Heaton v. Dickson
| Decision Date | 30 December 1910 |
| Citation | 133 S.W. 159,153 Mo.App. 312 |
| Parties | WARREN HEATON, Respondent, v. AMANDA V. DICKSON and MISSISSIPPI VALLEY TRUST COMPANY, Appellants |
| Court | Missouri Court of Appeals |
Appeal from St. Louis City Circuit Court.--Hon. James E. Withrow Judge.
AFFIRMED.
Judgment affirmed.
Harry H. Haeussler and Chas. J. Macauley for appellants.
(1) (a) One who writes his name upon the back of a promissory note of which he is neither payee, nor indorsee, and does so prior to its delivery, is prima facie a co-maker, and assumes liability as such in the absence of evidence that it was the understanding at the time that he should be held in some other capacity. Boyer v. Boogher, 11 Mo.App. 131; Schmidt Malting Co. v. Miller, 38 Mo.App. 251; Rossi v. Schawacker, 66 Mo.App. 67; Oexner v Loehr, 106 Mo.App. 412, s. c. 117 Mo.App. 698. (b) In the case at bar, plaintiff wrote his name across the back of the note sued on in the first count of his petition prior to its delivery to Rush the payee therein. And since there is no evidence to show that it was the understanding that he was to be held in some capacity other than that of co-maker, it will be presumed that he signed as a co-maker. And his payment of the note at the bank where it had been placed by Rush for collection, extinguished the original debt and cancelled the note. Therefore, plaintiff could not recover in an action on the note the amount he paid the bank; but his action, if any he has, is on the implied promise of the defendant, Dickson to refund to him the amount be paid the bank to take up the note. Secs. 4504-5, R. S. 1899; Curry v. LaFon, 133 Mo.App. 163; Burton v. Rutherford, Admr., 49 Mo. 258; Reynolds v. Schade et al., 109 S.W. 632, 131 Mo.App. 1; Burrus v. Cook, 215 Mo. 496; Bauer v. Gray, 18 Mo.App. 170; Williams v. Gerber, 75 Mo.App. 18; Faires v. Cockrell, 88 Texas at p. 436 and cases cited; Gieseke, Admr. v. Johnson, 115 Ind. 310; Burton v. Rutherford, Admr., 49 Mo. 258; Blake v. Downey, 51 Mo. 437; Halliburton v. Carter, 55 Mo. 435. (c) The assignment of the note by Rush, the payee therein, to plaintiff, after it was paid, did not have the effect to resuscitate the note or to vitalize it in the hands of plaintiff so as to enable him to sue and recover on it. Williams v. Gerber, 75 Mo.App. 18; Stevens v. Hannan, 86 Mich. 305; Burton v. Rutherford, Admr., 49 Mo. 258. (2) (a) Before one can maintain a creditor's bill, he must first have exhausted all of his legal remedies. He must show that he has no adequate remedy at law. Davidson v. Dockery, 179 Mo. 687; Wilkinson v. Goodin, 71 Mo.App. 394. (3) It was the intention of John S. Moore, in making his will to create a spendthrift trust, and the words used by him in his will are sufficient for that purpose and sufficient to show that such was his intention. Partridge v. Cavender, 96 Mo. 452; Smith v. Towers, 14 A. 497; Schoenich v. Field et al., 73 Mo.App. 452; Wagner v. Wagner, 244 Ill. 111; Baker v. Brown, 146 Mass. 369; Burnett v. Burnett, 217 Ill. 437; Lampert v. Haydel, 96 Mo. 439; Stombaugh's Estate, 135 Pa. 585; Kessner v. Phillips, 189 Mo. 524. In construing wills, the real intention of the testator shall be ascertained and effectuated. Where the idea is clear, the words employed must be read so as to give effect to the intention. Partridge v. Cavender, 96 Mo. 452; Gannon v. Bank, 200 Mo. 85 and cases cited; Brooks v. Brooks, 187 Mo. 476; Wisker v. Rische, 167 Mo. 533; Robards v. Brown, 167 Mo. 457. (4) The trust created by the will of John S. Moore is an executory or active trust. This being so, neither the principal nor the income thereof can in any way or manner be reached by the creditors of appellant Dickson, nor applied toward the payment of her debts. Schoenich v. Field, 73 Mo.App. 452; Pugh v. Hayes, 113 Mo. 424; Jarboe v. Hey, 122 Mo. 341; Lampert v. Haydel, 96 Mo. 439; 1 Perry on Trusts, Sec. 386a; Smith v. Smith, 70 Mo.App. 449; Mattison v. Mattison (Oregon), 100 P. Rep. 4; Partridge v. Cavender, 96 Mo. 452.
O. L. Cravens and W. Christy Bryan for respondent.
(1) The law is well established in this state, and universally elsewhere, that the accommodation indorser may recover from the makers, and that his cause of action is on the note itself. Peers v. Kirkham, 46 Mo. 146; Fenn v. Dugdale, 40 Mo. 63; Fenn v. Dugdale, 31 Mo. 580; Sharp v. Garnet, 54 Mo.App. 410; 7 Cyc. 1020; Keys v. Keys Estate, 116 S.W. 537. (2) While a general rule is that a creditor must exhaust his legal remedies before a court of equity will interpose for his relief, and the proper evidence of that fact is a judgment, execution and return of nulla bona, yet, when it appears that the judgment debtor is insolvent, and that the issue of an execution would be of no practical utility, such issue may be dispensed with. Merry v. Fremon, 44 Mo. 518; Turner v. Adams, 46 Mo. 95; Luthy v. Woods, 1 Mo.App. 167; Carp v. Chipley, 73 Mo.App. 22; Burnham v. Smith, 82 Mo.App. 135; Luthy v. Woods, 6 Mo.App. 67. (3) Where a debtor is a nonresident and has no property which can be reached by the ordinary or statutory process, but has funds held by an assignee for the benefit of creditors under the supervision of the court, a creditor's bill will lie without the necessity of first reducing the demand to a judgment and issuing an execution, and in such case it is not necessary to show an actual fraud or an attempt to defraud. Webb v. Lumber Co., 68 Mo.App. 546; Pendleton v. Perkins, 49 Mo. 565; Lackland v. Smith, 5 Mo.App. 153; City of St. Louis v. Lumber Co., 42 Mo.App. 586; Humphries v. Milling Co., 98 Mo. 542; Batchelder v. Aetheimer, 10 Mo.App. 181. (4) The right of plaintiff in this case to have the interest of Mrs. Dickson subjected to the payment of plaintiff's claim in the suit now pending is amply sustained by the following cases: McIlvane v. Smith, 42 Mo. 45; Pendleton v. Perkins, 49, 565; Lackland v. Garesche, 56 Mo. 267.
This is a proceeding in equity in the nature of a creditor's bill or an equitable garnishment. The finding and decree were for plaintiff, and defendant prosecutes the appeal.
Defendant Amanda V.Dickson is the beneficiary of a trust estate, settled to her use by the provisions of her father's will, and the important question for decision relates to a construction of that instrument. But there are other matters urged relating to plaintiff's right of recovery which should be first examined and disposed of. The bill is in two counts, each of which declares upon a promissory note, executed by defendant in favor of one, Rush, payee, to whose title plaintiff succeeded and of which notes he is now the holder. We will consider the matters urged against plaintiff's right of recovery on the note described in the first count only, as the argument relating to that sued upon in the second does not merit discussion in the opinion. It appears by the note declared upon in the first count that defendant executed the same to J. M. Rush on September 29, 1899. By its provisions, defendant promised to pay Rush $ 291.40 three months after date, with interest from date at the rate of eight per cent per annum until paid. On its face, the note recites that it was given for value received and is negotiable and payable without defalcation or discount; in other words, the note is in the usual form of a negotiable promissory note. Plaintiff Warren Heaton is an accommodation indorser thereon, for it appears that he signed his name on the back of the note as such before it was delivered. Afterwards, plaintiff, as such indorser, was required to pay the note, and he now prosecutes this suit against the maker of the note on the note itself, which he acquired by operation of law by discharging his independent obligation as indorser.
It is first argued that the suit on the note may not be maintained by plaintiff for the reason it appears he signed his name on the back of the instrument before delivery. It is said in such circumstances plaintiff is a co-maker of the note instead of an indorser and that therefore, upon paying the note, he extinguished the indebtedness vouchsafed therein and acquired the sole right to sue defendant for contribution on the implied undertaking which always obtains between the parties in such circumstances. The notes in suit antedate our Negotiable Instrument Law of 1905 and with that legislation we are not concerned. Under the rules of decision in this state pertaining to the law merchant, there can be no doubt of the general proposition that if one, who is neither a payee in the note nor an indorsee thereof, signs his name on its back before delivery, he thus becomes prima facie a co-maker of the note and not an indorser. [Boyer v. Boogher, 11 Mo.App. 130; Rossi v Schawacker, 66 Mo.App. 67; Oexner v. Loehr, 106 Mo.App. 412, 80 S.W. 690; Schmidt Malting Co. v. Miller, 38 Mo.App. 251; Otto v. Bent, 48 Mo. 23, 26.] It is true, too, that the payment of a note by a co-maker operates to extinguish its obligation and exclude an action thereafter on the note itself unless reissued. In other words, payment of the note by a co-maker confers a right upon him to sue other co-makers solely for a contribution of their proportionate part of the amount of his outlay in that behalf, not exceeding the amount of the note, interest and costs. [Curry v. Lafon, 133 Mo.App. 163, 113 S.W. 246; Williams v. Gerber, 75 Mo.App. 18.] But though such be the rule as to a co-maker, it is not so with an indorser. Contribution alone lies between co-makers because of the contractual privity which obtains between them, and there is no such privity between the maker of a note and a mere indorser, though there be an equitable right in the indorser to be subrogated with respect...
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