.

--On February 17, 1900, defendant executed and delivered to plaintiff his promissory note for three hundred and twenty-five dollars, bearing interest from date at the rate of eight per cent per annum. The note, though overdue, has not been paid. After executing the note the defendant was adjudged a bankrupt and on February 28, 1901, received his discharge in bankruptcy. The count of the petition on which the case was tried (the second one) alleged, in substance that after the adjudication in bankruptcy, the defendant "for a valuable consideration, by a new promise then and there made, promised and agreed "to pay the note in full; that as to whether or not defendant had been discharged as a bankrupt, plaintiff had no knowledge or information. The substance of the answer to this count was a plea of discharge in bankruptcy and a denial of the alleged new promise. On the issues thus made the jury returned a verdict for plaintiff for four hundred and sixty-three dollars and sixty-five cents. Unsuccessful motions for new trial and in arrest of judgment were filed and defendant appealed.

The plaintiff's evidence tends to show that on January 25 1903, defendant went into plaintiff bank for the purpose of cashing a draft, and the cashier then and there called his attention to the three hundred and twenty-five dollars note and asked him to renew it. Defendant said, "No, I will pay it." The cashier testified as follows: "I offered him a renewal note dividing it, making half of it payable in six months and half in twelve months. He says 'No, I will pay it.' I would judge we were engaged in conversation some thirty minutes. He continued to say he would pay it. His reason for not signing a new note was that he would have to give new notes to other parties. I called his particular attention to this note sued on, or three hundred and twenty-five dollar note. The note which is dated February 17, 1900, is the note that he said he would pay." On cross-examination witness testified: "I asked him what he intended to do with the note. He said he would pay it. I asked him what he could do for us on that note of three hundred and twenty-five dollars. He says, 'I am going to pay it.' I asked him to make me a couple of notes dividing it half and half, one six months and one twelve months. He says, 'No, I will pay it.' I told him, all right. I considered at the time he would pay it from six to twelve months. He didn't give me any exact time about paying it. I had a conversation with him about two months afterwards. I talked to him about the note and he said he was going to pay it. I asked him if he didn't consider it an accommodation to let him have the money. I spoke to him about renewing the note and he said he would pay it. He came right out and said, 'I will.'"

W. L. Wright, a witness for plaintiff, testified as follows: "I heard Mr. Richards say, 'Fred, I will pay the note but I cannot renew it now. If I was to renew this note I would have to give other parties a new note, and I couldn't do that.' They were engaged in conversation some little time; it was less than an hour."

Both in his examination in chief and on cross-examination, defendant distinctly and emphatically denied that he promised to pay the note or any part of it at any time after his discharge in bankruptcy.

Judgment affirmed.

Geo. Robertson and John Gatson for appellant.

There could be no renewal of a note bearing eight per cent interest by a new promise not in writing. R. S. 1899, secs. 3705, 3706. The evidence offered on the part of the plaintiff in an effort to show a new promise was insufficient to constitute a new promise to pay the note. It included a promise to pay interest which was necessarily eight per cent. "An express, positive and unconditional promise is generally held to be necessary." 16 Am. & Eng. Ency. of Law (2 Ed.), 790 and authorities cited under note 2. "A new promise to revive a discharged debt must, however, be clear, express, distinct and unequivocal and without qualification or condition." 5 Cyc., 408 and authorities cited under note 88. In Griel v. Solomon, 82 Ala. 85; Shockey v. Mills, 71 Ind. 288; Sedgwick v. Gerding, 55 Ga. 264; Meech v. Lamon, 103 Ind. 515; Elwell v. Cumner, 136 Mass. 102.

P. H. Cullen and J. C. Barrow for respondent.

(1) A promise made after discharge in bankruptcy, to pay a debt provable in bankruptcy, and from the liability to pay which the defendant was discharged, need not be in writing. Thornton v. Nichols, 11 Am. Rep. 304. Reith v. Lullman, 11 Mo.App. 254; Wislezenus v. O'Fallon, 91 Mo. 184; Swan v. Lullman, 12 Mo.App. 534; Mutual Reserve v. Beatty (C. C. A.), 93 F. 747; Worthington v. DeBardlekin, 33 Ark. 651; Ross v. Jordan, 62 Ga. 298; Way v. Sperry, 60 Mass. 238 (Cush.) , 52 Am. Dec. 779; Craig v. Seitz, 63 Mich. 727, 30 N.W. 347; Henley v. Lanier, 75 N.C. 172; Kull v. Farmer, 78 N.C. 339; Lanier v. Tolleson, 20 S.C. 57; Calloway v. Baldwin, 1 White and W. Civ. Cas. Ct. App. 592; Bank v. Flint, 17 Vt. 508, 44 Am. Dec. 351; Pratt v. Russell, 61 Mass. (7 Cush.) 462. (2) The promise made by the bankrupt and proved in this case is sufficient under the rule established by all well considered cases. Authorities, Supra. Katz v. Moessinger, 110 Ill. 372; St. John v. Stephenson, 90 Ill. 82; Cheney v. Barge, 26 Ill.App. 182.

OPINION

BLAND, P. J. (after stating the facts)

--1. By the discharge in bankruptcy the note was not paid, but the defendant's liability thereon was discharged, and the action is not on the note but on the new promise, the discharged debt being the consideration therefor. [Fleming v. Lullman, 11 Mo.App. 104.] Section 3706, R. S. 1899, provides: "Parties may agree, in writing, for the payment of interest, not exceeding eight per cent per annum, on money due or to become due upon any contract." The preceding section provides that where no rate of interest is agreed to be paid, six per cent shall be the legal rate. By reason of section 3706, supra, the defendant contends that an oral promise to pay a note bearing eight per cent interest per annum is unenforceable. This contention seems to us to be more subtle than sound. The note itself is the evidence of the debt, and furnished the consideration for the new promise and was, by the oral promise, incorporated into the contract to pay, and became, in a sense, a part of it; and while the note did not furnish the plaintiff's cause of action, it furnished written evidence of the sum agreed to be paid by the new promise.

2. The discharge of the debtor in bankruptcy does not satisfy the debt, but merely releases the debtor of his legal obligation to pay. The moral obligation to pay remains, and furnishes a sufficient consideration in law for the new promise to pay. This promise, to be enforceable, "must be an express, positive and unconditional promise." [16 Am. & Eng. Ency. of Law (2 Ed.) p. 790, Griel & Bro. v. Solomon, 82 Ala. 85, 2 So. 322; Shockey et al. v. Mills et al., 71 Ind. 288; Katz v. Moessinger, 110 Ill. 372; St. John v. Stephenson, 90 Ill. 82.] And the defendant makes the point that the evidence is insufficient to show an express, positive and unconditional promise on the part of the defendant to pay the note, and for this reason the court should have granted its instruction in the nature of a demurrer to the evidence. A promise in these words. "I do not intend you shall lose it. I will make it all right," made by a bankrupt to his creditor, was held not a sufficient new promise to revive the debt. [Meech v. Lamon, 103 Ind. 515.]

In Elwell v. Cumner, 136 Mass. 102, a debtor while in bankruptcy wrote to his creditor as follows: "I shall pay you all I owe you with interest, but at this time I cannot. As soon as I can, I shall pay you. When I can, I shall pay all my debts, and yours shall be the...