Adams v. Power

Simradl, C. J., delivered the opinion of the court. This case has been once before in this court, and will be found reported in 48 Miss., 451. On the case, as made in that record, it was held that the testimony tended to show a novation, by which the note of Power & Jones was made payable to Carter & Cook in extinguishment of Shannon’s indebted [831] ness to them ; the consideration which supported the promise •to pay Carter & Cook being the satisfaction of Shannon’s debt to them. In that view of the transaction it would follow that nothing •connected with the sale of Shannon’s interests in the Clarion •newspaper establishment, including the contemporaneous defeasance agreement with Shannon, could be set up in opposition to a recovery by Mrs. Adams, the indorsee of Carter & Cook. The ldnd of novation which the testimony strongly conduced to prove was what, in the civil law, is called “ delegation:” A new creditor is substituted, to wit, Carter & Cook. But, as ■stated in the opinion, two things must concur : 1st, the new creditor must be substituted with the debtor’s consent; 2d, a ■once existing debt to the new creditor must be extinguished, which extinguishment serves as the consideration for the new liability. It was because, .as the testimony was construed, Shannon’s •debt, to Carter & Cook was discharged by the note of Power & Jones, payable directly to them, instead of to Shannon, that the defenses set up by Power were held not to be admissible. On the second trial the facts were more fully developed, .and quite a different complexion was given to the case from what it presented on the first trial. Instead of there being testimony in the record now before ■us conducing.to prove a novation in the form of “ delegation ” between Shannon, Power & Jones, and Carter & Cook, the proof is clear that Shannon was not indebted to Carter & Cook, and there could, of course, be no such thing as a cancellation of that indebtedness by the substitution of Power & .Jones’ note to them for that purpose. At the time the note and accompanying agreement were made, ¡Shannon stated as the reason why he wanted it. in the names of Carter & Cook, as payees, that they were sureties for him, .and he - desired it as indemnity for them, representing that he ~was acting as their agent. [832] Shannon, in his deposition, states in substance that, very shortly after the note and defeasance agreement were made, he inclosed the note, copy of agreement, and a deed to a. parcel of land in Jasper county, to Carter, with instructions to use the note and deed in settlement of his indebtedness to' Mrs. Adams, for which Carter & Cook were his sureties. Carter, in his testimony, denies that he received the defea-sance agreement and the deed with the note. Pie admits, however, that Shannon instructed him, in the letter, to give the note to Mrs. Adams, in payment of the indebtedness to her. A few days after receipt of this letter, with its inclosure, Carter says that he met Shannon and informed him that Mrs. Adams was willing to take the note and the deed to the land for her debt. To this Shannon assented, and then advised him of the privilege to pay the note in subscriptions and advertisements. Carter and Cook both state that they parted with no consideration for the note. The testimony establishes these propositions: 1st. That Carter & Cook gave no consideration for the note. 2d.- The-note was delivered to them or to Carter, as indemnity, to be passed to Mrs. Adams on account of the debt she held against these parties. 3d. The note rests for its consideration on the bargain and sale of Shannon’s interest in the Clarion newspaper establishment to Power & Jones. 4th. Carter & Cook wore “ indicated ” as payees, to indemnify them, and for the purpose of using the paper to take up Shannon’s debt, for which they were sureties. 5th. Carter & Cook have no better right against the makers than Shannon could have had if he were the payee. The jury would have been well warranted in finding that, at the same time Carter received the note from Shannon, he also received a copy of the defeasance that imparted knowledge of the origin and consideration, and that Shannon had assumed to act as agent; that disclosed to Shannon’s sureties that he had taken the responsibility of an agency for them, both as respects the note and defeasance agreement, in order to pro [833] vide, in part, the means of relieving his sureties and himself from a debt. Although there was no' prior authorization, the acceptance of the note, on the terms and conditions stated by Shannon, was a ratification of Shannon’s act. The general rule of the common law is that an agent cannot bind his principal by a sealed instrument, unless he has been appointed by a writing under seal. But the rule seems in this country to have been so far relaxed as to allow a subsequent ratification, by acts of a contract under seal, if thfe law does not require such instruments to be sealed. Worrel v. Mann, 5 N. Y., 240; Lawrence v. Taylor, 5 Hill, 113; Randel v. Van Vetcham, 19 Johns., 60; Evans v. Wills, 22 Wend., 340; Story on Ag., §§ 154, 160-162. The defeasance contract would have been as effectual without seal as with it. The statute of frauds does not require such agreements to be in writing under seal. The acceptance of the note, and the appropriation of it with knowledge of the circumstances and agreement with which it was connected, was a ratification of the assumed agency of Shannon. But whether the defeasance be considered as the contract of Carter & Cook, as principals, by Shannon, as agent, or whether it be regarded as the personal contract of Shannon, the result is the same. The note and agreement grow out of the same transaction and rest upon the same consideration. Carter & Cook, paying no value for the note, became payees by the appointment of Shannon, and for the reason of which they were advised. They stand in no more favorable light, nor with better claim, than would Shannon if he -were payee. Mrs. Adams, the assignee of Carter & Cook, took the note, under the statute, subject to all the defenses and equities that might have been set up against them. It was held in this case, when formerly before us, that the special plea was good upon demurrer; that plea set up the defeasance contract, as made by Shannon, agent for Carter & Cook, and a non-performance of the covenants by Shannon, [834] averring a readiness and willingness by the defendant to perform, etc. .. , Whether this agreement was made by Shannon, as agent, and subsequently, ratified by his principals, or whether it was his personal contract, the result is the same, under the facts as presented on the last trial. It was not error to permit the counsel for the defendant to open and conclude the argument to the jury, as the defendant .held the affirmative of the issues submitted to it. .These views dispose of all the questions made by -the assignment of errors. Judgment is affirmed.