Davis Sewing Machine Co. v. Buckles

Mr. Justice Scholfield delivered the opinion of the Court: There is no ambiguity in the language of the release. It recites that “ whereas R. A. Nance, John Buckles, Daniel White and John D. Wagoner, of the county of Jersey and State of Illinois, on the 16th day of December, 1871, executed to The Davis Sewing Machine Company, of Watertown, N. Y., a certain bond, or writing obligatory, conditioned for the payment of all indebtedness which might be incurred by the said R. A. Nance as agent for said company for machines and other material sold to him by said company after that date, and whereas, upon an adjustment of the indebtedness of said B. A. Nance to the said company, there is found to be due from him to said company the sum of $2,484.87; and whereas, in full settlement of said indebtedness, the said B. A. Nance, John Buckles, Daniel White and John D. Wagoner have executed to the said company five promissory notes,” etc.; and, in consideration thereof it is said B. A. Nance, John Buckles, Daniel White and John D. Wagoner are “ wholly discharged from all liability upon said bond or writing obligatory.” Is the note in suit, then, indebtedness incurred by B. A. Nance for the payment of which Buckles, White and Wagoner were, at the date of the execution of the release, liable as the sureties of Nance, by virtue of the bond ? If the evidence showed that the amount of this note was included in the $2,484.87, which ivas found to be the sum Avith which these parties are chargeable upon the bond, there could be no question but that the release is a complete defense to the note; for if the parties in that settlement had expressly recognized the indebtedness for which the note was given as indebtedness covered by Nance’s bond, it would be very clear that it was intended it should be released, and it would be our duty to give effect to such intentions. But there is no such evidence in the record; and the reasonable implication from the evidence which is in the record is, that the amount of the note formed no part of the sum of $2,484.87. The note was not produced at that time, and there is no pretense that the amount of it was considered in the calculation then made. There is evidence that, at that time, it was said this note had been paid by Nance, but there is no evidence showing that charges were made or credits given in that settlement upon the supposition that this was true, that would not have been made or given - had it been said and understood that the note was not paid. In other words, it is not shown that in that settlement the amount of this note or the payments made upon it, or the offsets against it, were treated as any part of the subject matter of consideration; and in the absence of such proof, it would be idle to say it was intended by the parties that the note was within the terms of the release. We do not think, from the evidence, that the amount of this note could have been recovered in a suit by The Davis Sewing Machine Company on Nance’s bond. It does not appear that the bond was actually accepted by them until after all the indebtedness included in the note was incurred. They charged the indebtedness, not against Nance, but against Nance & Mallott. They settled with Nance & Mallott, surrendered their bond and accepted the note upon the assumption that it was their debt, and, subsequently, on discovering an error in the statement of the account made at the time of that settlement, they charged Nance & Mallott with an unsettled balance of $177 and accepted their note for the amount. Upon what principle, then, could the company, afterwards; have been allowed to say that this was the individual account of Nance? We think it too clear to admit of discussion, that they were concluded and estopped, by these facts, from saying that the indebtedness, in whole or in part, was the individual indebtedness of Nance and guaranteed by his bond. But, it is argued, Buckles was induced to guarantee the note by representations that it was for indebtedness for which he was already liable as one of Nance’s bondsmen. It is enough to say, in reply to this, these representations were made by Nance alone. The company’s account ivas against Manee & Mallott, and there is no evidence that any one, representing the company, made any representations inconsistent with this or in regard to his liability on the account in order to induce him to guaranty the note. A surety or guarantor can not interpose the fraudulent or false representations of his principal as a defense to the payment of a note or bond, without connecting the payee with such representations. Ladd et al. v. Board of Trustees, 80 Ill. 233; Smith v. Peoria County, 59 id. 413. Another point relied upon by appellee is, that he-was informed the note was paid when the release ivas executed. It is not pretended that this ivas the fact. Manee, it is true, had sent the company-money, which, he says, he designed should be applied on this note, but he admits that he gave no direction to that effect, and it was applied by the company on other notes which they held against him and Mallott. This they were authorized to do, there being nothing in the circumstances proven showing that their discretion in that regard was exercised unreasonably. Bonnell v. Wilder, 67 Ill. 327; Sprague, Warner & Co. v. Hazenwinkle, 53 id. 419; Hare v. Stegall, 60 id. 380. There is neither a plea of, nor sufficient evidence to prove, an estoppel in pais, by reason of the representation alleged to have been made in regard to the payment of the note, so that it is entirely unnecessary to consider the case in that light. We are clearly of opinion that the judgment below was unauthorized by the evidence, and it must, therefore, be reversed and the cause be remanded. Judgment reversed.