Wallace & Co. v. Hudson

Walker, J. On the 28th day of October, 1870, W. P. Williams, the husband of Elvira A. Williams, being indebted to the appellants, Wallace & Co., on an open account amount- . ing to near eight thousand dollars, gave his note and mortgage for the amount of the account, due the first of January, 1871. Mrs. Williams joined her husband in the mortgage, and it was given over one thousand five hundred and thirty-six acres of land in Hopkins county, which Mrs. W. owned in her own right. This arrangement was entered into on the part of Wallace & Co. by their agent, Bobert Maxwell. The Williamses afterwards gave a mortgage to Thomas J. Hudson, and this suit was commenced by him to foreclose his mortgage, making the appellants parties. It appears that a few days before the execution of the note and mortgage to the appellants, they had commenced a suit on their account against Williams, in Hew Orleans; attaching [472] certain rights and credits belonging to Williams, and garnisheeing persons supposed to be indebted to him. On receiving information of the arrangement made through their agent, Maxwell, with the Williamses, they refused to dismiss their proceedings in the Louisiana Court, and thus repudiated the act of their agent. They pressed their attachment suit, until Williams had paid them the sum of two thousand five hundred dollars, on their debt, and also had paid to Colonel Grill, their lawyer, the sum of one hundred and twenty-five dollars as a part of his fee for prosecuting the suit. The attachment suit was never dismissed until a few days before the maturity of the note, and then only on condition of the payment of the money, as before stated. The evidence leaves it very doubtful whether Maxwell had any power to bind Wallace & Co. by an extension of time to Williams or not. At all events, the appellants refused to be bound by the arrangement, and yet they are now claiming to set up their lien on the mortgaged premises as prior to that of Hudson. Some very nice questions arise in this case. If Mrs. Williams is to be treated merely as a security on the note and mortgage, for her husband, it is doubtful whether she could be heard to complain, as the acts of Wallace & Co., in pressing their attachment suit, did not increase her risk or enlarge her liability, but diminished both, by the payment of the two thousand five hundred dollars collected in Hew Orleans through the attachment suit; and it appears from the evidence that this attachment suit was pressed to its ultimate result, as far as money could be made by it. But, looking at all the facts in this case, we think the law makes Mrs. Williams a guarantor of a previously existing •debt of her husband, and to support such a guaranty a consideration is required. There was a consideration stipulated for, to wit: an extension of time to her husband, within which to pay his debt; but this consideration failed by the act of the appellants. They refused to be bound by the acts of [473] their agent, Maxwell, and whether the law would have held them hound, or not, we think is quite immaterial in this case. Williams did not choose to test this question. He appears to have been In the power of the appellants, and they used their power; whether wisely or not, remains to be seen. It was a wise and a true saying, “ The borrower is slave to the lender.” We do not think the law will hold Mrs. Williams bound, or enforce the mortgage over her property, in fa/vor of the appellants in this case. The charge of the court is ably criticised by appellants’ counsel. There may be some0 inaccuracies in it, but we do not think the appellants have any reason to complain of it. The brief filed by the appellants in this case ably supports an opposite view to that which we have taken. Many authorities are referred to, but upon careful examination it will be found that none of these authorities will apply to a state pf facts such as are presented in this case, and yet hold that the guarantor would be bound. The case of Terrill v. Smith, 8 Conn., 429, is an ably considered case. There the court say: “ Hothing short of an actual payment, or some act or neglect “ of the creditor, will discharge the liability; the terms of the “ guaranty are that the note shall be paid.” Here there is an act on the part of the creditor—an act which takes away the consideration for the undertaking ; which robs the contract of .its very essence ; and in such case we think the learned court which decided Terrill v. Smith would hold, with us, that the liability is discharged. For the reasons herein given, the judgment of the District Court is affirmed. Affirmed.