Mulany v. Murray , 68 Mont. 245 ( 1923 )

HONORABLE W. L. FORD, District Judge,

sitting in place of MR. CHIEF JUSTICE CALLAWAY, disqualified, delivered the opinion of the court.

In this action the plaintiff sues upon a promissory note of which the following is a copy:

“$17,976.00. Dillon, Mont., Aug. 28th, 1914.

“On demand, for value received, I, we, or either of us promise to pay to the order of T. H. Mulany seventeen thousand nine hundred seventy-six and no/100 dollars, with interest thereon at the rate of twelve per cent, per annum from and after the date hereof. All parties, whether primarily or secondarily liable upon this note, severally waive the benefit of all exemption laws; and in ease the holder hereof -shall employ an attorney to collect any part of the same, we agree to pay in addition ten per cent, of the amount due for collection charges, and in case of suit a reasonable attorney’s fee.

“James P. Murray.

“Mary Adele Murray.

“C. E'. Gruwell.”

Indorsed: “Paid 9-25-15, on note, $12,976.00. Paid 9-25-15, on interest, $2,336.88.”

The complaint is in the usual form, and the defendant Mary Adele Murray is sued both in her individual capacity and as the executrix of the estate of James P. Murray, deceased, but at the trial the cause was dismissed as to the estate and the defendant Gruwell was. not served. The defendant Mary Adele Murray answered, admitting the execution of the note, alleging that the defendant James P. Murray, during his lifetime, paid said note, and pleading affirmatively want of consideration for her signature upon the promissory note, to which answer, reply was filed. The plaintiff had judgment for the balance due upon the note, and the defendant Mary Adele Murray appeals from the judgment and the order denying her motion for a new trial.

The evidence discloses that on August 28, 1909, James P. Murray and C. E. Gruwell made, executed and delivered to the plaintiff their promissory note for the sum of $15,000, with interest at twelve per cent per annum, which note was renewed in 1910 and 1911; the defendant Mary Adele Murray was not a party to either the note or the renewals. On August 18, 1914, the note sued on was given in renewal of said note of 1909, including the interest therein, which was signed by the defendant Mary Adele Murray, and in that connection she testified in part as follows: “When I signed this note dated August 28, 1914, I knew that it was to take the place of a note that existed that my husband and Mr. Gruwell were liable on to Mr. Mulany. At that time my husband was not in good health. He was not almost an invalid at that time. I signed this new note in order to relieve my husband’s mind and also so that Mr. Mulany might have a new note. I did that at my husband’s request. I knew also at that time the interest on this note for $15,000 had not been paid, and that therefore the amount for which I signed the new note, to-wit, $17,976, was due on the $15,000 note, that Mr. Murray and Mr. Gruwell owed to Mr. Mulany. This note for $17,976 was signed by Mr. Murray and Mr. Gruwell either before or after I signed it. I signed the note for $17,976 at the request of my husband.’’

As counsel for defendant (appellant herein) state in their brief, the only question submitted for our consideration is whether any consideration ever existed for the signature of the defendant Mary Adele Murray; and in that connection counsel contend that the defendant was a guarantor upon the debt of her husband and Gruwell, and that she could not be held liable for the reason that the original obligation was incurred five years previous, and no consideration distinct from the original obligation exists. On the other hand, counsel for the plaintiff (respondent herein) contend that she is an accommodation maker.

“A guaranty is a promise to answer for the debt, default, or miscarriage of another person.” (Sec. 8171, Rev. Codes 1921.)

“A guarantor of payment or performance is liable to the guarantee immediately upon the default of the principal, and without demand or notice.” (Id., sec. 8182.) “The undertaking is the guarantor’s own separate contract.” (Square Butte State Bank v. Ballard, 64 Mont. 554, 210 Pac. 889; Cole Mfg. Co. v. Morton, 24 Mont. 58, 60 Pac. 587; Daniel on Negotiable Instruments, 6th ed., sec. 1753.)

“An accommodation party is one who has signed the instrument as maker, drawer, acceptor, or indorser, without receiving value therefor, and for the purpose of lending his name to some other person. Such a person is liable on the instrument to a holder for value, notwithstanding such holder at the time of taking the instrument knew him to be only an accommodation party.” (Sec. 8436, Rev. Codes 1921.)

“The person ‘primarily’ liable on an instrument is the person who, by the terms of the instrument, is absolutely required to pay the same. All other parties are ‘secondarily7 liable.” (Id., see. 8403.)

From the above citations, as well as from the testimony of the defendant herself, the conclusion is irresistible that she is not a guarantor but an accommodation maker.

No consideration moving to the accommodating party is necessary to uphold accommodation paper (8 C. J., sec. 403, p. 255), and the fact that the defendant herein signed the note without receiving any part of the consideration, and for the purpose of lending her name to her husband, does not alter her situation. She is liable notwithstanding the plaintiff, at the time he took the note, knew her to be only an accommodation party. In other words, the fact that she is an accommodation maker gives rise to a duty on her part to the holder for value, no greater, no less, nor different than that imposed on the maker who received value. (Merchants’ Nat. Bank v. Smith, 59 Mont. 280, 292, 15 A. L. R. 430, 196 Pac. 523; Spear v. Ryan, 64 Mont. 145, 148, 208 Pac. 1069; In re Stinger’s Estate, 61 Mont. 173, 201 Pac. 693.) To uphold the note it is only necessary that one or more of the makers receive the consideration (Skagit State Bank v. Moody, 86 Wash. 286, L. R. A. 1916A, 1215, 150 Pac. 425); and the consideration for the note sued bn, so far as James P. Murray and Gruwell are concerned, is the preexisting indebtedness (Parchen v. Chessman, 49 Mont. 326, Ann. Cas. 1916A, 681, 142 Pac. 631, 146 Pac. 469; sec. 8432, Rev. Codes 1921), and so far as the record discloses, the plaintiff Mulany is a holder for value (Merchants’ Nat. Bank v. Smith, supra; Lowell v. Bickford, 201 Mass. 543, 88 N. E. 1).

Rehearing denied September 13, 1923.

The judgment and order appealed from are affirmed.

Affirmed.

Associate Justices Cooper, Holloway, Galen and Stark concur.