Merchant's Ins. Co. of St. Joseph v. Hauck

• Decision Date: 31 October 1884
• Citation: 83 Mo. 21
• Parties: THE MERCHANT'S INSURANCE COMPANY OF ST. JOSEPH, Appellant, v. HAUCK.
• Court: Missouri Supreme Court

83 Mo. 21

THE MERCHANT'S INSURANCE COMPANY OF ST. JOSEPH, Appellant,

v.HAUCK.

Supreme Court of Missouri.

October Term, 1884.

Appeal from Buchanan Circuit Court.--HON. SILAS WOODSON, Special Judge.

AFFIRMED.

H. K. White and B. R. Vineyard, for appellant.

(1) The plaintiff, by its charter, was authorized to take the note sued on. (2) Plaintiff's third instruction should have been given. Porter v. Hodenpuyl, 9 Mich. 11; Bank v. Whitman, 66 Ill. 331; Hinds v. Ingram, 31 Ill. 400; Rindskoff v. Doman, 28 O. St. 416; Long v. Disner, 71 Mo. 452. (3) The general denial of the allegations contained in the new matter of defendant's answer, and the further reply that defendant, after all the payments referred to in the answer, well knowing the facts connected therewith, promised to pay the balance due on the note, were not inconsistent. Both might have been true. Nelson v. Brodhack, 44 Mo. 596. The reply was not a departure from the petition, and if it was, advantage of the error should have been taken by motion. Railroad Co. v. Doyle, 18 Kas. 58; Mortland v. Horton, 44 Mo. 58. (4) Defendant's third instruction totally ignored the question of plaintiff's knowledge of Hauck's relation as surety at the time of granting the extensions in proof. Such knowledge on the part of the creditor is essential to the discharge of a party to the obligation by extensions granted to a principal, unless such relation was disclosed upon the face of the obligation. Neil v. Hendig, 2 Met. (Ky.) 247; Wilson v. Foote, 11 Met. (Mass.) 285; Davenport v. King, 63 Ind. 64; McClosky v. Ind., &c., Union, 67 Ind. 86; Nichols v. Parsons, 6 N. H. 30; Kaign v. Fuller, 14 N. J. Law, 419; Agnew v. Merritt, 10 Minn. 308. (5) Defendant's fifth instruction is erroneous in that it ignores plaintiff's evidence that defendant, after full knowledge of all the facts, had promised to pay the whole of the note. (6) The law of Missouri, previous to 1879, as declared in the decisions of the Supreme Court was that an agreement with the principal on a note for an extension of the time of its payment in consideration of the receipt of interest paid in advance, did not release the surety. Marks v. Bank of Missouri, 8 Mo. 316; Wiley v. Hight, 39 Mo. 130; Hosea v. Rowley, 57 Mo. 357; Farmers' and Traders' Bank v. Harrison, 57 Mo. 306; Carter v. Mesner, 58 Mo. 549. All the payments and alleged extensions of time of payment in the case at bar were made before this rule of property had been disturbed by the case of Stillwell v. Aaron, 69 Mo. 539, in 1879. It is the duty of this court to hold that agreements made on the faith of the law as it existed before the change shall be governed by that law. Hammon v. Douglass, 50 Mo. 436: Douglass v. County of Pike, 101 U. S. 686; Long v. Long, 79 Mo. 644; McNichol v. U. S. M. R. Agency, 74 Mo. 471.

Spencer & Hall for respondent.

The original cause of action in the petition was a cause of action against Hauck as a principal in the note; the cause of action as averred in the reply, was against Hauck as a surety, once released from liability, who had waived said release. This was a departure. Magruder v. Admire, 4 Mo. App. 134. If the reply did not plead a waiver by Hauck, then there was no departure, but there was a fatal variance between the allegations of the petition and the proof, and the judgment is for the right party. All the evidence in the case proved that Hauck was a surety. The third instruction given for defendant ignored no issue in the case. But the second instruction given for appellant submitted the same issues to the jury concerning the extensions as the third for defendant, and the trial court will not, therefore, reverse the judgment for any error in defendant's third instruction. The fifth instruction given for defendant did submit the question of the knowledge of Hauck's suretyship on the part of appellant at the time of the extensions. The jury must have understood from all the instructions given by the court, that if Hauck promised to pay the note, or his half thereof, that thereby he waived his discharge from liability. The payment of interest in advance is a sufficient consideration to support an agreement for the extension of time in the payment of a note. Stillwell v. Aaron, 69 Mo. 539; Ins Co. v. Hauck, 71 Mo. 468.

EWING, C.

This suit was commenced to recover an alleged balance on the following note:

“Ninety days after date we promise to pay to the order of David Pinger, five thousand dollars for value received, negotiable and payable without defalcation or discount at the office of the Merchants' Insurance Company, St. Joseph, Missouri, with interest at the rate of ten per cent. per annum from maturity.

PINGER AND BROWNE,

GEORGE M. HAUCK.”

Defendant filed an amended answer, admitting the execution of the note, alleging that he and Pinger were joint sureties merely for Pinger and Browne, and that such relation was known to plaintiff; that plaintiff, without his knowledge or consent, for a valuable consideration, had extended the payment of said note for a definite time, and that thereby he was discharged.

The reply denied the allegations of the answer, and alleged that defendant, Hauck, after all the payments made, referred to in the answer, and well knowing all the facts and circumstances connected with such payments, and well knowing the effect thereof, and well knowing the insolvency of Pinger & Browne, promised plaintiff to pay it the balance due thereon.

The case was tried before Judge Woodson, as special judge. The corporate capacity and organization of plaintiff, as charged, were admitted, and the note read in evidence.

The defendant, to maintain the issues on his part, introduced evidence tending to show that when the note sued upon fell due, to wit: January 29th, 1871, the plaintiff, in consideration of $129.17, then paid it by Pinger & Browne, the principals in said note, said amount being the interest on the principal sum for ninety-three days, extended the time for payment of said note for such period of ninety-three days; that thereafter, regularly at the expiration of each successive period of ninety-three days, for the same consideration it granted similar extension of time until August 22, 1874, when a last extension was made for a like consideration for a like period of ninety-three days. The note sued on showed all of said payments of interest being severally indorsed thereon at the times respectively made, being ninety-three days apart, and each for the sum of $129.17. Defendant, being sworn on his own behalf, testified that he had not known that the note was not paid till after August 22, 1874; that he had not known of said extensions to the principal makers of said note, nor had he consented that they might be made; that he and David Pinger were sureties only for Pinger & Browne.

On his cross-examination he testified that when Pinger & Browne failed, in September, 1874, he found that the note was still in existence; that Pinger & Browne, having become bankrupts, had proposed a composition with their creditors; admitted the following paper was signed by him:

“To the Merchants' Insurance Company of St. Joseph, Mo.

Please vote upon the claim you hold against Pinger & Browne in favor of the composition proposed by them. Said claim is a note dated October 21st, 1870, for the sum of five thousand dollars, signed by Pinger & Browne, David Pinger and myself.

[Signed]

GEORGE M. HAUCK.”

Did not remember signing this paper, nor did he remember that at the time of the composition that he was desirous of seeing it effected, except as a friend of Pinger & Browne.

In rebuttal, plaintiff introduced evidence tending to show that after the last payment of interest on said note by said principals, that said defendant had examined the note and its indorsements, and had then been told that it would not fall due under the last extension till November, 1874, which time had not at the time of such examination arrived; that he thereupon promised to pay said note, and afterwards urged plaintiff to accept said proposition for a composition offered by the principals, which it had refused to do until he signed the paper in question, and thereupon said plaintiff had voted in favor of such composition proposition, which had been carried, and the proceeds thereof credited on the note.

One of the plaintiff's officers testified that the only offer he heard from defendant Hauck, was an offer to pay one-half of the balance after crediting the composition payment in a note signed by himself and brother, which offer had not been accepted...