Ivy v. Evans ( 1923 )

Ethridge, J.,

delivered the opinion of the court.

The appellant was plaintiff in the court below and brought suit against appellees Isham Evans and Mrs. Lillian N. Evans, the latter being engaged in the mercantile business under the name and style of E. F. Nunn & Co., alleging that on the 28th day of February, 1921, the defendants executed their promissory note to H. H. Young, thereby promising to pay fourteen thousand, two hundred and ninety-two dollars and nineteen cents, with six per cent, interest per annum from date; that said Young had departed this life, and plaintiff was appointed administrator of said estate; that, although the note was past due and unpaid and payment had been demanded, the defendants had failed and refused to' pay the same; and demanded judgment for said sum and interest, together with two thousand dollars attorneys’ fees. Said note reads as follows:

“$14,292.19. West Point, Miss., 2/28/1921.

“One year after date for value received we promise to pay to H. H. Young or order at First National Bank of West Point, Mississippi, fourteen thousand two hundred ninety-two and nineteen one hundredths dollars in current funds with six per cent, per annum from date till paid. The securities mentioned on the reverse hereof are hereby pledged and delivered to secure payment of this note. Should said securities decline in value, the maker of this note hereby agrees, within twenty-four hours from demand to that effect by the holder, to pledge additional securities satisfactory to the holder to cover such decline. Failure or refusal to comply with this demand shall at once mature this note and pledge. On maturity of this note, either by its terms or on account of the failure to make good any decline in value of the pledged securities, the holder is hereby authorized to sell said securities at public or private sale, without recourse to judicial proceedings, and to make any transfers of stock or other property that may be required to effect such sale, and to apply the proceeds thereof to the payment of this note and of any costs and attorney’s fees that may be incurred, and the remainder, if any, to the payment of any other indebtedness, whether matured or not matured, owned by the maker hereof to this bank. The holder of this note shall have the right to purchase the pledged securities at tlmir market value, or at any judicial or auction sale thereof, or when sold on the stock exchange.

“[Signed] E. F. Nunn & Co.,

“By Mrs. Isham Evans,

“Isham Eva^s.”

The defendants plead the general issue, a plea of tender, and a special piea in abatement of the suit. The special plea in abatement set up in abatement of the suit that H. H.' Young in his lifetime on the 21st day of February, 1916, made a contract with the defendants in which he agreed in writing that, if the defendants' would borrow money from Mm thereafter, as the indebtedness so incurred should become due, the defendants at their option should have the right to divide the said amount so becoming due into five equal installments, to be expressed by their promissory notes payable to him, each bearing interest at the rate of six per cent, per annum, payable annually. Under the said written contract said Youn»- further agreed that, upon the exercise of the option so granted, the several amounts with interest accruing thereon to the maturity of each shall constitute several sums, each of which as they mature shall, at- the option of the defendants, be divided into five equal installments as agreed upon in the said written instrument, a copy of which is attached to the said plea marked Exhibit A; and that the said defendants had executed and tendered such notes to the administrator prior to the bringing of the suit and on or before the maturity of the. note sued upon. The plea of tender pleads the tender of such note set forth in this plea under the alleged agreement of February 21, 1916, which said agreement reads as follows :

“West Point, Miss., Feb. 21, 1916.

“E. F. Nunn & Co., and Isham Evans, West Point, Miss.: In answer to your request that I commit myself with reference to the maturities and .payments of the money now due by you to me, and further with reference •to' any other amounts that may hereafter become due. I beg to say that I hereby agree that, as to each and every amount for which you are now indebted to me, or for which you may hereafter become indebted to me, in the way of loans or advances, which at my option, upon your request, I may at any time in the future malee, and for which there shall be no limitations of time, you will be granted an extension of five years, of said several amounts, such as may now be due or hereafter to become due, da.ting from maturity of each; that is to say, as each amount shall become due, at your option, the same shall be divided into five equal installments, expressed by your promissory notes payable to me or order, maturing one year each thereafter until all are paid, each bearing interest at the rate of six per centum per annum, payable annually. I further agree that if, before the exercise of your option for the five-year period of extension herein mentioned, there should be, by mutual agreement, any annual renewal or renewals of any such indebtedness, then such period of extension, as to such annual renewals, shall date from maturity of such renewals. I further agree that upon the exercise of the option herein granted that the said several amounts, with interests accruing thereon up to the maturity of each, shall constitute several principal sums of money, each of which, as they mature, shall, at your option, be divided into five equal installments, as herein above agreed. Believing this will meet your request, the stipulations set forth shall become binding upon my heirs personal representatives, and assigns, upon the delivery to you of this letter, unless you shall at once signify your will to the contrary.

“Yours truly, [Signed] H. II. Young.

“Accepted: [Signed] E. E. Nunn & .Co.

“Accepted: [Signed] Isham Evans.

“Witness: [Signed] O. N. MancilL.

“L. W. Yeates.”

The notes made exhibits to these pleas were signed E. F. Nunn & Co., by Mrs. Lillian N. Evans, Mrs. Lillian N. Evans, and Isham Evans.

To this special plea the plaintiff replied, not denying the tender of the five renewal notes set out as exhibits to the said plea in abatement, but nevertheless saying that said- suit ought not to abate, for the plaintiff denies that the instrument dated February 21, 1916, ever was or is a contract, and that Same is null and void and' has never-been legal, valid, or binding, and denies that the note sued on was executed pursuant to or in accordance with the said instrument; denies that Young ever desired to lend defendants money but avers that the defendants were anxious to borrow money of said Young, and during the year 1914 did borrow large sums of money payable in one year, and that just before the last note became due said defendant Isham Evans, suffered large financial losses and defendant Mrs. Lillian N. Evans suffered large financial losses, and requested said Young to give them said instrument, and said Young, without any consideration of any kind to him moving, but because of the influence which said Evans had over him as his business adviser, and purely as an accommodation, signed the said instrument, not knowing of the financial losses suffered by the defendants, said instrument being a great benefit to the defendants and a great detriment to the said Young; that said instrument, dated February 21, 1916, was and is void for the following reasons: First, because made without consideration; second, it lacks mutuality; third, because said instrument is nothing but an offer on the part of said l7oung, without consideration, and not under seal, revocable at any time, and that same was revoked by his death, and also by the administrator after his death; fourth, that same was never accepted by the said defendants; fifth, that the plaintiff says the said note sued on in this suit is a renewal of part of the indebtedness incurred in the year 1914 and prior to the execution of the instrument of February 21, 1916.

The proof in the case shows that after the execution of said instrument of February 21, 1916, the defendant Isham Evans became bankrupt and went into bankruptcy; that prior to said act of going into bankruptcy he was reputed to be an excellent business man of great wealth; he Avas president of one of the banks at West Point, also president of a cotton oil company; that he became largely indebted to the bank of which he was president, Avhich fact was not known outside of the bank; that the money which was borrowed from Young was borroAved principally for the purpose of paying off the debt to the bank Avhich, on account of the passage of the bank guaranty law in 1914, prohibited the bank from carrying such debt. This fact, however, is not shown to have been known to Young. The proof also shows that the cotton oil company of which Evans was president suffered great losses and became insolvent. The evidence further shows that the note was renewed from time to time between the time of the first loan in 1914 and the time of the execution of the note sued upon in 1921. The record shows that in 1916 the firm of E. F. Nunn & Co. Avas composed of Mrs. E. F. Nunn and Mrs. Lillian N. Evans, and that between the execution of the instrument of February 21, 1916, and the note sued upon Mrs. Nunn died, and that E. F. Nunn & Co. at the time of the execution of the note of 1921 sued upon Avas composed solely of Mrs. Lillian N. Evans, Avho Avas the daughter and the only heir of Mrs. E. F. Nunn. This evidence on objection Avas stricken out, but the special plea in bar does not allege, as’it should allege, that E. F. Nunn & Co. were the same persons in 1921 that it Avas on the execution of the instrument of February 21, 1916. The replication to the plea in bar denies that the note in 1921 was taken under the agreement of 1916, and there is no proof in the record to show that the partnership of E. F. Nunn & Co', in 1921 was the same as in 1916 Avhen said instrument Avas executed. It affirmatively appears from the record that, after the execution of the instrument of 1916, Mrs. E. F. Nunn died, and that the defendant Isham Evans became insolvent.

The agreement of February 21, 1916, imposed no legal obligation upon either Mrs. E. F. Nunn or Mrs. Lillian N. Evans or Isham Evans, and no obligation whatever-rested upon them or bound their property or assets. Neither does the instrument bind or purport to bind their executors or administrators. Consequently the estate of Mrs. E. F. Nunn is in no wise bound by said instrument and she was not obligated in any respect to do anything, but had a mere option which her death revoked. The instrument tendered with the plea in bar — that is to say, the five notes — does not and cannot bind the estate or property of Mrs. E. F. Nunn. The parties signing that note are not the same parties which Exhibit A to the plea contemplates should sign the note. It may have been that Mrs. E. F. Nunn’s signature to the note or the contract was the leading or moving consideration of Young in executing this instrument. The evidence shows she was a person of large property, but it is impossible to* bind hel- or her property after her death, and consequently the signature of E. F. Nunn & Co-, now is not the same as the signature of the E. F. Nunn & Co. who accepted the instrument, Exhibit A. . This being true, the plea in bar was bad, and the judgment of the court below cannot be upheld based upon that plea and proof hereunder. In view of this fact, it is unnecessary to decide what effect the instrument would have were Mrs. E. F. Nunn now living and had joined in. the execution of the notes, nor is it necessary to decide what effect the bankruptcy and insolvency of Isham Evans after the execution of the instrument of February 21, 1916, has on the instrument relied upon in bar of the suit.

It follows from what we have said that the judgment of the court below must be reversed, and the cause remanded, for further proceedings in accordance with this opinion.

Reversed and remanded.