Case ID: mo_83/html/0021-01.html
Source: Caselaw Access Project
Author: {"author": "Ewing, C.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The Merchant’s Insurance Company of St. Joseph, Appellant, v. Hauck.
    1. Practice: instructions, It is not error to refuse an instruction which is embraced in Others given.
    2. -: - — :-. An instruction which is defective by reason of ignoring an issue in the case is cured by one properly embracing it.
    3. Principal and Surety: promissory' note, extension ’ oe payment: consideration. An extension of the 'time of payment o’f a promissory note,'for a definite period, by agreement between the payee and maker, will, if based upon a sufficient consideration, . discharge the surety, if made without the latter’s knowledge and consent. The payment of interest in advance in pursuance of such agreement is a good and valuable consideration.
    
      Appeal from Buchanan Circuit Court.- Hon. Silas Woodson, Special Judge.
    Affirmed.
    
      H. H. White and B. R. Vineyard, for appellant.
    (1) The plaintiff, by its charter, was authorized to take the note shed 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 aE 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 at 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. Nendig, 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 ahswer, 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 Judjge 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 thé 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 respe'c tively 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 be and David Pinger were sureties only for Pinger & Browne. '

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

“To the Merchants’ Insurance Company of' St. Joseph, Mo. ■ • ■■
Please voté upon tbe claim you bold against Pinger & Browne in favor of tbe composition proposed by them. Said claim is a note datéd October • 21st, 1870, for tbe ■sum of five ' thousand dollars, 1 signed by Pinger & Browne, David Pinger and myself. ' • ' '
■ •' [Sigbed] George M. IIauck.”

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

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

One of tbe plaintiff’s officers testified tbat tbe only offer be beard from defendant Hauch, was an offer to pay one-half of tbe balance after crediting the' composi-' tion payment in a note signed by himself and brother, which offer bad not been accepted by plaintiff.

Defendant, Hauck, on re-examination, testified that the only promise made by him to plaintiff, so far as be recollected, was a promise to pay one-half of the balance of said note after crediting tbe composition payment, by giving a note signed by himself and brother, wbicb offer was refused by plaintiff; that at that time, according to bis recollection, be did not know that tbe time of payment of the. note bad been extended from time to time for fixed and definite periods of time, in consideration of interest paid in advance.

Tbe plaintiff asked tbe court to give tbe following instruction:

3. ' If you believe from tbe evidence that defendant Hauck promised to pay tbe note in suit after full knowledge of tbe extension given to Pinger & Browne, you are instructed that be, by such promises, waived a right to claim a discharge from bis liability therein, even though be may not, at tbe time of making such promises (if you find from tbe evidence they were in fact made), have known or understood tbe legal effect of such extensions to have given him the - right to claim a discharge from such original liability ;* and if you find be has waived bis right to claim such discharge, if such right ever existed, you will find for plaintiff, and assess tbe demand. as directed in tbe first instruction. Wbicb was refused.

Tbe defendant moved the court to give tbe following instructions:

3. If tbe jury believe from- tbe evidence in this case, that tbe defendant, George M. Hauck, signed tbe note in proof as surety only, and that tbe said note, upon its maturity, was.renewed or extended as to tbe payment thereof for a fixed and definite time; or that said note, after its maturity, was from time to time, and for fixed and definite periods of time, so renewed or extended, as to its payment, without defendant’s knowledge or consent, and by agreement between plaintiff, or some agent of plaintiff, and Pinger & Browne, tbe makers of said note, or either of them, and in consideration oí the payment in advance by said Pinger & Browne, or either of them, of the interest for the period of time to which the payment of said note had been so renewed or extended, then the jury must find for defendant, unless they believe, from the evidence in this case, that after the said extensions or renewals, and with a full knowledge that the said note had been so extended or renewed by and under said agreement, for said fixed and definite periods of time, and in consideration of the payment of interest in advance, promised voluntarily, without any conditions or qualifications, to plaintiff, or some agent of plaintiff, to pay said note, or one-half thereof. And it devolves upon plaintiff to show, to the satisfaction of the jury, by a preponderance of the evidence, that the said promise was so made, and that the defendant, at the time of making the said promise, had the said knowledge.

5. The court instructs the jury that if they believe from the evidence in this case, that the defendant, Hauck, signed the note in proof, as security only for Pinger & Browne, as the makers thereof, and that at the time of the maturity of said note, or at any time or times subsequent thereto, an agreement was made between the plaintiff, or its agents, and the makers of said note for an extension of the time of payment of said note for a fixed and definite period of time, to wit: ninety-three days, and that the consideration of said agreement to extend the time of payment of said note was the payment of a sum of interest in advance, and that such agreement, if made, was made with the knowledge on the part of plaintiff that the defendant was a security only on said note, and that such agreement was made without the knowledge or consent of the defendant, then they must find for the defendant, unless they further believe from the evidence that after such agreement to extend the time of payment for a fixed and definite period of time, this defendant did, with full knowledge of the said agreement and of the payment of interest in advance as a consideration for the extension of time, promise unconditionally to pay one-half of the said note, and the burden of proving said promise to pay one-half, and of the knowledge of defendant as aforesaid, devolves upon the plaintiff. The payment of interest in advance, made in pursuance of an agreement to extend the time of payment of a note for a fixed and ■definite period of time, is a good and. valuable consideration.

The court, on its own motion, gave the following instruction, against the objection of plaintiff:

If you believe, from the evidence, that defendant Hauck promised to pay the note in suit after full knowledge of the extension given to Pinger & Browne, you are instructed that he, by such promises, waived a right to claim a discharge from his liability thereon, even (though he may not, at the time of making such promises (if you find, from the evidence, they were in fact made) have known or understood the legal effect of such extensions to have given him the right to claim a discharge from such original liability, and if you find he has waived his right to claim such discharge, if such*right -ever existed, you.will find for plaintiff, and assess'the demand, as directed in the first instruction. It is essen-L tial to the waiver claimed by defendant, that at the time of making it that he should have had full knowledge of the fact that an extension had been given for a definite period of time, and for a legal consideration.

The jury rendered a verdict for defendant. Judgment being rendered thereon the plaintiff appealed to this court.

I. The issues of fact in this case were sharply defined. The defendant alleging that plaintiff had, for a consideration, extended the time of the payment of the note, without defendant’s knowledge or consent,, whereby he was released and discharged from liability thereon. That he was only a surety for Pinger & Browne, which was known to plaintiff. The reply denied the allegations of the answer and pleaded' that defendant,; with Bill knowledge of all the facts, promised plaintiff.to pay the balance due on 'the note. With these issue?, thus-presented, the jury found for the defendant, and the only question is as to the instructions..

II. It is. insisted ■ by the appellant, that the trial court erred in refusing the third instruction asked'by plaintiff. The same question presented in plaintiff’s-third instruction, to wit: the defendant’s alleged waiver of his alleged discharge from liability, by his subsequent promise of payment, was fully and fairly presented in -the third instruction given for defendant, as well as in the instruction given by the court on its own motion. These instructions placed the question prominently before the jury which is all that can be.reasonably contended for by plaintiff.

III. , Objection is urged to, the third instruction given on behalf of defendant, in that it ignored the. question of plaintiff’s knowledge of Hauck’s relation as-surety at the time of .granting the extension? of payment. The same objection- might be urged to the plaintiff’s second instruction, but these alleged errors are cured by the fifth instruction given for defendant which clearly presents that very question to the consideration of the jury. The instructions given are moreover- within the principle clearly laid down in Stillwell v. Aaron, 69 Mo. 539, and St. J., F. & H. Ins. Co. v. Hauck, 71 Mo. 468. The latter case between the. same parties to the present - suit.

The judgment below is affirmed.

All concur. Hough, C. J., concurs in the result.