Van Hoose v. Southwestern Machinery Co. , 169 Mo. App. 54 ( 1913 )

FARRINGTON, J.

The appellants contend (1) that there is no theory under the pleadings and the evidence on which a judgment could be rendered iu favor of the plaintiff and against these defendants, and for that reason ask this court to direct the circuit court to enter a judgment in their‘favor, or render judgment in their favor in this court; (2) that this action cannot be maintained'because Yan Hoose was the agent of or trustee for Ben Aylor, Allen Hardy, Jr., William Fahrman, and George Hardy; that Fahrman and George Hardy, each being sureties on the note, could not do indirectly through Yan Hoose what they would not be permitted to do themselves, that is, to sue their principal and cosureties on the original obligation. The theory on which the trial court proceeded in this respect, as disclosed by the instructions was to say that when Fahrman and George Hardy each put up their one-fourth part of the $7500 note to the bank, or, in the name of Van Hoose, who paid it to the bank, as to them, what was paid by them amounting to one-half of the note was a payment to be credited on the note, and then allowed the plaintiff to proceed for the other one-half which had been put up by Aylor and Allen Hardy, Jr., who were not sureties. In other words, the trial court said that as to the one-half which was put up¡ by the two sureties, it was a payment, but that as to the amount which was put up by Aylor and Allen Hardy, Jr., it was an assignment made by the bank to Yan Hoose for their benefit, he becoming a trustee of an express trust for their benefit, and this we think is correct.

On the first, contention, appellants argue that because Yan Hoose, was the agent or trustee, or, to say the most, a friendly holder of said note, for Aylor, Allen Hardy, Jr., Fahrman and George Hardy, and held said note, making no attempt to collect the same until after these four men who had control of the machinery company had disposed of its assets and applied the proceeds to the payment of other debts of the company which they had become personally liable for, that that of itself was such an extension of this note as to relieve the sureties on the note; and many authorities are cited in appellant’s brief which uphold the doctrine that if there is an extension or an agreement entered into by which the creditor binds himself not to enforce the payment of the note according to the original agreement, the sureties are released.

Prom an examination of the testimony this court cannot say that Van Hoose, who was their agent, ever agreed or was bound by any agreement not to bring suit or enforce payment of this note; nor 'were the beneficiaries for whom he was trustee bound to refrain from bringing suit on this note. That there may be some testimony from which such an inference might be drawn we are not required to pass upon; but from all the testimony — and it is to that that we must look — we cannot say and find as a fact that there was such an agreement or anything done that'would release the sureties. Where there is any substantial conflict in the testimony in the trial court, the appellate court cannot enter a judgment or direct the trial court to enter a judgment different from the one rendered. [Security State Bank v. Peck, 159 Mo. App. 171, 140 S. W. 762; Johnson v. Fiala, 161 Mo. App. 359, 143 S. W. 537; Peek v. Stratton, 161 Mo. App. 457, 143 S. W. 501; Kraemer v. Ward, 149 Mo. App. 432, 130 S. W. 66.] Besides, the note under consideration contains the following provision “The makers, indorsers, and sureties agree to all extensions and partial payments before or after maturity without prejudice to the holder, indorsers, and sureties waive presentment for payment demand, protest and notice of protest' for non-payment of this note.” The trial court granted plaintiff’s motion for a new trial for the reason that the verdict was against the weight of the evidence. A motion for a new trial is to a great degree addressed to the sound judicial discretion of the trial judge, and an appellate court is reluctant to interfere with the exercise of' that discretion, especially when the case turns on the weight of evidence. [Johnson v. Grayson, 230 Mo. 380, 393, 394, 130 S. W. 673; Terpenning v. Nicholls, 140 Mo. App. 505, 120 S. W. 688; Digges & Garanflo v. Phillips, 158 Mo. App. 583, 138 S. W. 910; Hawver v. Springfield Traction Co., 154 Mo. App. 452, 134 S. AY. 70; Hopkins v. City of Springfield, 164 Mo. App. 682, 147 S. W. 1099.] The trial court should supervise the verdict of the jury, and grant a new trial if it is against the weight of the evidence, or is arbitrary and manifestly wrong, or appears, to be the result of passion, prejudice, or misconduct of the jury. [Gate City National Bank v. Boyer, 161 Mo. App. 143, 142 S. W. 487.] The ruling of this court must therefore be adverse to the appellants on this phase of the'case.

The second contention presents a rather unique question. However, on a careful consideration of the conditions that existed, we think the theory on which the trial court proceeded was correct.

It will be remembered that there was no mortgage or other collateral security put up by the machinery company to the bank as additional security to the note, and cases cited in appellants’ brief uphold the doctrine that when a surety pays the note or his part of the note, it is an extinguishment of the original debt, and his remedy is against his principal or a co-surety on an implied promise to pay, or for contribution, and not on the note itself; it is only when there is something put up by the principal to which the surety is entitled to be subrogated that equity will not treat the transaction as a payment but as an as- ■ signment in order to keep the original obligation alive for the benefit of the surety. [Harper v. Rosenberger, 56 Mo. App. 388; Bank of Warren County v. Kemble, 61 Mo. App. 215; Ferd Heim Brewing Co. v. Jordan, 110 Mo. App. 286, 290, 291, 85 S. W. 927.]

Analyzing this case as to Fahrman and George Hardy, we find them bringing suit through their agent, Yan Hoose, against the machinery company, their cosureties, as well as themselves, on the original obligation — a suit at law where there was no reason for subrogation or anything else so far as they are concerned to keep the original note alive; they are in no better or different position than had they had the note assigned, not to their agent, Yan Hoose, but to themselves, and had brought the suit in their own names as parties plaintiff against the other defendants', as well as themselves. .

When it developed in the course of the trial that two sureties had paid a part of this note, the court, under the authorities cited, must have held that as to them such sum advanced was a payment and not a purchase, and that they never became part owners of the note through Yan Hoose as trustee of an express trust, and that their cause of action on the original obligation must' fail. This is exactly what occurred, and was the effect of the dismissal as to them; and the direction in the instruction that such amount be treated as a payment and a credit on the note to that amount (which was one-half) was proper.

With these two parties out of the way, there yet remain Ben Aylor and Allen Hardy, Jr., who were strangers to the note, and who put up one-half of the amount due the bank.

Where a note is paid by a stranger, it will in general be held to be a purchase and not a payment; and whether it is one or the other is a question of fact, and in such transaction the intention of the parties governs. [Marquardt Savings Bank v. Freund, 80 Mo. App. 657; Crumlish’s Admr. v. Central Imp. Co., 23 L. R. A. 120.] In the case of Vanstandt v. Hobbs, 84 Mo. App. 628, the following language was used (1. c. 631, 632): “When a stranger to a note takes it up from the holder the transaction will be deemed a purchase and not a payment, nothing more appearing. [See, also, Swope v. Leffingwell, 72 Mo. 348; Campbell v; Allen, 38 Mo. App. 27.] When a stranger pays the amount due on a note and takes an indorsement and gets possession of the note, the presumption is that the transaction was a purchase and not a' discharge or payment. [Marshall v. Meyers, 96 Mo. App. 643, 647, 70 S. W. 927.]

As to Ben Áylor and Allen Hardy, Jr., there is no testimony tending to show that they advanced their one-half of the amount necessary to take up this note to the bank with an intention of discharging it, and in the absence of such testimony, under the rule announced in the foregoing cases,' it would be presumed a purchase by them. Moreover, as evidencing the intention to purchase, we find that the minutes of the bank authorize a “sale” of this note, and that in pursuance of such authority, the following indorsement was made on the note when the bank received the money:

“Jan. 16, 1908, for value received the Merchants & Miners Bank hereby sells, assigns, transfers and sets over the within note to J. H. Van Hoose, but without recourse on said bank and without impliedly 'or expressly warranting any of the matters contained in or which go to make up this instrument.

“Merchants & Miners Bank oe Webb City,

“Per C. M. Manner, Cashier.”

We can see no error in the theory adopted by the trial court in this connection in its holding as to Ben Aylor and Allen Plardy, Jr., that the note was sold subject to the credit of $500 paid long prior to the purchase, as well as the two credits of $1939.30 each, paid by Fahrman and George Hardy on the date of their purchase.

In answer to appellants’ fourth point it is sufficient to say that the dismissal of the cause of action as to Fahrman and George Hardy was no release as to them on the original obligation, plaintiff having a right to sue any one or more of the signers for the full amount due on the note.

After a careful examination of the record we see no reason for interfering’ with the action of the trial court in setting aside its judgment and granting a new trial. As the case will be retried, we suggest that the circuit court make a final disposition of all the defendants, who did not answer or otherwise plead to the petition. It. is ordered that the cause be remanded to the circuit court with directions to proceed in accordanee with the views herein expressed.

Sturgis, J., concurs. Robertson, J., not sitting.