Case Name: William Hunt vs. Peter C. Chambliss
Court: High Court of Errors and Appeals of Mississippi
Jurisdiction: Mississippi
Decision Date: 1846-11
Citations: 7 S. & M. 532
Docket Number: 
Parties: William Hunt vs. Peter C. Chambliss.
Judges: 
Reporter: Mississippi Reports
Volume: 15
Pages: 532–543

Head Matter:
William Hunt vs. Peter C. Chambliss.
Where one surety on a note pays it, and files a bill against a co-surety for contribution, the defendant may prove by parol evidence the engagement actually undertaken by him when he signed the note.
In a controversy between two sureties on a note for contribution, the principal being equally liable to both, stands indifferently between them, and is a competent witness.
B. made anote with H. and others as sureties thereon, to a bank; when it became due, B. wished to renew it, but the bank would not permit the renewal to be made without the payment of a portion of the amount due, and additional security given. B. to obtain the renewal, paid the sum required by the bank, and requested C. to go on the note to be given in renewal, having previonsly obtained the names of the parties who were bound on the first note, and C. did so; judgment was obtained on the last note, and Ii. paid the money, and filed a bill against C. for contribution: Held, that C. was not a co-surety with H. and others for B., but a surety for B. and his original sureties, and therefore not liable for contribution to H.
On appeal, from the superior court of chancery; Hon.Robert H. Buckner, chancellor.
On'the 2d day of May, 1843, William Hunt fled a bill in the superior court of chancery, against Peter C. Chambliss, alleging that himself, Noah Barlow, Samuel Chamberlain, Isaac W. Arthur, and Zenas H. Fulton, partners in trade under the name of Arthur & Fulton, and Peter C. Chambliss, on or about the 15th day of February, 1837, made and executed their joint and several promissory note in favor of the president, directors and company of the Planters Bank of the state of Mississippi, for the sum of $15000, payable thirteen months after date, the consideration of which was a loan of that amount by the bank to Barlow, and that complainant and the other parties to the note were the accommodation securities of Barlow; that on or about the 23d June, 1840, the payees of the note obtained a judgment against all the above-named makers, in the circuit court of Adams county, for the sum of fl7,713^33, bearing 8 per cent interest, and costs amounting to about ¡$30; that executions of fieri facias had been issued to the counties of Adams, Jefferson and Washington in this state, where all of the defendants reside, and the sheriffs of said counties had returned that the defendants had no property out of which the debt and costs could be made; that in truth and in fact all of the defendants except the complainant and the defendant in this bill were entirely insolvent.
That complainant at different times since the rendition of the judgment, had been compelled to pay the largest part of it with all interest and costs, amounting to the sum of ¡$ 19,968 and he exhibited copies of the note, record of this judgment, executions and receipts of payments, and that the judgment was paid in full; that in equity, Chambliss who was solvent, ought to reimburse to complainant the one half of the amount so paid by him, with interest thereon as on so much money loaned ; that he had frequently applied to the defendant to make such contribution and he absolutely refused to do it. The prayer was that Peter C. Chambliss be made defendant and compelled, by a proper decree, to pay him the full half of the sum paid by him with interest, and for general relief.
The defendant, uniting a demurrer with his answer, admitted that the parties complainant and those mentioned in the bill, did about the time stated, make and execute their note in favor of the bank for the sum of ¡$15,000 payable thirteen months thereafter, and he supposed, but did not know the fact, that the note bound the parties jointly and severally, for he had no recollection of the form of the note. Defendant denied that the note was based upon a loan of that amount by the bank to Barlow, or that the other parties to the note were the accommodation sureties of Barlow; on the contrary he averred and charged that Barlow, William Hunt the complainant, Samuel Chamberlain, Isaac W. Arthur, and Zenas H. Fulton, together with Daniel G. Barlow, John G. Taylor, and Silas Sillard were indebted to the bank in the sum of $20,000 or thereabouts, and being so indebted and unable to pay the whole amount thereof at that time, it was agreed by the debtors and the bank, that the parties to the note should pay to the bank the sum of $5000, and that a new note should be given by the debtors, with this defendant as their security, for the sum of $15,000, payable thirteen months after date, and the defendant having confidence in the ability of Barlow, Hunt and others to pay the demand, consented thereto, and did sign the note as their security for the purpose aforesaid, and the note thus given was used by Barlow, Hunt and others in taking up their previous liability to the bank. Defendant believed that Barlow was the principal in the original debt of $20,000, and that Hunt, Chamberlain, Arthur & Fulton, D. S. Barlow, John G. Taylor, and Silas Sil-lard were in that transaction accommodation securities; he admitted the note had no other consideration than as herein stated, and so far as he was concerned it was without any consideration good or valuable in law, and inasmuch as it was not given for the loan of money, it was absolutely void in law, because the bank had no power under its charter to receive it; defendant did not admit that the complainant occupied the position of a security only in the note of $15,000. He admitted the recovery of the judgment against Barlow and other the defendants at the time, and for the sum stated; that executions had been issued, and some of them returned nulla bona or to that effect, but of the correctness of such returns he did not admit; he charged that they were untrue, and were either ordered to be so made by the plaintiff therein, or were caused to'be made by complainant or his. attorneys at law; that he did not know or admit the insolvency of the other -defendants, on the contrary, he averred that they were respectively in the possession and control of large estates, either by themselves or under cover of the names of other persons, and that any just debt of four or five thousand dollars could be made out of them respectively, if the proper means were employed; he stated that he had no personal knowledge of the payments made by complainant on the judgment, but he had been informed that he had made some payments in the depreciated paper (worth less than fifty cents on the dollar) of the bank, nor did he know or admit that complainant had paid the whole amount of the judgment, and required full proof of that fact. It was true he believed the judgment had been satisfied, but not fully by the complainant; he denied that any demand by complainant was made upon him for contribution, but if such a demand had been made he admitted that he would have refused to comply with it, because no valid claim existed against him, and because if complainant did pay the judgment it was done by an agreement made by and between the Planters Bank, Barlow and himself, without ever consulting with respondent, and because he was in law and equity bound to pay the judgment before respondent could be called on for any portion thereof, and because he obtained mortgage securities from or through Barlow for the payment of the note which ultimately secured the same, and being paid by the complainant to the bank, he was in a court of equity, or would be upon his motion, subrogated to the rights of the bank under the mortgage. Respondent showed that pending the suit at law, and before the recovery of the judgment therein, complainant instigated and procured the bank to take additional security for the payment of the note of $15,000, which was intended for the protection of complainant, and which was obtained and secured in the following manner, as respondent had since been informed and believed to be true, to wit: Barlow, acting under the urgent' solicitations of the complainant, procured one Deman B. Spencer,.who was either largely indebted to Barlow, or who was the holder of the legal title of the property mentioned for the use of Barlow, on the 7th day of July 1839, to mortgage to the bank the one undivided moiety of a lot in the city of Natchez, on which the City Hotel is erected, also an undivided half of all the household and kitchen furniture, apparatus and utensils &c. belonging to the hotel, for the express purpose of securing the payment of certain notes specified therein, the first of which is the $15,000 note mentioned in the bill; and he made the mortgage an exhibit to the answers. Respondent stated that divers executions were issued upon the judgment, and at that time the money could have been made out of the estate of Barlow, but by the interference of complainant time and indulgence were given, until Barlow became insolvent. Respondent further stated, that after the mortgage was executed, the property therein mentioned was surrendered to the bank about the month of April, 1841, for the purpose of securing the judgment and other debts therein mentioned; that the property was of large value, estimated at some sixty or eighty thousand dollars in good money, and had been rented at about six thousand dollars per annum since that time, as respondent was informed and believed; that negotiations touching the execution of the mortgage and putting the bank in possession of the property were principally made by complainant, and altogether by he and Barlow, which together with the time given by the bank on the judgment in consideration of the mortgage, all of which was done without the knowledge or consent of the respondent in equity, operated a full and entire release of respondent, and if complainant paid the judgment it was by his own management, and in pursuance of his own arrangements, without the consent of respondent, and therefore he is not responsible to complainant for one cent, either in law or equity.
The deposition of Noah Barlow being taken by the defendant, after objections to his competency as a witness, he being a party to the note, had been made by the complainant, and overruled by the commissioner, proved the consideration of the note, on which the judgment was recovered, was another note of $20,000, due the Planters Bank; that he paid the bank $5000, and the discount on the note for $15,000, and gave that in renewal of the balance due on the $2000 note; that at the time he called on Chambliss for his name on the new note, he informed him the other parties were already liable to the bank, and were solvent; and that the object of getting his name was to get time from the bank, which had been promised on getting an additional name; that the new note was accepted by the bank, and the old one given up.
That on the 7th of July, 1839, he procured of Spence a mortgage of one half of the City Hotel, in Natchez, in favor of the bank, to secure several notes, of which the note of $15,000 was one. In consideration of which, the bank agreed to extend the time of payment of the $15,000 note, and other liabilities of his to the bank, and did so extend the time; that he informed Hunt of the extension given by the bank, and he approved it; that he did not remember whether Chambliss knew it, as he had no recollection of seeing Chambliss about that time.
That after the date of the judgment, Spencer went to the bank and proposed, if they would give further time on the judgment, he would, on the 1st of April, 1841, give possession of all the property conveyed in the mortgage, to which the bank agreed. And on 1st of April, the bank did take possession of the hotel, and have held it ever sinee; he supposed the rent of one half of the mortgaged property was worth $3000 per annum, and the rent was to be credited on the debts due to the bank mentioned in the mortgage. That since the judgment witness had paid $500 or $600 upon it. The first payment made by Hunt of $4200 or $4300, was in the paper of the bank, which was depreciated, but he did not know how much ; that Cham-bliss was not bound by any other judgment in favor of the bank as his surety. On cross-examination, he stated that the agreement for extension of time between Spencer and the bank, was in writing. Complainant’s counsel then objected to his testimony as to that agreement; and the commissioner sustained the objection.
He .further stated that he applied to Chambliss to go on the note, without the knowledge of Hunt. He did so to obtain further time, which the bank refused, unless he would give additional surety. That the $20,000 note was his own debt, and that the other parties on it were sureties. That when he applied to Chambliss to go on the new note, he informed him that the bank required the addition of a good name, as she considered the former security impaired; but that he considered the other parties good, and did not think there would be any risk in signing the new note; he also stated that he was confident he could meet it himself; that the transaction was for wit ness’s accommodation, and at that time, and for some time subsequent, witness had ample means to pay the note.
He stated that the bank never gave him a stay of execution, nor did she delay enforcing the claim against him, but he understood from Hunt the bank agreed to wait with him, on getting one-third of the debt. That no money could then be made under execution out of any of the parties to the note, except Hunt and Chambliss.
Being reexamined by defendant, he stated that all the other names were on the note when he presented it to Chambliss for his signature; that Chamberlain and Arthur & Fulton continued solvent long after witness suspended payment, which was in the spring of 1840, and was occasioned by the magnitude of his debts contracted before the note was given. One half the City Hotel, in February, 1839, was, in his opinion, worth seventy-five or eighty thousand dollars; and the bank continues to receive the rent thereof.
■ The deposition of H. D. Mandeville, proved that the note for $20,000 was discounted for Barlow, and the proceeds placed to his credit in the Planters Bank; that it was satisfied partly in money, partly from the proceeds of exchange, and partly from the proceeds of the note for $15,000, discounted by the bank; that he did not know anything of any other security for the note, but from conversations with others, he believed the bank had a lien on the City Hotel; that he did not know who paid the $15,000 note, nor what kind of funds it was paid in ; that he knew of no proposition from Hunt relative to the $20,000 note, nor any written communication concerning the $15,000 note, though he believed Hunt did apply for a stay of the execution sent to Washington county, but witness could not find anything on the books of the bank authorizing a stay, and he did not know that any stay was granted; that he did not know that the note of $15,000 was sued on, but presumed it was, as it was handed to attorneys for that purpose ; that he knew of no other note for that sum, made by the same parties, and he believed the proceeds went to pay the note of $20,000. He did not know that the bank had assigned to Hunt any security on account of the note of $20,000 or $15,000, or subrogated him to the rights of the bank in any mortgage. The bank had made advances for the City Hotel, and received the rent, but had not received as much as she had advanced.
William Robertson proved that the $20,000 note was taken up in part by the $15,000; and that the payments which were made by Hunt, were made in the issues of the bank, which were not passing at their nominal value in gold and silver, when the payments were made; but he did not know the discount on them; that the bank advanced in cash to the City Hotel $5818 67, for repairs, &c. and had received in rents $4726 66; that the hotel rented for $4000 per annum, half of which was received by the bank, and that, none of the income from the City Hotel had been credited on the note for $15,000.
G. W. Koonts proved the value in gold and silver, of the Planters Bank issues, at the time of the several payments made by Hunt, to be from forty-five to eighty cents on the dollar.
The complainant proved, by S. B. Newman, that no money could be made out of N. Barlow, Arthur & Fulton, and Samuel Chamberlain, under execution, since November, 1840; that he ha<? known them for many years, and he was satisfied money could not have been made under execution against them, within eighteen months previous to 2d of January, 1844.
Arthur & Fulton proved that they paid for the use of Hunt, - on the 17th of December, 1840, $2350, for a check or draft of the Planters Bank for $2500.
Alexander Montgomery proved that he had the control of the judgment in favor of the bank, and but two stays were given, and they to Hunt only; no stay was given to Barlow ; that all the payments on the judgment were made by Hunt, and that all the other parties to the note were insolvent.
The original note was filed, and on its face was signed by Barlow as principal, and the other parlies as sureties. On the foregoing pleadings and evidence, the cause was submitted to the chancellor, and he, on the 12th day of June, 1845, rendered a final decree, dismissing the bill; whereupon the complainant prayed an appeal to this court.
Montgomery and Boyd, for complainant.
. The defence relied on is, that Hunt and Chambliss were not co-sureties of Barlow, but that all the parties to the note were principals as to Chambliss. This is based on the idea that the note of $15,000 sued on was a renewal in part of another note of $20,000, to which Chambliss was no party. The note, on its face ($15,000,) and the proof shows clearly that Barlow was the principal and the only principal, and the rest were his sureties. We object to the proof to contradict the face of the note. Also to Barlow’s competency to make such proof, if it can be made at all.
Sanders and Price, for defendant.
The ground of defence is, that defendant was not a security in the same degree with the complainant, for Barlow, in the debt paid by him, and for which he now seeks contribution, but was the security for both the complainant and Barlow, as it appears beyond all question ; that the note given and paid by complainant was made to take up another note, in which complainant was bound and in which defendant was no party and besides, when he signed the note, he was told by llarlow “that there was no danger, it was to renew a note in which Hunt and others were already bound,” &c.j under which circumstances he signed it, regarding himself not as security for Barlow merely, but as security for all the names above his, who were on the prior note. We contend, that the authorities as well as the familiar principles of equity, deny contribution in such a case. The doctrine of contribution is laid down by Theobald, in his work upon Surety and Agency, p. 197, § 287,. as follows : “ The right to contribution exists between all sureties of the same degree,” &c. P. 195, $ 282. “ This claim (of contribution) was first established in equity; and rests, as it seems, purely in that principle of morality which disapproves the infliction on one person alone of a demand to which others, in common with him, have made themselves equally liable ; or that one person should exclusively bear the burden of a payment from which others, in common with him, derive equal benefit. When, therefore, through the partiality of a creditor, an infraction of this principle takes place, a court of equity will interpose to remedy it, and will place the sureties relatively to one another in that state of equality with respect to the loss, which correspond with the equality of their risk and responsibility under their contract.” P. 200, § 286. “ If, upon becoming surety for a debt for which others also are sureties, the intention of any particular surety is to be liable only upon default of both the principal and the other sureties, those others are not entitled to contribution from him, he being regarded as the surety not only for their principal, but for them also.” The author then refers to the case of Craythorne v. iSamburne, 14 Ves. 160, overruling Cooke v.-, 2 Freem. 97.
George S. Yerger, on the same side.
The question, is whether Chambliss was a co-surety on the note, with complainant and others for Barlow, or whether he was not, in fact, a surety for complainant and others on the note. If the latter is the fact, Hunt, of course, is not entitled to contribution.
Could Chambliss become surety for all who preceded him on the note, although some of them were sureties? and if this fact be so, can it be proved by parol evidence ?
Suppose he had written opposite to his name, security for all the above parties; could he be made responsible beyond his undertaking? Was not this a contract that he would be liable only as surety for all ? So it has been expressly decided in. Harris v. Wanoell, 13 Wendell, 400. If then he could limit his contract by writing’opposite to his name, he was surety for all; if he does not write this opposite to his name, may he not prove his contract by parol testimony? May he not prove that when he signed, although he knew that some of the names were mere sureties, yet that he undertook as surety for them? If he is allowed to prove this, the evidence makes out such a case. The case of Craythorne v. Sambnrne, 14 Vesey, 160, directly decides, that such evidence is admissible, and that case is almost verbatim like this. The facts were nearly the same.

Opinion:
Mr. Justice Thachek
delivered the opinion of the court.
The decree of the chancellor dismissed the complainant's bill, from which an appeal was taken to this court. The first point in order presented by the record amply sustains the judgment of the chancellor, and therefore precludes the necessity of an investigation and opinion upon the other points which might equally warrant a similar conclusion.
It appears that Barlow and the appellant and others were liable upon a promissory note, payable to the Planters Bank of the state of Mississippi, in the sum of $20,000. The note was discounted by the bank for the benefit of Barlow, who was the principal, and Plunt and the others were his sureties. Upon the maturity of this note, Barlow sought its renewal from the bank, which agreed to his desire upon the payment of $5000 upon account of the note, and the addition of another name upon the note to be given for the balance, the bank conceiving the original security to have become impaired. Barlow applied to the appellee for the use of his name for this purpose upon the note to be given in renewal, informing him that the parties upon the original note were already bound to the bank, were amply solvent, and that the object of getting his name was to obtain time from the bank. At the period of Barlow's application to the appellee for the use of his name, the note in renewal had been signed by all the parties to it. Judgments at law were obtained against all the parties to this new note which was mainly paid by appellant, who files this bill for contribution from the appellee, who, alone of the parties, was deemed solvent.
The engagement actually undertaken by the appellee was susceptible of proof by parol evidence. It is evidence in support of the contract. No valid objection could be sustained to the competency of Barlow as a witness; he stood indifferent as to all the parties, being equally liable to them all.
The real question is, was the appellee co-surety with Hunt, the appellant, and the others, for Barlow, or was he, in point of fact, surety for Barlow and his original sureties, or so many of them as united in the note of renewal. Barlow and the others in the original note were interested in obtaining the renewal sought from the bank, and the appellee suffered his credit to be used to secure their object, but without any individual interest up to that time. The consideration of the original note was the discount of §20,000 for Barlow's benefit, but an additional and new consideration of the note in renewal was the time given by the bank to Barlow and his original sureties. Without the name of the appellee, or some other equally sufficient surety, the new note would have had no existence. As between the original parties and the bank, all were equally bound, and so between the parties to the note in renewal and the bank; but the same difference of obligation holds between the parties to the new note and the appellee, as existed between the original sureties and Barlow. This position rests upon a principle of equity, even if it were not still more substantially supported by the evidence respecting the actual and special contract of the appellee, which clearly was to become liable in the event the others did not pay, but not to become jointly liable with them. Craythorne v. Samburne, 14 Vesey, 160.
Decree affirmed.