Love v. Dakin

• Decision Date: 23 May 1927
• Docket Number: 26429
• Citation: 147 Miss. 835,112 So. 795
• Court: Mississippi Supreme Court
• Parties: LOVE, SUPERINTENDENT OF BANKS, v. DAKIN. [*]

112 So. 795

147 Miss. 835

LOVE, SUPERINTENDENT OF BANKS, v. DAKIN. ^[*]

No. 26429

Supreme Court of Mississippi

May 23, 1927

Division A

1. BILLS AND NOTES. Accommodation maker held not liable, where payee received proceeds of cotton belonging to accommodated party to pay note in accordance with agreement.

Accommodation maker held not liable on note, where, at time of its execution, payee agreed that proceeds of cotton crop raised by accommodated party and coming into hands of payee would be applied as credit thereon, and it was shown not only that proceeds of cotton sufficient to take up note came into hands of payee, but also that payee and accommodated party undertook to carry out agreement by stating that note was paid, since assurance that note was paid by application of such proceeds constituted payment thereof.

2. BILLS AND NOTES. Payee's assurance to beneficiary and' accommodation maker that proceeds of cotton were applied to payment of note constituted "payment" thereof.

Where note was executed by accommodation maker under agreement that proceeds of cotton belonging to beneficiary would be applied to payment, payee's assurance to beneficiary that proceeds were so applied, and' to maker that note was paid, constituted payment thereof.

3. BILLS AND NOTES. Agreement at time of executing accommodation

note for payment from proceeds of beneficiary's cotton held competent.

Agreement at time of execution of accommodation note, that payee would apply proceeds of beneficiary's cotton to payment thereof held competent, as showing consideration for note and explanation of payment by payee's subsequent assurance that proceeds were applied for such purpose.

HON. W A. ALCORN, JR., Judge.

APPEAL from circuit court of Bolivar county HON. W. A. ALCORN, JR. Judge.

Suit by J. S. Love, Superintendent of Banks, against Mrs. Maggie L. Dakin. Judgment for defendant, and plaintiff appeals. Affirmed.

Affirmed.

Flowers, Brown & Hester, for appellant.

The exact question presented in this case is: Can the maker of a promissory note avoid liability thereon by showing a parol agreement made contemporaneously with the execution thereof by which it was understood that the note was not to be the obligation of the maker but of another whose name does not appear on the instrument. The authorities in this state and elsewhere answer this question in the negative. Wren v. Hoffman, 41 Miss. 616; Pollock v. Holm, 54 Miss. 1, 28 Am. Rep. 342; Baskerville & Whitfield v. Harris, 41 Miss. 535; Heaverin v. Donnell, 7 S. & M. 244; Hawkins v. Shields, 100 Miss. 739, 57 So. 4; Earle v. Enos, 130 F. 467; Penn. Safe Deposit Co. v. Kennedy, 175 Pa. 164, 34 A. 660; Gillespie v. Campbell, 5 L. R. A. 698; United States Bank v. Dunn, 31 U.S. 51, 8 L.Ed. 316; Specht v. Howard, 83 U.S. 564, 21 L.Ed. 348; Brown v. Spoffard, 95 U.S. 481, 24 L.Ed. 508; Forsyth v. Kimball, 91 U.S. 291, 23 L.Ed. 352; Colbert v. First National Bank of Ardmore, 133 P. 206, 38 Okla. 391; Guthrie & Western Railroad Co. v. Rhodes, 19 Okl. 21, 91 P. 1119, 21 L. R. A. (N. S.) 490; McNinch v. Northwest Thresher Co., 23 Okl. 386, 100 P. 524, 138 Am. St. Rep. 803; Holmes v. Evans, 29 Okl. 373, 118 P. 144; Hercules Buggy Co. v. Hinde, 33 Okl. 85, 124 P. 27.

We submit that the cases cited are decisive of the question at issue in this case. The substance of the holdings of all the cases cited is, that a promissory note means what it says and a different meaning from that shown cannot be set up by parol proof.

In conclusion, we wish to state that there is nothing in appellee's situation to entitle her to sympathy from the court or any one else, should she be required to pay the note sued on. She signed the note at the instance of her husband, to assist the officer of the Bank of Commerce and Asa Moss, the party accommodated, in evading the law. She was advised by them that Moss had already borrowed from the bank all the money it was permitted to lend him. Our legislature, because of the knowledge and experience possessed by its members concerning the operation of banks, thought it wise to place a limit upon the amount of money that a bank might lend to any one individual. Appellee knew this was law and was advised that it was the purpose of Moss and the officer of the bank to evade it by having her sign the note sued on and allow Moss to receive the proceeds thereof.

Clark, Roberts & Hallam, for appellee.

It is not the contention of the appellee and it has never been her contention that she would never be requested to pay the note in question, nor was it her contention that no liability attached when she executed the note, but it is her contention that the note was executed in good faith by her for the purpose of lending her credit to Asa Moss and it is further contended by her that at the time of the execution of said note and as a consideration for her execution of said note it was agreed that the note was to be paid out of the first cotton sold after the payment of rents on the lands operated by the said Asa Moss. This agreement was made by the President of the bank and appellee, and the said Asa Moss. Appellee does not contend that if there had been no proceeds received from the sale of the cotton after the payment of the rents that she would not have been liable on the note, but she does contend that when the money from the proceeds of the cotton was paid, it was the duty of the officials of the bank to apply the money so received from the Association from the sale of Moss' cotton to the payment of the note in question.

The evidence is very clear that sufficient funds were received by the bank from the proceeds of the sale of Asa Moss' cotton through the association not only to provide for the payment of the rents, but sufficient to pay the note in question and to apply a considerable sum toward the payment of other notes executed by the said Asa Moss to the bank.

Under the facts in the present case a payment has been made even though the records of the bank do not show it and even though the note was in the possession of the bank when it was taken over by the superintendent of banks for liquidation. Alpena National Bank v. Greenbaum, 74 Mich. 157, 41 N.W. 885.

Appellee contends that it was perfectly legal for her to make an agreement with the President of the Bank of Commerce for a means or method of discharging the obligation in a manner different from that set forth in the note and this contention is supported by Certain v. Smith, 53 Ind.App. 163, 101 N.E. 319.

We think that the conclusion of appellant's brief is certainly an unfair statement, where appellant says that the "appellee signed the note at the instance of her husband to assist the officials of the Bank of Commerce and Asa Moss, the party accommodated, in evading the law." As a matter of fact the appellee lent her credit to Moss and assumed a liability which she was under no obligation to assume and for which the testimony shows she did not get one cent in order that the law might be complied with instead of evading the law.

The appellee contends that the authority cited by appellant referring to parol evidence to vary the terms of written instruments are not applicable in this case. Coke v. Blackbourn, 57 Miss. 691, says: "It is always allowable to show that the instrument sued on never was valid, either for fraud or illegality, or want of consideration, or for failure of some condition on which the instrument was to take effect; or that having been valid, from something occurring subsequently, it has ceased to be operative wholly or partially."

OPINION

MCGOWEN, J.

J. S Love, superintendent of banks, as the officer in charge of the Bank of Commerce of Boyle, Miss., filed his declaration against Mrs. Maggie L. Dakin, based upon a promissory note for seven hundred fifty dollars, dated July 1, 1925, and demanded judgment for the amount of the note, interest, attorney's fees, and costs. To this declaration the defendant, Mrs. Dakin, pleaded the general issue, and also gave notice under the general issue to the effect that she would show, on the trial, that she executed the note in question as an accommodation maker for the purpose of lending her credit to Asa Moss, who was dealing with, and...