Thompson & Thompson v. Brown

• Decision Date: 05 November 1906
• Citation: 97 S.W. 242,121 Mo. App. 524
• Court: Missouri Court of Appeals
• Parties: THOMPSON & THOMPSON v. BROWN.

97 S.W. 242

121 Mo. App. 524

THOMPSON & THOMPSON v. BROWN.

Kansas City Court of Appeals. Missouri.

November 5, 1906.

1. BILLS AND NOTES—INDORSEMENT BY STRANGER—EFFECT.

While the presumption is that a stranger signing on the back of a note is a maker, yet if he signs after the note is executed he is a guarantor.

2. LIMITATION OF ACTIONS—PART PAYMENTS BY GUARANTOR—EFFECT AS TO MAKER.

Payments made by a guarantor on a note will not arrest the running of limitations in favor of the maker.

3. SAME—EFFECT AS TO GUARANTOR.

While a payment on a note by a guarantor will not keep it alive as to the maker, it will as to the guarantor.

4. JUDGMENT — CONCLUSIVENESS — PARTIES— GUARANTOR ON NOTE.

Failure to recover judgment in an action against the maker of a note, the guarantor not being a party, will not preclude a subsequent judgment against the guarantor.

5. LIMITATION OF ACTIONS — PAYMENT BY GUARANTOR.

The five-year statute of limitations applies to a cause of action arising on payment of the principal's debt by a guarantor who has indorsed such principal's note.

6. SAME — EFFECT OF LIMITATIONS — SUBSEQUENT PAYMENT BY GUARANTOR.

Since a guarantor cannot hold his principal for a payment made upon an obligation invalid as against such principal, a guarantor who has indorsed a note, and whose claims against the maker for past payments are barred by limitations, cannot revive such claims by making a payment, after limitations have barred the claim of the payee against the maker.

7. WITNESSES — COMPETENCY — TESTIMONY AGAINST REPRESENTATIVES—DECEDENTS.

Limitations having been pleaded in an action brought on a note by those acquiring it from the representatives of the deceased payee, payments alleged to have tolled the statute were proved to have been made by a stranger to the note, whose name appeared as indorser, and who was not a party to the litigation. The claims against the maker arising from such payments by the indorser were barred by limitations, even though the payments were made by the indorser as a guarantor. Held that, since the payments would keep the note alive as against the indorser, whether made as guarantor or co-maker, and since the outcome of the litigation could not prevent judgment against him, and since he could not by a subsequent payment as a guarantor revive his claim against the maker for past payments, he was not precluded from testifying that he signed the note as a guarantor, by Rev. St. 1899, § 4652, providing that where one of the parties to a contract in issue is dead the other party cannot testify "in his own favor" in relation thereto.

Appeal from Circuit Court, Buchanan County; H. M. Ramey, Judge.

Action by Thompson & Thompson against

Lida E. Brown. From a judgment in favor of plaintiffs, defendant appeals. Reversed and remanded.

W. B. Norris, Joseph Morton, and Culver & Phillip, for appellant. Thompson & Thompson, for respondents.

ELLISON, J.

On December 28, 1889, George M. Brown executed a nonnegotiable note for $600 to George W. Yowler. On the back of the note the name J. F. Tyler is indorsed. Both Brown, the payor, and Yowler, the payee, died, and afterwards plaintiffs became the owner of the note after its maturity. Plaintiffs presented it for allowance to the probate court, where it was allowed. On appeal to the circuit court, the plaintiffs again prevailed. The defense is the statute of limitations. The plaintiffs seek to avoid the statute by payments made by said Tyler and indorsed on the note. A question arose whether these payments were made by Tyler in such capacity as to keep the note alive as against Brown, the maker. It was agreed by the parties that Tyler would testify that he indorsed his name on the back of the note after it was executed by Brown to Yowler, and as a guarantor; and Brown's estate, through counsel, now insists that putting his name upon the note in that way made him a guarantor, and not an indorser or maker, and that a payment by a guarantor did not toll the statute as to the maker. But the plaintiffs objected to the competency of Tyler to testify, on the ground that Yowler, the payee of the note, was dead. The trial court sustained the objection. The correctness of this ruling is presented for decision.

There is no doubt that if Tyler was a competent witness the defendant would have established that he was a guarantor of the note, since while the presumption is that signing on the back of a note to which he is a stranger makes such signer a maker, yet if he sign after the note is executed he is a guarantor. Adams v. Huggins, 73 Mo. App. 140. If he was a guarantor, the payments made upon the note by him will not arrest the running of the statute of limitations in favor of the maker. The guarantor is not a joint obligor on the same contract, for his contract is separate and distinct from the undertaking of the maker. Maddox v. Duncan, 143 Mo. 613, 45 S. W. 688, 41 L. R. A. 581, 65 Am. St. Rep. 678; Corbyn v. Brokmeyer, 84 Mo. App. 649; Adams v. Huggins, 73 Mo. App. 140. While it is true that, when the name of a stranger to the note appears indorsed upon the back thereof, he will be presumed to be a maker, yet such presumption will not stand against evidence to the contrary; the real character of his obligation may be shown. Herrick v. Edwards, 106 Mo. App. 633, 81 S. W. 466.

The question, then, may be stated thus: Was Tyler, the living guarantor, a competent witness against Yowler, the deceased payee, or, as applied directly to this case, against these plaintiffs, whose claim, as assignee of the note, comes through Yowler? The statute (section 4652, Rev. St. 1899) reads as follows: "In actions where one of the original parties to the contract or cause of action in issue and on trial is dead * * * the other party to such contract or cause of action shall not be permitted to testify either in his own favor or in favor of any party to the action claiming under him," etc. It will be noticed that the...