Garner v. Hudgins

• Citation: 46 Mo. 399
• Parties: HENRY C. GARNER, Appellant, v. WILLIAM HUDGINS et al., Respondents.
• Decision Date: 31 August 1870
• Court: United States State Supreme Court of Missouri

46 Mo. 399

HENRY C. GARNER, Appellant,

v.WILLIAM HUDGINS et al., Respondents.

Supreme Court of Missouri.

August Term, 1870.

Appeal from Fifth District Court.

Hall & Oliver, for appellant.

Vories & Vories, for respondents.

BLISS, Judge, delivered the opinion of the court.

The petition recites that James T. Hudgins was director of the Farmers' Bank of Missouri, and that on the 28th of January, 1858, the firm of Wm. Hudgins & Co., composed of defendants and said James T. Hudgins, desired to procure a loan of $3,700; and for reasons set forth, the said firm, by the name of and through the position of said James T., procured said loan and used it in the firm business, the said James T. executing his note at six months, with sureties for said sum; and it being understood when said note was executed that its proceeds were for the use of the firm, and that the firm was to be liable for its payment. The note was renewed from time to time until its last renewal, on the 25th of December, 1862, with the same understanding and agreement, the said firm paying the interest at each renewal. The petition charges that at said date, defendant Bayliss, then transacting the business of the firm, acknowledged that said debt was obligatory upon the firm, and promised that the firm should pay it, and that the plaintiff became surety, upon said last renewal at the special instance and request of said firm, and specially that said Bayliss, acting for the firm, represented to and promised the plaintiff, at the time of said last renewal, that it was made to give said firm of Wm. Hudgins & Co. longer time to pay the debt; that the note was given for their benefit, and that they would pay it; and that the plaintiff, relying upon and induced by such representations and assurances, signed said note as surety. The petition further shows that the note was protested for nonpayment; that the said firm of Wm. Hudgins & Co. failed to pay the same and protect the plaintiff as their surety; that the said James T. Hudgins is dead, and his estate is insolvent and wholly unable to pay the same; and that the plaintiff, on the 20th of November, 1867, as such surety, paid upon the note the sum of $600, which he seeks to recover back in this action. To this petition a demurrer was filed, which was sustained by the Circuit and District Courts.

This court has already decided, in Farmers' Bank of Missouri v. Bayliss et al., 35 Mo. 428, and 41 Mo. 274, that this firm of Wm. Hudgins & Co. is not liable to the said bank either upon this note or for the money advanced upon it; and defendants now insist that if not so liable to the bank that discounted the note, they can not be held by a surety who has been compelled to pay it.

In the cases referred to, the court decided that there was no privity of contract between the bank and the said firm; that in discounting the note no credit was given to the firm, but only to the parties to the note; and that the fact that the money was borrowed upon the credit of the note, for the use of the firm, only created a creditor and debtor relation between the maker of the note and the firm. Certain remarks of the judge who delivered the opinion in the last case seem to have been relied upon by the courts below in sustaining the demurrer. The judge says, on page 288: “If the indorsers on the note are obliged to pay it, they have their recourse upon the maker, for whom they are sureties, and he may have his account against his firm, to whose use he has applied the money.” This is undoubtedly true; but it is not necessarily true that the indorsers' sureties have no other remedy against the insolvent maker.

In Higgins v. Dellinger, 22 Mo. 397, where one borrowed money to remit to his brother, and gave a bond with the plaintiff as surety, who afterward paid the bond, the court, without any direct evidence of the fact, but in furtherance of justice, held the person who borrowed the money to have been the agent of the one to whom it was remitted, and hence that the latter was holden to the surety; but Judge Leonard, in giving the opinion, remarked: “If, however, S. D. borrowed the money for himself, either to pay a debt he owed his brother or to make a loan to him, then F. (the brother) was not liable to the plaintiff, but to his brother's estate.” This case, then, to which we are referred by the present plaintiff, is not in point; for, as we have seen, this court has twice decided that the note in question was not the note of Wm. Hudgins & Co., but of James T. Hudgins, which is inconsistent with the idea that he executed it as their agent. Hence, if they are holden at all, it must be upon some other principle.

The engagement of defendants set out in the petition,...