Farmers' Bank of Missouri v. Bayless

• Decision Date: 28 February 1865
• Citation: 35 Mo. 428
• Parties: THE FARMERS' BANK OF MISSOURI, Respondent, v. BAYLESS, HUDGENS et als., Appellants.
• Court: Missouri Supreme Court

35 Mo. 428

THE FARMERS' BANK OF MISSOURI, Respondent,

v.BAYLESS, HUDGENS et als., Appellants.

Supreme Court of Missouri.

February Term, 1865.

Error to Ray Circuit Court.

Hall and A. H. Vories, for appellants.

I. The note sued on in this case having been executed to the plaintiff by James F. Hudgens and Henry C. Garner in their individual names, and not in the partnership name of Wm. Hudgens & Co., (of which partnership defendants Bayless and Wm. Hudgens were members,) the same was not the note of, nor binding upon, said Bayless and Wm. Hudgens, and it makes no difference that the money for which said note was discounted was applied to the uses of said firm. (See Stor. on Part. § 134 to 142, § 102; Jaques v. Marquand, 6 Cow. 497; 3 Kent's Com. 41-4; 8 Pick. 411; 9 Mass. 119 to 121.)

II. Where one partner borrows money and gives his own security only for it, it does not become a partnership debt by being applied to partnership purposes with the knowledge of the other partners; the character of the debt is to be determined by the security given. (Gow. on Part. 154, and supplement to same, 43; Coll. on Part., 426 and following.)

III. The evidence in this case shows that the plaintiff had an account against the partnership firm of Wm. Hudgens & Co., and also against said James F. Hudgens, and that they were acquainted with the firm name of Wm. Hudgens & Co., which is conclusive evidence that the credit in the cause under consideration was given to James F. Hudgens and not to the said firm.

IV. The evidence shows that at the time of the execution of the note sued on, the firm of Wm. Hudgens & Co. had for some time been dissolved, and that at said time there was no firm in existence composed of Wm. Hudgens, James F. Hudgens, and Thomas H. Bayless; wherefore said James F. Hudgens could not bind the other individuals who had been members of said firm by any note executed by him, either in his own name, or in the partnership name or any other name, unless he had special authority so to do, (which is not pretended,) and the court ought to have so instructed the jury.

V. This suit is brought upon the promissory note named in the petition, in which it is alleged that the defendants executed the note by a certain description. If the plaintiff recovers, it must be on the ground that the contract or the note was binding upon all of the defendants against whom judgment is rendered, and it will be seen that the judgment of the court below was given upon the supposition that the note was the note of each and all of the said defendants. Wherefore it will not do for the plaintiff now to claim a right to recover upon the original consideration for which the note was given, and thus abandon the case made in his petition; and in fact if he had such case before the court, it is believed that the law would still be against him. (See authorities above cited; Stor. on Ag. § 147, 155 and 161.)

Ryland & Son and C. F. Garner, for respondent.

I. The note was properly admitted as evidence on the trial of this case, subject to be afterwards excluded according as the proof should warrant.

II. The note sued on is not the debt, it is but the evidence of debt. The note may by accident be burnt or destroyed, the debt still remains. (Woodward v. Winship et al., 12 Pick. 430; Virral v. Burrill, 16 Pick. 406.) As to confessions of one partner after the dissolution--Adiamo v. Maxey et als., 15 Mo. 39; Church v. Sparrow & Goodsell, 5 Wend. 223; Bank of Rochester v. Monteath et al., 1 Denio, 402; Richardson v. French, 4 Met. 579; Cole v. Sackett, 1 Hill R., 516; Shirley v. Jamson & Mandeville, 6 Cranch, 253; Swan v. Steel et al., 7 East. 210; Smith v. Craven, 1 Cromp. & Jer. 500; Brown v. Gibbins, 5 Bro. P. C. 491; Gardiner v. Childs, 8 Car. & P. 345; 1 Pars. Cont., § 11, p. 149-50; Stor. Part., § 138, 139, 142; Græffers v. Hetchman, 5 Watts, 454; Coll. on Part., 430, § 478, n.; Sandeland v. Marsh, 2 Barn. & Al. 673.

III. From the whole evidence in the case it appears plainly that the money was borrowed from the firm of Wm. Hudgens & Co., was used by the firm in their business, and the firm must have known that it was so borrowed and used, and that James F. Hudgens was in this business the agent of the firm; that the note originally given, and each renewal, was given and made with the knowledge of Bayless and Wm. Hudgens.

IV. There is no evidence to show that, at the time the money in the case was borrowed, the plaintiff had an account or any transaction with the firm of William Hudgens & Co. The renewal notes must be considered evidences of the original debt.

BAY, Judge, delivered the opinion of the court.

The Farmers' Bank of Missouri brought suit in the Ray Circuit Court against John W. Shotwell, Adm'r of the estate of James F. Hudgens, dec'd, William Hudgens, Thomas H. Bayless, Henry C. Garner, George H. Stewart, and Thomas L. Shaw, upon a negotiable promissory note, of which the following is a copy: “$3,700.--Lexington, Mo., December 25th, 1862. Six months after date, we promise to pay to the order of G. H. Stewart thirty-seven hundred dollars, for value received, negotiable and payable, without defalcation or discount, at the Farmers' Bank of Missouri. James F. Hudgens, H. C. Garner.” Upon the back of which were endorsed the names G. H. Stewart, Thomas L. Shaw. The petition alleges that James F. Hudgens, in his lifetime, with defendants William Hudgens and Thomas H. Bayless, by the name and description of James F. Hudgens and Henry C. Garner, by their negotiable promissory note dated as aforesaid, promised, for value received, to pay to the order of the said Stewart thirty-seven hundred dollars, negotiable and payable, without defalcation or discount, at the Farmers' Bank of Missouri; that said Stewart, for value, transferred by endorsement and delivered said note to said Shaw, who afterwards transferred by endorsement and delivered the same to the plaintiff, who is the legal owner and holder thereof. It is also averred in said petition that said note was given in renewal of a note originally discounted at said bank for the use and benefit of the firm of Wm. Hudgens & Co.--a firm composed of Wm. Hudgens, James F. Hudgens, and Thomas H. Bayless, and that said firm received, and used in their firm business, the proceeds of said original note, which was renewed from time to time for the benefit of said firm.

The petition further states that Wm. Hudgens and Thomas H. Bayless are surviving members of the firm of Wm. Hudgens & Co., and that Thomas H. Bayless, as surviving partner, is administering the partnership effects of Wm. Hudgens & Co., and that John W. Shotwell is the administrator of the estate of James F. Hudgens, dec'd.

The suit was instituted by summons, but afterwards an attachment issued in aid thereof. The defendants Wm. Hudgens and Thomas H. Bayless appeared and answered, and a default was taken as to the other defendants with the exception of Shotwell, and as to him the suit was dismissed.

The answer of Wm. Hudgens and Thomas H. Bayless is, substantially, a plea of non est factum. They deny that they, together with the said James F. Hudgens, in his life time, made the note in question; and they deny that, together with the said James F. Hudgens, by the name and description of James F. Hudgens, they promised by said note to pay to the order of said Stewart the sum mentioned in said petition; and they deny that, by any name or description whatever, they, or either of them, ever executed the note sued on; the answer also denies that said note was given in renewal of a former note discounted at said bank for the use and benefit of said firm of Wm. Hudgens & Co., or that the proceeds of said alleged original note were used in the business of said firm.

By consent of parties the cause was tried by the court sitting as a jury.

To maintain the issue on the part of the plaintiff, evidence was offered tending to prove that the note in controversy was given in renewal of a former note as stated in the petition. Daniels, a witness on the part of the plaintiff, stated that he was a clerk in the bank, though not at the time of the discount of the original note; that shortly after the death of James F. Hudgens, which took place in the latter part of 1862, Bayless and Shotwell came to the bank at Lexington, and Bayless requested witness to show him the indebtedness to the bank of James F. Hudgens, and also the firm of Wm. Hudgens & Co.; witness showed Bayless the books containing the same; didn't know that Bayless saw all the entries of the notes or not, but he had an opportunity of doing so; Bayless wanted to know if the notes could be renewed; witness replied that he presumed they could by paying calls. Witness further stated that from memorandums taken from the books as they appeared when Bayless was there, the notes on the books from both James F. Hudgens and Wm. Hudgens & Co., were as follows, to-wit: James Hudgens' note for $3,700, discounted originally January 27, 1858, made by James F. Hudgens, James Iler, and C. P. Reeves, and endorsed by Joseph Chew and A. K. Reyburn, which note had been renewed from time to time until January 28, 1863, when it was renewed by Bayless in the name of Wm. Hudgens & Co.; also another note of James F. Hudgens for $1,700, discounted March 2, 1859, made by James F. Hudgens, Joseph Chew, and C. P. Reeves, and endorsed by A. B. Conrow, renewed from time to time until after the death of Hudgens, when it was renewed by Bayless in the name of Wm. Hudgens & Co.

The notes of Wm. Hudgens & Co. were as follows: One discounted May 2, 1861, for $772.14, made by Wm. Hudgens & Co., A. H. Conrow, and C. P. Reeves, and endorsed by C. T. Garner; another note for $750.61, discounted the same day, and made by Wm. Hudgens & Co., A. H. Conrow, and C. P. Reeves, and endorsed by T. C. Garner, both of which were renewed from time to time in the name of Wm. Hudgens & Co., and have since been paid.

Neither of the notes originally...