Court Opinion

ID: 8299311
Source: CourtListenerOpinion
Date Created: 2022-10-17 11:10:48.317225+00
Date Added: 2024-06-11T16:44:13.814679
License: Public Domain

OPINION ON PETITION TO REHEAR.
Beard, J.
A petition for rehearing has been presented in this cause by W. IX Reeves and J. B. Layne. Before coining to the main ground upon which this petition is based, it is proper to mention a complaint made by petitioners that we failed to dispose of the assignment of error of J. A. Reeves, upon the action of the Chancellor in sustaining the demurrer of the petitioner to so much of his cross bill as sought a recovery against them for the interest due on the note of February 26, 1895. As this demurrer was rested on the ground that the subject of this cross bill was foreign to the controversy involved in the original suit, and was sustained by the Chancellor, it is difficult to conceive how petitioners could be in any way affected by our failure to dispose of this assignment of the adversary counsel. But whether petitioners were affected or not is immaterial. The omission was not the result of inadvertence, but deliberately made, for, on an examination of the transcript, we found that the case was not before us so that the action of the Chancellor on the demurrer could be reviewed; that while the cross complainant, at the time the demurrer to this cross bill was sustained, ‘ ‘ excepted ’ ’ to the action of the Chancellor in that regard, yet he did not embrace this matter in his appeal, but limited *55this to the final decree. Desiring to confine our opinion to the real issue in the case, we purposely omitted all mention of an assignment of error that was without substance.
Again, it is insisted “an inaccurate statement” in the opinion that “upon the dissolution of the mercantile firm of which Max. Layne and J. A. Reeves were the members, the former became indebted to the latter in the sum of $2,500, for which amount he executed his note on February 26, 1895, to J. A. Reeves, with the other defendants, W. D. Reeves and J. B. Layne, as sureties upon it,” gave J. A. Reeves an equity at the beginning to which he was not entitled. It is difficult for us to conceive how the accuracy of our statement in this regard can be successfully challenged, in the face of this record. Max Layne, in his deposition, says: “Made said note in February, 1895. The note was given for $2,500, I agreeing to release J. A. Reeves from a co-partnership formed for the purpose of conducting a clothing . . . business, provided he would make me a loan of $2,500.” This was recognized as the consideration of the note by counsel of petitioners, in their brief, in these words: “The loan of $2,500 made by J. A. Reeves to Max Layne, in February, 1895, was in consideration of Max Layne releasing him from a partnership contract.” Thus, it appears that upon a dissolution of this firm, and as a condition for its dissolution, Max Layne executed and received this loan. As there was no pretense *56that this note was a gratuity, or that it was otherwise than what it seemed to be, viz., a valid obligation upon the part of Max Layne and his sureties to pay the sum of $2,500 to J. A. Reeves, twelve months from its date, the writer of the opinion adopted the form of statement called in question as correctly indicating the relation of the respective parties to one another and to that obligation. The purpose was to show that this first in a series of notes leading up to the present controversy, evidenced a real debt due by Max Layne to J. A. Reeves, in which the other parties were sureties for their principal, and the statement of the manner in which the debt came about was rather by way of inducement, and was in no way essential to the main fact.
And it is true, as is insisted, that there was no moral or legal obligation resting on petitioners to renew this original note when it matured, but there was an obligation upon them to pay it, if their principal did not, and thus 'relieve the payee and indorser, J. A. Reeves, and the record, we think, leaves no room for doubt that it was to relieve them indirectly, and Max Layne directly, from the immediate discharge of this duty, and to enable the latter to get still further indulgence, that the dealing with the bank was resorted to, resulting in the execution of the new note of March 16, 1896.
It may be true, as stated, that the plan of getting the money from the bank was discussed, and, *57perhaps, agreed upon, by Max Layne and J. A. Reeves, before it was mentioned to the other parties, but the fact remains that the loan thus contemplated was to be made for the purpose of lifting the strain of immediate payment of a binding obligation of Max Layne, J. B. Layne, and W. D. Reeves, held by J. A. Reeves, which was rapidly maturing, and .while the arrangement resulted in placing $2,500 of that note in the pocket of the' holder of the debt, it gave further indulgence to the makers, who, but for this arrangement, would have been obliged to take it up at maturity.
What motive J. A. Reeves could have in agreeing to an arrangement out of which he received simply the principal, lacking the interest, of his note, and assumed the position of guarantor and indorser upon it, save that of a friendly disposition to these parties, we cannot conceive, as the record does not disclose. It does appear, however, that all these makers, at the time the note of February, 1895, fell due, were solvent, and this fact furnishes an explanation of J. A. Reeves’ willingness to make the indorsement he did when he turned it over to the bank, and goes far to repel any inference, that, while thus securing indulgence to them, he intended, or that any of these parties expected him, to change his relation to the debt or the parties to it, on the execution of the renewal note. Why should he do so ? Max Layne, J. B. Layne, and W. D. Reeves were absolutely bound to him • before the transfer of the original *58note, and they stood between him and payment after its transfer. Their only alternatives at its maturity were to pay or renew, and Max Layne, the principal, for his own relief directly and that of his sureties indirectly, preferred the latter alternative— a renewal.
Now, under these circumstances, we can think of no motive to induce J. A. Reeves, intelligently and of design, to make the radical change in his relations to this continuing debt and these parties, as it is insisted he did, nor of any right on their part either to expect or demand such a change. It is against common experience and the ordinary and reasonable course of business transactions that this should have been done, and, therefore, his co-defendants, who insist that he did so, must be prepared to show the fact, and to this we do not think they make an approach, save in the single fact that he put his name on the face, rather than on its back. The force of this fact, however, is greatly weakened, if not entirely destroyed, when the record as a whole is examined. This was the view entertained by us, and the one we undertook to express in our original opinion. The case, by reason of the earnestness and ability of the several counsel engaged, as well as of its peculiar facts developing a singular controversy, was the subject of careful examination, followed by a most extensive consultation, before any conclusion was reached. Since the petition for rehearing was filed, fearing lest injustice might have *59been done petitioners, the record has been re-examined, with a desire to find if an error had crept into our decree, and, if so, with a purpose to correct it. The result is that we are satisfied upon this phase of the controversy, and, without going again over the facts, that the conclusion announced by us was the one most justified by the case when taken in all its facts.
But it is urged that, without regard to former equities, and without regard to whether J. A. Reeves was an indorser or a security, these parties had the right to say to the bank: ££ We sign this note on the condition that J. A. Reeves is to sign as a co-surety for Max Layne.” We agree that this is a sound proposition, and that if the record warranted it, and the bank had violated this condition thus imposed, it could not recover at all against these parties. But we do not think the testimony warrants it. It is true that J. B. Layne and W. D. Reeves now swear that they would not have signed' this except save on that condition, but did they impose it on the bank?
The only communication that W. D. Reeves had with the bank was by the letter of June 19, 1896, made an exhibit to Mr. Thomason’s deposition. In that letter he incloses the note in controversy, which he had received from Max Layne, and, having signed it, he forwarded it at his request. The following-clause in the letter is the only one bearing on this point, viz., 1 £ and said [that is, Max Layne] that *60you would procure the signatures of Mr. John Layne and A1 Reeves, in connection with mine, for him.” It will be observed that it is suggested that the note is forwarded to Mr. Thomason at the request of Max Layne, who desired that Mr. Thomason should act for him (Layne) in getting these ‘£ signatures. ’ ’ This falls far short of imposing the £ £ condition ’ ’ now urged, and especially a condition that J. A. (or Al) Reeves should be required to go on it as co-surety. It was his “signature”' that was required, and, although it was to be £ £ in connection” with the writer’s, yet this “connection” was as literally answered when it was placed on the back, as on the face of the note. As to J. B. Layne, he does swear positively, on direct examination, that Mr. Thomason told him that J. A. Reeves had agreed £ £ to sign ’ ’ this note, and again, that he refused to sign it when it was first presented to him, because J. A. Reeves had not £ £ signed it. ’ ’ On cross-examination, he confesses, however, that' he did not know whether any name was on this note when presented to him to sign, and then, in answer to. still another, question, says he “ thinks” he signed the note before J. A: ■ Reeves. Contrast this with the undisputed fact, that, when presented to him, the note had already been signed by Max Layne and W. D. Reeves, and with his swearing in his direct examination, that he refused to sigh it because J. A. Reeves’ name was not on it, and it will be seen how weak and unsatisfactory his testi*61mony is. Other contradictions are found in his depositions that it is unnecessary to point out. In addition, Mr. Thomason, on this point, distinctly contradicts him.
Without occupying more time, we are satisfied on this record, first, that the note sued on is the last of a series of notes, the first of which represented a debt to J. A. Reeves, for which these petitioners were bound; second, that the note executed to the bank on March 16, 1896, was, in effect, a renewal, and that without either the demand of Max Layne and these petitioners, or their knowledge, and inadvertently upon the part of J. A. Reeves, he placed his name on the face of this note; third, that this was done without any purpose to change his relation to the debt or the parties, and that this was so understood by the officers of • the bank; and, fourth, that the present note was' not signed by J. B. Layne and W. D. Reeves upon condition that J. A. Reeves should attach his name as a co-surety with them.
The result is, the petition is dismissed.