Nashville Saddlery Co. v. Green

Holden, J., delivered the opinion of the court On April 28, 1915, the appellees,' Green, Garrett, Garrett, Hood, Prestidge, and McGowan, citizens of Sunflower, county, were engaged in business as partners under the name of the Planters’ Mercantile Company, and on that date executed their promissory note for five hundred and fifty-three dollars and seventy-eight cents, due to appellant November 1, 1915; said note being signed “Planters’ Mercantile Company, per L. M. Garrett,” and also signed by each of the partners of the partnei’ship. We here set out the note: “553.78. Drew, Mississippi, April 28, 1915. “On November 1, 1915, after date, we promise to pay to the order of Nashville Saddlery Company five hundred and fifty-three and 78/100 ($553.78) dollars, payable at Drew, Mississippi, for value received, with interest from [104] maturity at eight per cent until paid. If this note is not paid at maturity and is put in the hands of an attorney for collection, we agree to pay all costs of collection, including an attorney’s fee of ten per cent. The undersigned principal and indorsers of this note, which is filled up before signing, waive, demand, notice, and protest thereof, and. we agree that if this note is placed in the hands of an at* torney at law for collection, or has to be sued on, that we shall pay ten per cent attorney’s fees in addition to the principal and interest which fees shall be added to and become a part of the judgment. We also sign with a full understanding of this notice. No. 1493. Planters’ Mercantile Company, per L. M. Garrett. O. J. Hood, L. M. Garrett, Dr. B. J. Green, 0. A. McGowan, J. H. Prestige, A. Garrett.” Thereafter, in January, 1916, an involuntary petition in bankruptcy was filed against the Planter’s Mercantile Company, and in April an offer of composition was made by the Planters’ Mercantile Company and the partners composing that company, which offer of composition was accepted by the majority of creditors in number and amount; was voted for by the appellant creditor; and the composition was confirmed by the court, and the Planters’ Mercantile Company and the partners composing the partnership were discharged upon payment of the amount named in the composition, and. this amount was paid by the appel-lees and accepted by the appellant and other creditors in full satisfaction of' all indebtedness due by the partnership and the partners composing it. Thereafter the appellant, Nashville Saddlery Company, filed this suit against the partners composing the partnership, suing them as individuals, for the balance due of two hundred and twenty dollars after crediting said note with the payment thereon under the composition. The defendants below filed several pleas, among which was the plea of discharge in bankruptcy under the composition settlement. The trial resulted in a judgment in favor of the defendants 'below, from which this appeal comes here. [105] The appellant seeks reversal, as we understand it, upon the theory that the partners were not adjudged bankrupt so as to relieve them from their liability as indorsers on the note. In other words, that the composition discharge did not relieve the partners as individuals because they did not file a list of their individual property; and that, if mistaken in this, then the partners are indorsers and individual sureties on the note, and as such individual sureties were not discharged when the principals were discharged of the debt by the bankrupt court. After a careful investigation and consideration of the contention of the appellant we are convinced that the position is unsound for several reasons, but we shall rest the decision upon one ground only, and that is, that the partners who signed their names to the note which had been signed by the Planters’ Mercantile Company as a partnership, are not sureties on the note, but are mere comakers or principals. They were liable individually for the debts of the partnership, therefore they were liable individually and primarily for the payment of this note signed by the partnership, the Planters’ Mercantile Company, and the fact that they signed their individual names separately on the note did not make them sureties for that which they were already primarily liable as partners and as individuals. The signing or indorsing of the note by them separately as partners or as individuals did not add anything to the security of the payment of the note; consequently it is an unsecured note, and Avas thus proved in the bankruptcy court. That a person may be a surety on his own note is not conceivable. A surety is a person who binds himself for the payment of a sum of money, or for the performance of something else, for another. Certainly these partners, who were already bound as partners and as individuals to pay this note, could not at the same time become self-sure-ities for the payment. This being true, the appellees cannot now be sued as sureties, and since they were discharged [106] as partners at the same time that the partnership was discharged by the composition adjudication- in the federal court, the note is valueless, because it has been settled in full. ■ The proposition presented by counsel for the appellant that the partners could not be adjudged bankrupts so as to relieve them from liability as indorsers because they did not file a schedule of their individual property is untenable, because the appellant was present in the bankrupt court, made no objection to, but consented and accepted, the adjudication, and cannot now in a state court attack the validity of the discharge of the debt in the bankruptcy court. But more than this, the composition order fully discharges the debt as to all of the partners as well as the partnership, and since the partners who signed the note were not sureites, but were principles, the composition settlement and discharge satisfies the note in full, and releases the partners from any further liability. Whether or not the bankruptcy court treated the partnership as an “entity” can make no difference in this case, because the partnership and the partners composing the partnership were released by the composition discharge, and, there being no individual liability as sureties, because the partners were not sureties on the note, no further liability exists against the members composing the partnership. Francis v. McNeal, 228 U. S. 695, 33 Sup. Ct. 701, 57 L. Ed. 1029, L. R. A. 1915F, 706; Abbott v. Anderson, 265 Ill. 285, 106 N. E. 782, L. R. A. 1915F, 668, Ann. Cas. 1916A, 741. The judgment of the lower court is affirmed. Affirmed.