H. B. Owen Tie Co. v. Bank of Woodland

Ethridge, J., delivered the opinion of the court. . The Bank of Woodland sued J. S. Simpson and the H. B. Owen Tie Company on a contract originally made between the bank of Woodland and Simpson by which the bank furnished Simpson with money to purchase and get out cross-ties, taking Simpson’s notes therefor, with an agreement to sell ties as collateral. These notes became due in the sum of eighteen thousand dollars before D'ecember 18, 1920, about which time the bank wrote Simpson, which letter is not made a part of the record and its contents not fully disclosed, but which is referred to in a letter written b3r the H. B. Owen Tie Company'to the bank on December 18,1920, which letter reads as follows: “Algoma, Mississippi, Dec. 18, 1920. “Mr. P. B. Hays, Cashier, Woodland, Miss.' — Dear Sir: Mr. J. S. Simpson has just handed me a letter from you regarding amount due your bank of eighteen thousand dollars in which 3rou desire a statement from us that we will take up and pay you for his ties by Jan. 1st. We are so rushed up with work now that we are not sure that we can get all his'ties taken up by January 1st, but we will agree to pay >rou for all ties taken up by January 1st, and if we do not get that miuch taken up by that time will take them after January 1st, and pay you until this amount is p^id. Or if it would suit we might take an inventory of his ties on, January 1st, or soon thereafter and give our note to cover the amount of the ties. “Very truly, “H. B. Owen Tie Co. “By H. B. Owen.” [121] This suit so far as the liability against the H. B. Owen Tie Company is concerned is predicated upon this letter. On the same day J. S. Simpson gave to the H. B. Owen Tie Company authority to pay the Bank of Woodland eighteen thousand dollars out of his invoices or tie shipments made by him. There was no letter showing an acceptance by the bank of this letter of the Hi. B-. Owen Tie Company as an agreement to release Simpson from an indebtedness on the contract. Neither was there anything to show a promise or agreement by the bank to forbear to proceed against Simpson for its money or any release by the bank for its claim) against the ties or against Simpson. This suit was defended upon the idea that the appellant tie company was not bound by this letter because there was no consideration for it and no agreement to forbear or to extend the time for Simpson to perform his contract, and there is nothing in the record to show any agreement by the bank which would have bound it to extend the time for the collection of Simpson’s debt or to release any of its claim against Simpson. In other words, the bank could at any time it saw proper have proceeded against Simpson and to seize and sell the ties upon which it had a showing. The Owen Tie Company, as a matter of fact, did not take up the ties which Simpson had at the time, and many of the ties which he then had on the right of way of the railroad for delivery to the tie company decayed and became worthless. It does appear in the record that Simpson had procured some cars to be loaded with the ties subsequent to January 1, 1921, but the tie company did not or could not furnish inspectors to inspect the ties and the cars were released by order of the tie company. The court below held that the letter constituted a coutract and that there was sufficient consideration to support it, and there was a verdict in favor of the plaintiff and judgment thereon against the tie company, from which it appeals here. [122] It will be noted from the statement of the case that the letter of appellant to the bank was written after the execution of the notes of Simpson and after they had become due and payable, and we think the facts bring this case within the rule announced by this court in Clopton v. Hall, 51 Miss. 482, which held that the signing of the note after its delivery and after the execution contract is independent of the original contract and disconnected from its consideration, and the liability incurred for payment must depend upon some other inducement or consideration valuable in law, and that the burden of proof as to the consideration of a contract rests upon the plaintiff where it is not implied by law, and that the subsequent signing of the letter after the contract was executed between Simpson and the bank constitutes a separate agreement and does not in itself import a consideration, and that the consideration would have to be shown to make the letter a valid obligation. In order for the letter to have had the effect of making a contract there must have been an acceptance of its terms, and an agreement to forbear proceeding against Simpson for a definite period which would be binding upon the bank, or there must have been a release of liability against Simpson. This the record wholly fails to show. But the bank held to its obligations against Simpson, and Simpson was sued in this case as a codefendant. In J. H. Queal & Co. v. Peterson, 138 Iowa, 514, 116 N. W. 593, 19 L. R. A. (N. S.) 842, the Iowa court dealt wiht a similar case, and the following rule is announced in the syllabus in that case: £iAn agreement in writing by one-to take up a past-due note of another if it remains unpaid at a certain future fiate, without additional consideration to support it, is without consideration, and unenforceable, where the promisor makes no request for forbearance of suit against the maker of the note, and the promisee does not agree to forbear suit; and the mere fact that he does so forbear [123] is not sufficient to establish' either such promise or request. ’ ’ Various authorities on the question before us are collected in the note to the L. R. A. report of this case. We think there was want of consideration and that the ■letter was not definite and certain, as it contained at least two different propositions, neither of which is shown to have been accepted. The judgment of the court below will therefore be reversed and the cause dismissed as to the appellant, IT. B. Owen Tie Company. Reversed and dismissed.