Hoose v. Southwestern Machinery Co.
| Decision Date | 03 March 1913 |
| Parties | J. H. VAN HOOSE, Respondent, v. SOUTHWESTERN MACHINERY COMPANY, A. E. BENDELARI and A. GALAMBA, Appellants |
| Court | Missouri Court of Appeals |
Appeal from Jasper Circuit Court, Division Number Two.--Hon. David E. Blair, Judge.
AFFIRMED. (Cause remanded for trial.)
STATEMENT.--The plaintiff on May 13, 1910, filed a petition in the circuit court of Jasper county against the Southwestern Machinery Company, A. E. Bend elari, A. Galamba, William Fahrman, and George Hardy, together with other defendants unnecessary to be named in this opinion. The suit was instituted for a balance due on a promissory note for $ 7500, with interest. The note in question was signed by the Southwestern Machinery Company, as principal, and the defendants herein named as sureties, together with a number of the other defendants who were sureties. No answer was filed except by A. E. Bendelari and A. Galamba, each of them filing separate answers. The case was tried before a jury and resulted in a verdict and judgment in favor of the defendants Ben delari and Galamba. However, the court sustained a motion for a new trial and set aside the judgment for the reason that it was against the weight of the evidence, and the appeal is by said defendants from that order.
The facts in the case are substantially as follows: The Southwestern Machinery Company was indebted to the Merchants & Miners Bank of Webb City, Missouri, in the sum of $ 13,000 evidenced by three promissory notes, two of them being for $ 2500 each, and one for $ 8000, and it is with the latter that we have to do in this case. On this note there was credited a payment of $ 500. In addition to the name of the Southwestern Machinery Company, there appears on said note as sureties the names of the defendants herein together with other stockholders of said machinery company. In October, 1907 when the bank was insisting on the payment of this note, four of the stockholders of the machinery company, to-wit, George Hardy, William Fahrman, Ben Aylor, and Allen Hardy, Jr., the two first named being on the note to the bank as sureties and two last named not being on said note, according to their testimony agreed to each advance a one-fourth part of the amount necessary to take up said note, and that this agreement was carried out on or about January 16, 1908; that the money which they advanced was deposited in the bank to the credit of J. H. Van Hoose, who was a partner in the real estate business with Ben Aylor and officed with him and from the testimony undoubtedly sustained very friendly relations with all four of the men who put up the money with which to take care of the $ 8000 note in the bank; and the note was assigned by the bank to Van Hoose. He held the note from January 16, 1908, until the beginning of this suit, making no attempt to collect from the machinery company or from any of the sureties until probably a short time before suit was commenced, at which time he demanded payment of the two appealing defendants.
There is no doubt as to Van Hoose being the agent of these four men, and it is clear that he had no personal interest in the note nor any personal interest in the outcome of this litigation.
The evidence also discloses that said machinery company had become involved to other creditors (the debts being designated in the record "commercial bills") in an amount to exceed $ 20,000; that in order to take care of this indebtedness for the machinery company, Aylor, with some of the stockholders, executed a note to the same bank for $ 10,000, and that Allen Hardy, Jr., together with some of the stockholders, executed a similar note to the same bank for the same amount, the reason for this course being that the bank could not loan that great an amount of money to the machinery company. The $ 20,000 was placed to the credit of the machinery company and paid out on these "commercial bills." Then the officers of the machinery company to-wit, Ben Aylor, Allen Hardy, Jr., George Hardy, and William Fahrman, began to reduce the property of the machinery company to cash, and such proceeds as were realized were applied on their indebtedness to the bank, which indebtedness, as stated, had been created for the purpose of settling the company's debts. They applied probably $ 6000 on each note in this way. They also allowed the bank to get judgments against the company on the two $ 2500 notes, and permitted to be sold at execution sale certain of the company's property, at which sale the two appealing defendants were present, as were Ben Aylor and Allen Hardy, Jr.
The trial was begun on March 21, 1911, and was in progress until the twenty-third, on which day the jury failed to agree. During that trial, and on the twenty-second day of March, plaintiff dismissed the cause as to defendants, William Fahrman and George Hardy. On June 20, 1911, it was agreed between plaintiff and the two appealing defendants herein that the case would be continued until the next term of court, and at the next term, which was in November, the case was again tried and resulted in a verdict for the defendants. As we have stated, the appeal is from the order granting plaintiff a new trial.
AFFIRMED. (Cause remanded for trial.)
Frank L. Farlow and McIndoe & Thurman for appellants.
1. The agreement between Van Hoose and the cosureties and the president and treasurer of the corporation was an alteration of the instrument of contract of the defendant cosureties and was such an alteration as released the defendants as they are not shown to have consented thereto. It makes no difference whether the alteration of the agreement was material or immaterial. Banous v. Handley, 68 Mo.App. 623; Bank v. Bosseman, 52 Mo.App. 269; Midduh v. Elliott, 61 Mo.App. 601; Bank v. Dunn, 62 Mo. 79; Bank v. Armstrong, 62 Mo. 59. 2. A cosurety cannot sue a cosurety upon an instrument, and the cosurety cannot do through an agent or assignee that which he cannot do himself. The result cannot be changed by assignment to a third party. Hull v. Sherwood, 59 Mo. 172; Harper v. Rosenberger, 56 Mo.App. 388; Bank v. Kemble, 61 Mo.App. 215; Sherwood v. Coble, 24 Am. Dec. 264; Renell v. Hogan, 56 Am. Dec. 236; Brewing Co. v. Jordon, 110 Mo.App. 290; Burton v. Rutherford, 49 Mo. 255. 3. Where a surety pays the debt and an assignment is taken, the result is the same. It cannot be changed by having the assignment made to some third person. This rule is true not only as to notes, but as to judgment rendered thereon. Bank v. Kemble, 61 Mo.App. 215; Harper v. Rosenberger, 56 Mo.App. 388; Ferguson v. Carson, 86 Mo. 673; Renell v. Hogan, 56 Am. Dec. 236; Sherwood v. Coble, 24 Am. Dec. 264; Stales v. Gas Co., 131 S.W. 915. 4. Where a note is paid by the surety or joint maker, the assignment of the note does not have the effect to vitalize it in his hand. His right of action is not on the note but on the implied promise of the principal or surety to repay the money. Blake v. Downey, 51 Mo. 437; Halliburton v. Carter, 55 Mo. 435; Hearne v. Keath, 63 Mo. 84; Bauer v. Gray, 18 Mo.App. 164; Swope v. Leffingwell, 4 Mo.App. 525; Reeves v. Letts, 128 S.W. 246. 5. The act of Aylor and George Hardy in paying this note or depositing the money therefor was that of a volunteen and there can be no recovery. Crumlish v. Central Improvement Co., 38 W.Va. 390, 23 L. R. A. 120; Danforth v. Briggs, 89 N.W. 316; 36 A. 452. 6. The plaintiff dismissed as to two of the defendant sureties who were jointly liable and judgment was rendered in their behalf. It has long been established as a doctrine that if two or more persons be jointly or jointly and severally bound by one obligation and the creditor releases one of them, it releases all. Brown v. White, 29 N. J. L., 80 Am. Dec. 226; Portland v. Hiems, 6 Pa. 265.
A. E. Spencer and R. M. Sheppard for respondent.
1. A person who is not maker, indorser or surety upon a note, who makes a payment thereon, is a mere volunteer and has no remedy or recourse to recover from any maker, indorser or surety on said note any sum that he may have thus voluntarily paid; but where a stranger to a note purchases the same, if it is the intention of the parties to the transaction to make a purchase and transfer and assign the note to the stranger, then the stranger is not a volunteer, but becomes a purchaser or assignee of the note and may recover from the maker, indorsers and sureties. Bank v. Freund, 80 Mo.App. 657; Keet v. Baker, 141 Mo. 175; Vansandt v. Hobbs, 84 Mo.App. 628; Marshall v. Meyers, 98 Mo.App. 643; Crumlish's Admr. v. Improvement Co., 38 W.Va. 390, 23 L. R. A. 120; Kipp v. McChesney, 66 Ill. 460. 2. The question submitted to the jury in this case was whether or not it was the intention of Aylor and Hardy, acting through Van Hoose, who was their trustee and agent, to voluntarily pay and extinguish the obligation created by the note in question, or to purchase the note and keep the same alive and in full force and effect against the makers, indorsers and sureties. The evidence all shows that it was the intention of the parties to make a transfer of the note and not to pay it, and the trial court properly set aside the verdict and finding of the jury and granted a new trial. 3. Granting a new trial upon the ground that the verdict is against the greater weight and preponderance of the evidence is a matter within the sound discretion of the trial court, and his orders in this regard should not be set aside and revoked unless there is an abuse of this discretion. Snickles v. City of St. Joseph, 139 Mo.App. 187; Cornet v. Cabrilliac, 228 Mo. 212; Terpenning v. Nichols, 140 Mo.App. 505; Johnson v. Grayson, 230 Mo. 380; Digges & Garanflo v. Phillips, 138 S.W. 910.
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