Case Name: Union Bank of Tennessee vs. Mary P. Govan
Court: High Court of Errors and Appeals of Mississippi
Jurisdiction: Mississippi
Decision Date: 1848-01
Citations: 10 S. & M. 333
Docket Number: 
Parties: Union Bank of Tennessee vs. Mary P. Govan.
Judges: Mr. Justice Clayton, having been counsel in the court below, gave no opinion.
Reporter: Mississippi Reports
Volume: 18
Pages: 333–345

Head Matter:
Union Bank of Tennessee vs. Mary P. Govan.
Where a party to a negotiable paper, before its maturity, has changed his residence, and his removal is known, notice should be sent to him at his new place of domicil, if known, or if by reasonable diligence and inquiry it can be ascertained; but this rule presupposes knowledge of the removal; without such knowledge, notice, it seems, to the former place of residence will be sufficient.
Where, therefore, P., residing in Somerville, Tennessee, a distance of two hundred miles from Nashville, indorsed a note for G., also a resident of Somerville, to be discounted by a bank in Nashville, and that bank discounted the note, knowing the then residence of the parties, and, afterwards, at its maturity, G. paid part of the note, and renewed the residue by executing a new note, with P. as indorser, falling due at a subsequent period; shortly before the execution of which last note, P. had removed to Mississippi, but the knowledge of the removal was not brought home to the bank, it was held, that notice of protest of the second note sent by the bank to P., at Somer-ville, Tennessee, was sufficient; it would have been otherwise, if knowledge of the removal had. been brought home to the bank.
It seems that where, after a note has been protested for non-payment, the indorser executes a deed of trust to secure its payment, it would furnish strong presumption that notice had been received, or else waived by the subsequent agreement.
Where, immediately after the entry of the rendition of a judgment, the record recited, “ And the defendant agrees to stay execution until the first of May, 1840,” it was held, that even if by defendant was meant plaintiff, it did not appear that the stay was made on consideration, or to be binding on any party, and if a mere voluntary offer, it did not discharge a surety to the note on which the judgment was rendered.
An agreement to give the principal time, which will discharge a surety, must be positive and binding, based upon a valuable consideration, sufficient to tie up and restrain the creditor during the time for which the indulgence was given; therefore, where the plaintiff in a judgment directed the sheriff to hold up an execution against the defendant, until he should hear from him again, it was held not to be such a stay of the execution as would discharge a surety to the note on which the judgment was rendered.
An attorney at law, as such, has not power to grant a stay of execution to the principal defendant, that will discharge a surety ; unless he have express authority so to do from his client, a stay of execution by him will not be binding.
In error, from the decree of the vice-chancery court at Holly Springs; Hon. Henry Dickinson, vice-chancellor.
On the 23d of February, 1847, Mary A. Pugh filed her bill against the President, Directors and Company of the Union Bank of Tennessee, and others, in which she alleges, that on the 28th of February, 1838, Andrew R. Govan, being in debt to the bank, in order to secure it, made his note for $6,450.64, due twelve months after date, which she, with others, indorsed, payable at the bank at Nashville. At the time of making this note, and of its maturity, -she lived in Marshall county, Mississippi ; and never received notice of protest for the non-payment of the note, and did not know it was not paid until in September, 1841.
That in the year 1839, Govan, and the other parties to the note, were sued in Fayette county, Tennessee; the writ was served on Govan only; the suit was discontinued as to the others; and, in October, 1839, a judgment was rendered, when, by an agreement between the attorney of the bank and Govan, execution of the judgment was suspended until May, 1840, at which time an execution issued was levied on six hundred and sixty acres of land, worth $10 per acre, when, on the 26th day of August, 1840, the attorney of the bank gave written instructions to stay the execution until further orders. When these stays were given, Govan paid $1800 of this debt, and had ample property in Tennessee to pay the residue; but, by these stays, the lien was lost, and with it recourse to his property. In June, 1841, Govan died in Marshall county, Mississippi, greatly embarrassed, having previously conveyed his property in trust, to secure other debts.
That in the month of February, 1842, she was sued by the bank as indorser on this note, in Marshall county in this state; pending this suit, on the 16th of September, 1842, she executed a deed of trust to secure this debt, on certain named slaves, to William Crump and Charles L. Thomas, and time was extended to her by the bank until June 1, 1844.
When she proposed and executed this deed of trust, she was wholly ignorant of the course of the bank touching this debt, and of her own release; she was alarmed at the suit against her, and the bank, in order to entrap her into the execution of the deed of trust, suppressed and concealed from her these facts; that she was a merp accommodation party to the note. She prayed that the deed of trust might be cancelled, and she discharged from her indorsement.
The bank stated, in its answer, that on the 20th of February, 1838, it held a note for $9,238 then due, made by Govan, indorsed by Mary A. Pugh and others, which it had discounted for Branden, McKenna and Wright, who made a payment reducing the note to f6,450.64, and in renewal of the residue offered, and the bank accepted and discounted the note named in the bill. The bank states that it did not know where Mrs. Pugh lived when she indorsed the last note; when she indorsed the first, she and Govan lived in Somerville, Fayette county, Tennessee, as was well known to the bank, which never heard of her removal, and when the second note was protested, notice was duly sent to Somerville, which it is insisted was sufficient legal notice. That the suit against Mrs. Pugh was commenced on the 21st of February, 1842, and the note and protest were filed with the declaration, and, on the back of the protest the notary had indorsed, that the notice of protest was sent to Somerville, and this protest and the note remained in the papers from the time the suit was brought, until in consequence of the execution of the deed of trust, it was dismissed; that the deed of trust was executed when the suit was about to be called for trial, and on an agreement for forbearance, which facts the hank insists estop her from inquiring into the sufficiency of notice; and that her negligence in ascertaining the facts estops her.
The hank admits the suit against Govan, but denies all knowledge of the alleged stays of execution; or any authority to its attorney to make them, and insists if made by the attorney, they are not binding on the bank; that since the filing of the bill, the bank having heard of these stays, for the first time, by the bill, sought information on the subject, and found that an in-dorsement had been made on the clerk’s docket of the court in Fayette county, “ execution not to issue until the first Monday in May, 1840; ” but by whose authority this had been done, they had not been able to find out. They deny the stay alleged to have been made in August, 1840. The answer proceeds to detail at length the state of Govan’s property, and its disposition by him, in order to show that no loss of lien had been occasioned by these stays; but it is not deemed material to the case to set them out. The bank denies all concealment and fraud; insists that the second note was given in renewal of the first, and that Mrs. Pugh was a party to the first, and reaped the benefit of the indulgence granted, and could not, therefore, be considered an accommodation indorser merely.
The bank also states, that in January, 1844, Mrs. Pugh had filed her claim as indorser on this note, before the commissioner of insolvency on Govan’s estate, and been allowed the full amount of it, which it is contended is a bar to the relief sought by her.
Mary P. Govan, executrix of Mary A. Pugh, filed her amended bill, stating the death of Mrs. Pugh, insisting upon the facts of the original bill, and stating, in addition, that Mrs. Pugh was very old and infirm when she made the deed of trust referred to, and her business was managed by William Crump, as her agent; that ever since 183T, her post-office had been at Lama, in Marshall county, Mississippi, thirty miles from Somerville, which was two hundred miles from Nashville, and no notice had ever been sent there. That when the judgment was rendered against Govan, at the time of entering it up, it was agreed by the attorney of the bank and Govan, that there should be a stay of execution, but the clerk, by mistake, entered it in these words; “ The defendant agrees to stay execution until first of May, 1840;” she repeats again the stay of execution by the attorney of the bank in August, 1840, and filed a record of the judgment showing these facts.
She repeats the ignorance of these facts by Mrs. Pugh and her agent, and the wilful concealment of them by the bank and its agents, and insists that this fraud vitiated the deed of trust. She admits, that she had presented the claim to the commissioners of insolvency on Govan’s estate as a liability for him, which she might be compelled to pay, but denies that she thereby forfeited any of her rights; Govan’s estate was insolvent, and she had not received and was not likely to receive anything from it.
The bank answered the amended bill in detail, setting up the same facts and presenting the same issues that were presented by the original bill and answer, and demurring to much of the amended bill, because it was identical with the original bill, and had already been answered.
A great deal of proof was taken on each side; but in view of the positions taken by this court, it is not deemed requisite to set it out, the case having been in a great measure determined on the facts, as set forth in the pleadings in behalf of the complainant below.
It will be sufficient to state, that there was no proof that the bank knew of the change of Mrs. Pugh’s residence; or had ever given any authority to the attorney to make the alleged stays, or that they were made on any consideration, or upon what inducement or contract.
The vice-chancellor decreed, that the deed of trust be can-celled, and the bank and the trustees be perpetually enjoined from acting under it. The bank prosecuted this writ of error.
W. Yerger, for plaintiff in error,
Insisted, in a written argument of great length, in which he reviewed the facts of the case, that equity had no jurisdiction of the bill, except on the ground of the fraud of the bank, which was denied fully by the answer and the denial sustained by the proof. He contended, that the defence set up in the bill was waived by the execution of the deed of trust, and cited Tibbets v. Dowds, 23 Wend. 386; Robbins v. Pinchará, S S. & M. 51, and insisted, that if the complainant ever had a valid defence at law, she had voluntarily waived and abandoned it, and equity could not restore it to her. 6 Humph. 248; Edwards v. Roberts, 7 S. & M. 555.
F. Anderson, on the same side,
Made an oral argument on the law and facts of the case, in which he insisted, that, under the circumstances, the notice of protest was sufficient; the necessity, for notice, was dispensed with by the execution of the deed of trust, and the fact of notice could not be inquired into; that no fraud had been practised by the bank; sufficient to put Mrs. Pugh on the inquiry had been established, before she made the deed of trust; that the alleged stays of execution were not valid and binding, being merely voluntary, and beyond the scope of the power of an attorney at law.
Lucas, Watson, and Clapp, for defendant in error,
contended,
1. That the notice of protest was not sufficient to bind Mrs. Pugh. They cited 1 S. & M. 261; 4 S. & M. 177; 4 Hump. 39; lb. 519; 6 S. & M. 255.
2. That the attorney at law had power to give the stay of execution. 7 Cow. 739; 5 Peters, 98-112; 4 How. 246 ; 7 Cran. 436 ; 10 Johns. 221; 3 J. J. Marsh. 532; Sto. Ag. 53; lb. 85; 2 Pet. 329.
3. That the first stay in the judgment discharged the surety. 6 Munf. 6-9; 2 Rand. 333-435; 5 Ohio, 214, 215; 6 lb. 17; 5 Pet. 99; Sto. on Prom. Notes, § 413; 6 S. & M. 24-37.
4. The second Stay in August, 1840, had the same effect. Burge on Suretyship, 206 ; 2 Swanst. 585; 1 Munf. 269 ; 7 Leigh, 244; 6S.&M.238.
5. That the execution of the deed of trust under mistake and ignorance of her rights did not bind her. 4 Man. & Grang. 11 ; 4 Hump. 336; 23 Wend. 379; 5 S. & M. 51.
6. The dismissal of the suit, the forbearance and the other circumstances are not sufficient considerations to make Mrs. Pugh liable on the new assumpsit implied from the deed of trust, if not liable before; nor is she estopped from setting up her defence. Sto. on Cont. § 359; Sto. Eq. § 130; 5 Hump. 529-547; 9 Leigh, 342 ; 2 Rob. R. 271.
7. Under the facts a court of equity will give relief. 1 Sto. Eq. <§» 146, n.; 5 Hump. 529; 1 Sto. Eq. «§, 399, 400; lb. 140-142; 5 Pet. 99; Sto. Eq. § 235-237; 2 Lom. Dig. 318, § 57; 2 Exchq. R. 55-59 ; 29 Eng. Ch. R. 188-193; 2 Dessau. 162-169 ; 1 Pet. 1-15; Sto. Ag. 140; 1 Sto. Eq. § 408 ; 2 Tern. 609; 2 Hill (N. Y.) 451-464 ; 3 Hill, 262 ; 1 Sto. Eq. 399-400; 5 Call, 519 ; 13 Pet. 26; lb. 36-38; 8 S. & M. 139.
8. The presentation to the commissioners of insolvency on Govan’s estate is no bar to the complainant. 9 Mass. 332; Sto. on Prom. Notes, § 278 ; 8 Leigh, 164; 5 lb. 522 ; 6 How. 131.
George S. Yerger, for plaintiff in error.
1. The deed of trust admits Mrs. Pugh’s liability. It is presumptive evidence of notice to her. It is presumptive evidence that she had no legal defence. Robbins v. Pinchará, 5 S. & M. 51.
To avoid its effect she must prove negatively, 1st. That there was no legal notice, or 2d. That she was legally discharged by indulgence; 3d. That she did not know these facts; 4th. That she could not ascertain them by reasonable diligence.
As to notice, she must prove that the bank knew of her removal, otherwise the notice was good. 4 Hump. R. 39; 3 Wend. 408; 5 lb. 587.
2. The stay of execution by the attorney of the bank did not release her.
There is no averment in the bill that there was an agreement to let judgment go, on condition the stay should be given. There was no consideration; none, whatever. An execution could have issued the next day. Hamer v. Johnston, 4 How.
3. The attorney of the bank had no authority to make this agreement. 10 Johns. R. 220; 8 lb. 361; 1 Pick. 347; 2 Bibb, 382.
He has no authority to give time or indulgence so as to discharge a security. 3 J. J. Marsh. 532; 4 Dessau. 45.
4. The deed of trust was a distinct contract, founded on a good consideration, to wit, the dismissal of the suit, forbearance, &c.
If this contract is set aside, the bank cannot be placed in statu quo; the claim will be barred, and the recourse against the indorsers is lost. In such case clear and undoubted evidence is required, that she was defrauded, or — 1st. That she did not know the facts; 2d. That she could not, by reasonable diligence, have ascertained them.
5. The want of notice and the indulgence, were both de-fences at law; she could have made them in the suit brought. If she did not make the defence, but let a judgment go, or made a compromise or deed, thereby voluntarily abandoning her de-fence, equity cannot relieve her, unless for fraud, or clear palpable mistake or ignorance, which could not have been ascertained upon inquiry.
6. The proof of the notary having sent notice to Somerville, was filed in February, 1842, in the suit, and was in the papers until the deed of trust was executed, six months. Here was ample time and ample means to ascertain the fact.
1. Can a party, as a matter of policy and law, allege want of knowledge of a fact, which is plead as evidence in the cause, to get rid of a compromise or contract 7
2. She must have known she had no personal notice, if she did not receive the notice; and if she did receive it, she saw it was directed to Somerville.
A party who promises to pay, and who must know she has no personal notice, is bound. 5 Humph. 300 ; Breed v. Hill-house, 7 Conn. R. 523; 1 Story’s Eq. sec. 146; Chitty on Bills, 536; Howard v. Meek, decided at this term.
William F. Stearns, on the same side,
for the Union Bank of Tennessee, assumed similar positions in a written brief.

Opinion:
Mr. Chief Justice Shaekey
delivered the opinion of the court.
On the 16th of September, 1842, Mrs. Mary A. Pugh conveyed certain property in trust to secure a debt due to the Union Bank of Tennessee, and the object of the hill in this case is to have the deed cancelled, and to be relieved from the debt secured by it.
The history of the debt is this : — On the 19th day of October, 1837, a note made by A. R. Govan, indorsed by Mrs< Pugh and others, for $9228, was discounted by the bank. It fell due on the 23d of February, 1838. On the 20th of that month, Govan, the maker, made a payment which reduced the amount to $6450, and then gave a new note for that sum with the same indorsers, payable in twelve months. The maker and first indorser, Mrs. Pugh, resided at Somerville, Tennessee, when the original note was given, and at the time of its discount. Mrs. Pugh removed to Marshall county, in this state, some time in 1837, and on the 21st of February, 1842, suit was instituted against her in the circuit court of Marshall county. By giving the deed of trust, she obtained further time for the payment of the debt, and the suit against her was dismissed. The grounds relied on for avoiding the deed of trust are two; first, that she received no notice of the non-payment of the note by Govan, notice of non-payment having been improperly directed to her at Somerville, after she had removed to Mississippi ; and second, that the bank had sued Govan in Tennessee on the note; had recovered judgment, and had given such a stay of execution as discharged the indorsers, of which facts she was not apprized when the deed of trust was executed.
On the first point the case cannot admit of a doubt. It does not necessarily follow, that if the notice was insufficient, that it would be good ground for avoiding this deed of trust. It is a subsequent agreement, entered into with great solemnity, and would furnish a strong case for a presumption that notice had been received, or if not received, that it was waived by the subsequent promise. See Robins et al. v. Pinckard, 5 S. & M. 51. We shall not consider it, however, in this point of view, since we are satisfied the notice was sufficient. This note was made in renewal of a former note, due 23d of February, 1838. At the time of making, and at the time of discounting the original note, the parties resided at Somerville, and that fact was known to the bank. They had been credited as citizens of that place. The renewal was made under precisely similar circumstances, except that a change of residence took place shortly before the last note was made; the time is not precisely stated. The renewal is but a part of the original transaction, and the bank must be presumed to have renewed with a view to the same state of things. If Mrs. Pugh had, in the intermediate time, changed her domicil, it was her duty to have given information of that fact, inasmuch as she was entitled to notice of non-payment, so that she might protect herself.
Judge Story thus lays down the principle where a change of domicil has taken place. " If the party has changed his domi-cil after he became a 'party to the bill, and his removal is known, notice should be sent to him at his new place of domi-cil, if known, or if, by reasonable diligence and inquiry, it can be ascertained." Story on Bills, 356, sec. 297. The rule requiring notice to be sent to the new place of residence, or diligence to be used to ascertain it, presupposes a knowledge on the part of the holder that the indorser has removed. Without such knowledge there is no foundation for the exercise of diligence. The bank having transacted business with Mrs. Pugh whilst she resided at Somerville, some two hundred miles from the location of the bank, had no right, in a continuation of the original transaction, to presume that she had changed her domicil.
This case does not differ from the case of the Bank of Utica v. Davidson, 5 Wendell, 587. There the note was given in renewal. One of the indorsers had changed his reside n shortly before the date of the last note, but the bank not being aware of this, sent notice to the place where he had resided when the first note was made, and it was held sufficient.
Our conclusion is also fully sustained by the case of the Bank of Utica v. Phillips, 3 Wend. 408. In that case the indorser had removed after the note was made, but notice sent to the place of his former residence was held sufficient, because the holders had no reason to expect such an event, and no considerations of diligence could have prompted them to institute such an inquiry. The court say, where the place of an indorser's residence is established at the time when a note haviug the usual time of bankable paper to run, is discounted, and is at such a distance from the place of payment as to repel the presumption that a removal (in case it happens before the note falls due,) would come to the knowledge of the holders, and no actual knowledge is brought home to them, a notice of demand and non-payment, directed to such place of residence, is sufficient."
The case of McMurtrie v. Jones, 3 Wash. C. C. Rep. 206, was of a similar character. The indorser had removed before the maturity of the note, and notice left at his former boarding house was held sufficient.
The principle of these cases is, that where a party is contracted with or trusted, and is known at the time to reside at a particular place, the party has a right to act upon the presumption, in reference to all matters connected with the same transaction, that he continues to reside there, unless such presumption is rebutted by circumstances calculated to show that the party knew of the removal of his debtor. Any other rule would be fatal to the credit of negotiable paper.
But the case admits of this further remark. The question of diligence is not raised in this inquiry. It may be that proper diligence was used, even admitting that it was necessary. It does not follow, even in cases where the law requires the holder of negotiable paper to make inquiry as to the residence of the indorser, that every misdirection of notice will discharge the indorser.
In the next place, was Mrs. Pugh, as indorser, discharged because of the stay of execution given on the judgment against Govan in Tennessee?
The first stay of execution relied on is one which was given when the judgment was rendered. It follows the judgment in these words : " and the defendant agrees to stay said execution until the first of May, 1840." The bill alleges that this was an agreement made by the plaintiff's attorney, and not by the defendant as it was entered. It does not appear to have been made on consideration, or to be binding on any party. If, in the extent and nature of the argument, it was a mere voluntary offer, it was no discharge of the surety ; and, to test its validity, suppose execution had been sued out before that time, would any court have set it aside as irregular?
In the next place, after execution issued, the plaintiff's attorney wrote a note to the sheriff in the following words : " You will hold up the execution against A. R. Govan in favor of the Union Bank till you hear from me again." The decisions of this court are conclusive on this point. This direction given to the sheriff is almost identical with that which was given in the case of Newell & Pierce v. Hamer, 4 Howard, 684, which was held not to discharge a surety. This case is weaker than that in one point of view. There, the order was given by the plaintiff; here, it is given by the plaintiff's attorney. The principle there settled was, that an agreement which will discharge the surety, must be positive and binding, based upon a valuable consideration, sufficient to tie up and restrain the'creditor during the time for which the indulgence was given. The same principle has been reasserted in all the subsequent cases where the question has been raised. Payne v. Commercial Bank of Natchez, 6 S. & M. 24; Montgomery v. Dillingham, 3 Ibid. 647; Johnson v. Planters' Bank, 4 Ibid. 165; Wadlington v. Gary, 7 Ibid. 522. Neither of these agreements was founded on any new or valuable consideration, nor were they such as could be enforced in a court of justice.
But we cannot admit that, if these directions or agreements could be considered binding, the attorney had any power which would enable him to jeopardize the rights of his client. It appears very clearly in proof, that no such authority was given to the attorney by the plaintiff, and the authorities are very clear that he has no such power unless it is expressly given. It is in direct violation of principle. Clark v. Kingsland, 1 S. & M. 248; Dunn v. Newman, 7 How. 582; Garvin v. Lowry, 7 S. & M. 24; 10 Johns. 220; 1 Pick. 347.
The complainant therefore fails on both grounds taken, to show that the claim to relief is well founded. We shall not enter into an investigation of the question, as to how far the giving of the deed of trust was a waiver of any previous irregularity, as it is not necessary that we should decide that point.
Decree reversed, and bill dismissed.
Mr. Justice Clayton, having been counsel in the court below, gave no opinion.