First Nat. Bank of Lumberton v. Hinton

• Decision Date: 15 March 1909
• Docket Number: 17,282
• Citation: 123 La. 1018,49 So. 692
• Court: Louisiana Supreme Court
• Parties: FIRST NAT. BANK OF LUMBERTON, MISS., v. HINTON et al

49 So. 692

123 La. 1018

FIRST NAT. BANK OF LUMBERTON, MISS., v. HINTON et al

No. 17,282

Supreme Court of Louisiana

March 15, 1909

Rehearing Denied June 19, 1909.

Appeal from Civil District Court, Parish of Orleans; Thomas C. W Ellis, Judge.

Action by the First National Bank of Lumberton, Miss., against J. H Hinton and others. Judgment for defendants, and plaintiff appeals. Reversed, and judgment rendered for plaintiff.

Pierson Walton & Pierson, for appellant.

McCloskey & Benedict, for appellee Hinton.

OPINION

MONROE, J.

Statement of the Case.

Plaintiff, a Mississippi corporation, sues Mrs. J. H. Hinton and the Camp & Hinton Company, the first named, as maker, and the last named, as payee and indorser, of two promissory notes, alleging that both defendants are domiciled in Lamar county, Miss. The notes, which are annexed to the petition, differ from each other only as to the amounts and time allowed for payment and in the fact that one of them has a credit of $ 800 indorsed upon the back of it. The one reads as follows:

"9,636.65. Lumberton, Miss., Sept. 7, 1907.

"Thirty days after date, I, we, or either of us, promise to pay to the order of Camp & Hinton Co., ninety six hundred, thirty six, 65/100, dollars, for value received, with interest at the rate of 8% per annum, after maturity, until paid. And, in the event default is made in the payment of this note at maturity and it is placed in the hands of an attorney for collection, an additional amount of ten per cent shall be added to the same as attorney's fees. The drawers and indorsers, severally, waive demand for payment, protest and notice of non payment of this note. Negotiable and payable at the First National Bank of Lumberton, Miss.

"No. 5,429. Due Oct. 1/10.

"[Signed] Mrs. J. H. Hinton.

"Address."

On reverse of note.

"Nov. 9. By cash, $ 800."

"Camp & Hinton Co.,

"[Signed] J. H. Hinton, President."

The other note is for $ 9,700.77, and is made payable in 60 days. The petition alleges:

"That petitioner acquired the said notes from Camp & Hinton Company for full, adequate consideration, before maturity. * * * That, by reason of the laws of Mississippi, where said parties, maker and payee of said notes had their domicile at the time, and where said notes were made and to be paid, the maker, the said Mrs. J. H. Hinton, wife of said J. H. Hinton, is separate in property from her said husband."

And she has the same power to contract and to bind herself and her property as though she were unmarried. That she is temporarily abiding in New Orleans. That the notes are past due and unpaid, and that demand for payment has been made in vain.

The Camp & Hinton Company allowed judgment to be rendered against it by default. Mrs. Hinton, joined by her husband, interposed certain exceptions, which were abandoned when called for trial, and they answered, in substance, as follows: They admit the signatures to the notes sued on. They deny that they are domiciled in Lamar county, Miss., or were there domiciled on September 7, 1907, and allege that they are citizens of Louisiana and have resided in New Orleans for more than four years last past. They allege that Camp & Hinton Company is a Mississippi corporation, of which J. H. Hinton is president, and in which he owns all the stock, save three shares, which are held by others in order that the law providing for the establishment of corporations may be complied with, and that said Camp & Hinton Company is therefore his (J. H. Hinton's) "own private, individual business, in the form of a corporation, of which fact plaintiff had full knowledge prior to the execution of the notes * * *"; that she (Mrs. Hinton) "was induced to sign the notes at the representations of said bank and at the request and instigation of her said husband for the purpose of binding herself and her paraphernal property for the payment of her husband's debts and obligations; that she was not benefited nor was her paraphernal property benefited, nor was it intended that she should be benefited by the execution of said notes, but, on the contrary, she, in ignorance of her rights under the law, was induced so to execute the same, all in violation of the prohibitory law of this state, where she and her husband were domiciled at the time, and under whose jurisdiction she was accorded the protection afforded by its laws; that said notes were never negotiated from the time of their execution, but were by preconcerted arrangement discounted by her said husband to the said First National Bank, "and your respondent, Mrs. J. H. Hinton, avers that the said notes as to her are illegal, null, and void, contrary to the public policy of this state, and should be so decreed. Further answering, and in the event that this court should hold, after trial, that, although your respondent and her said husband have lived continuously in this state for more than four years last past, they were not citizens of the state of Louisiana on the 7th of September, 1907, then, in the alternative, and without waiving the defense first set forth, your respondent represents that under the laws of the state of Mississippi, and particularly section 4001 of the Code of Mississippi of 1906, said notes were by her signed, used, and executed with all want of lawful consideration, to the knowledge of said plaintiff bank." We find the following to be the facts disclosed by the evidence adduced on the trial, to wit:

Prior to September, 1907, J. H. Hinton had been living with his family for 15 years at a home established by him at Lumberton, Miss., where the Camp & Hinton Company, of which he was president, owned and operated an extensive plant. The capital of the company was $ 300,000, divided into shares of $ 100 each, and Hinton owned all the shares save four, but the extent of his interest was not known to the officers of the plaintiff bank with which the lumber company had been doing business since 1901. In the fall of 1903 Mr. Hinton rented a house in New Orleans and brought his family here, and the following year he built a residence (which is said to belong to Mrs. Hinton), in which he and his family have since resided during the winter months, whilst his daughters are pursuing their studies at the H. Sophie Newcomb College, in this city. He also about that time established an office here and a lumber yard as adjuncts to his Lumberton business, and either then or later he and his family connected themselves with one of the city churches, and he became a member of one of the city clubs. He has, however, always maintained his residence and principal business at Lumberton, and he and his family have returned there every year in the spring after the commencements at the Newcomb College, unless they have visited Mrs. Hinton's parents, or father, at McComb City, Miss., or have traveled, for pleasure or business, in the North. There is no evidence in the record to justify the belief that in coming to New Orleans Mr. Hinton intended to abandon his domicile in Lumberton, or to establish his domicile here. To the contrary, it is shown that he has always been regarded as a citizen of Mississippi, and of Lumberton, that he has paid his poll tax and has been a registered voter there at least since April, 1904, and that on June 26, 1906, in view of a primary election, which was about to be held, he took the oath (required by law, to enable him to vote) that he was a citizen of the United States, and that he had resided in the state of Mississippi for two years, and in the county and precinct in which he desired to be registered for one year next preceding that date. On September 7, 1907, Mr. Hinton, as president of the Camp & Hinton Company, applied to plaintiff for a loan of $ 3,500, saying that he needed the money to meet the company's pay rolls. It appears, however, that the bank had shortly before that credited the company's account with certain checks, amounting to $ 10,000 or $ 12,000, drawn by the company on the First National Bank of Gulfport, which checks had been returned unpaid, thereby swelling the debit side of its account to over $ 19,000, and the president of the bank told Mr. Hinton that the bank could not extend any further credit to the company until the existing indebtedness should have been liquidated. Mr. Hinton explained that the company would have to shut down its sawmill unless it could obtain the $ 3,500 with which to pay its employes, and that such action would be disastrous to its interests, and it was then agreed that Mrs. Hinton, who was known to have means of her own, could take up the company's account with the bank by giving the two notes here sued on. Mr. Hinton then left the bank. The notes were drawn up by an officer of the bank, in accordance with the agreement, and were sent by the bank to Mrs. Hinton and to Mr. Hinton, as president of the Camp & Hinton Company, to be signed and indorsed, and, upon being returned so signed and indorsed, were taken as settling the existing debt of the company, and thereupon the $ 3,500 for which the company had applied was loaned to it. There was judgment in the district court in favor of defendant, rejecting plaintiff's demand, at its cost, with reservation of its right of action against defendant, ex aequo et bono, for $ 3,500, advanced by plaintiff to Camp & Hinton Company on the faith of plaintiff's notes, herein sued on, with interest, * * * if the same shall not have been paid by said company." Plaintiff has appealed, and defendant has answered, praying that the reservation be not allowed.

Opinion.

1. The question of...