Howard v. Jones, 40 N.C. 75, 5 Ired. Eq. 75 (1847)

Dec. 1847 · Supreme Court of North Carolina

40 N.C. 75, 5 Ired. Eq. 75

JAMES W. HOWARD, EX’R, &c. vs. EDWARD S. JONES & AL.

A bill, which is brought, simply to recover from the defendants a sum of money, paid for them on their account, cannot be sustained ; this being a claim on which a Court of common law is competent to give relief.

Where the plaintiff in his bill claims against two defendants to recover as surety for both, alleging they are both principals, he cannot have a decree against one of them, as a joint surety.

Cause removed from the Court of Equity of Jones County, at the Fall Term, 1847.

The bill states,' that, in the year 1839, the defendants, who were merchants residing in the State of Alabama, applied to the testator, Joseph Whitty, to aid them in obtaining a loan of money from the Bank of Newbern, for the use of the firm ; to which he agreed, and a note for $5,000 was drawn and discounted, at the said Bank, for the sole use and benefit of the defendants. In said note, the testator was made the principal and the said Jones and Ferrand signed as sureties, and this form was adopted, as the Bank refused to loan the money, unless they procured some responsible person, resident within the State, and subject to their control, and who would regularly attend to the renewal of the note. The plaintiff avers, that although his testator was, upon the face of the note, the principal, yet in fact and in truth, Jones and Ferrand were the principals and that he was their surety. That the note bore date the 13th of May, 1839, was duly discounted, and the proceeds drawn by G. W. Ferrand and applied to the use of the firm. The bill further charges, that Joseph Whitty renewed the note as principal, from timé to time, as it fell due, up to the time of his death in 1843, and that he paid out of his own funds the necessary instalments, which in the whole amounted to the sum of $1,258 40, to-wit, one payment on the 18th December, 1839, of $745 09; on the 20tli April, 1841, of $477 52 ; and on the 6th of August, 1842, $30 43, and that no part of these sums was repaid to the testator, Joseph Whitty ; but that G. W. Ferrand is entirely insolvent, and Edward S. Jones alleges, that the note was discounted for the sole benefit of Ferrand, and that he was a co-surety on it, with Joseph Whitty; which is denied. The bill prays an account, and that the defendants may be decreed to repay to the plaintiff the money so advanced by his testator for their use and benefit. The answer of Ferrand states, that some time in 1838 or ’39, being in the State of North Carolina, and in need of money, he applied to Joseph Whitty, to aid him in procuring a loan from the Newbern Bank, to which he agreed; a note was drawn for the sum of $5,000, in which Whitty was the principal, because the defendant, Ferrand, did not reside within the State. The note was discounted for his sole use and benefit, and the proceeds drawn by him, That at that time, E. S. Jones, the other defendant, was not in the State, but executed it after-wards, and as a co-surety with Joseph Whitty, for him. It further states, when the note was drawn and discounted, he and Jones were not engaged in trade as co-partners; and not until 1841 did they enter into partnership.

E. S. Jones in his answer states, that an arrangement was made between Whitty and Ferrand to procure the discount of a note, while he was out of the State, but, upon his return, he did execute it, at the request of the deceased, Joseph Whitty, and as his surety, he being the principal therein; that it was discounted, but who drew the proceeds, or how they were applied, he does not know ; but he denies that the note was executed, or discounted for his benefit, or that of the firm of Ferrand and Jones, or that, any part of the proceeds were so applied. The firm of Ferrand and Jones was not formed, until near two years after the execution of the note, to-wit, in the year 1841. He denies that he was bound to furnish any portion of the funds for the renewal of said note, or that the testator so considered him; as the latter was his agent and attorney, from the time the note was discounted up to the time of his death, to sell his crops and receive the proceeds; and, during the whole time the note was in Bank, had, in his hands, funds of the defendant, which he might have applied, if he had considered him bound to pay the renewals, but that said Whitty, as he is informed, paid the money out of his own' resources. He admits that after the death of Whitty, he did renew the note, for the reason that Whitty’s executor had neglected to do so, and his co-defendant was in another State, and entirely insolvent, and it was more convenient to pay it in that way.

J. H. Bryan and J, W. Bryan, for the plaintiff.

Mordecai, for the defendants.

Nash, J.

The plaintiff has placed his claim to relief, upon the allegation, that the money was borrowed from the Bank of Newbern for the use of the firm of Jones v. Fer-rand, and to enable them to go into business in the State of Alabama, and that he was made a principal on the note, only because he was a resident of this State, and therefore within reach of the Bank, but that Jones v. Ferrand,, were in fact the principals, and he was their surety. The answers deny the allegation, and the proofs do not sustain it. The note in controversy, as charged in the bill, was executed on the 13th of May, 1839; and according to the testimony of Mr. Wapples, and Mr. Stockton, the firm of Jones v. Ferrand, was not formed until January 1841, near two years thereafter. It could not therefore have been made, and discounted for the use of the firm. But, if made for the use of Jones v. Ferrand, individually, and the testator was their joint surety, the plaintiff is entitled to the money paid by him in renewing the note. The testimony, upon which the plaintiff relies, is contained in the depositions of Mr. Perkins, a director of the Bank of Newbern, at the time the note was discounted, of Mr. Clark, the teller, and of Mr. McDaniel, and Mr. Simmons. The first named witness states it as his belief, that the note was discounted for the benefit of E. S. Jones and George W. Ferrand, and that such was the impression of the board. The others testify to conversations with Jones on the subject, at different times. Mr. Clark states, that before Whitty’s death, Jones told him it was his debt, and not Mr. Whitty’s and that the latter signed it as principal, at his request. In the same deposition, however, the witness states that the proceeds of the note were placed to the credit of G. W. Ferrand, who told him the money was to pay a claim against him in the Newbern Branch of the Bank of the State. McDaniel states, that Jones told him that the debt was his, and that he would attend to it, and that Whitty did not owe a cent of it, and Mr. Simmons’’ statement in substance is, that he heard Jones admit the debt was his.

Admit all that the three last witnesses state to be true, it only tends to show the debt to be E. S. Jones’, and that Whitty and Ferrand were co-sureties ; but it is not upon this ground, that the plainttff puts his case. Iiis allegation is, that Ferrand and Jones were the principals, and he was their surety. That Mr Perkins’ impressions were not correct, is proved; not only by the fact proved by Mr. Clark, the Teller, that the proceeds were placed to the credit of Ferrand, but the latter is sustained by the testimony of Mr. Sloane. He was also a director of the Newbern Bank, at the time the note was discounted. He tells us that, on the discount night, it was stated to the board of directors by Mr. Guión, the Cashier, that Mr. George W. Ferrand wished to borrow a sum of money, giving as his sureties Mr. Jones and’Mr. Whitty, and the Bank refused the loan unless Mr. Whitty, or some other responsible person residing in the State, would sign it as principal. Mr. Perkins’ testimony cannot therefore be considered sufficient to sustain the plaintiff on the ground, upon which he requests the interference of this Court.

We think the deposition of Mr Roberts, the Cashier of the Branch of the Bank of the State, exhibits this transaction in its true light. It appears from it, that George W. Ferrand. who was the step-son of the testator, Whitty, was largely indebted to that Bank, upon notes discounted in 1837, and that Joseph Whitty and E. S. Jones, one of these defendants, were his sureties. On the 14th of May, 1839, the day the note in question was discounted, Joseph Whitty paid off the notes due in the State Bank, and Mr. Clark, the witness of the plaintiff, states that Mr. Ferrand told him, at the time the note was discounted, that he wanted the money to pay off a debt he owed in the Newbern Branch of the Bank of the State. This discloses the object of the parties in procuring the loan from the Newbern Bank. Ferrand was largely indebted to the Bank of the State, and Whitty and Jones were his sureties, and .it is not very likely that Jones would be willing, in changing the debt from one Bank to the other, to change, at the same time, his relative position, and from a surety become a principal; but we are not called on to decide this question. Whether the testator and Jones Were the joint sureties of Ferrand, in the note discounted in the Newbern Bank, or whether, if so, upon an account taken, any thing would be due to the estate of the testator, are questions which do not arise here. This is not a bill for contribution, but simply to recover from the defendants a sum of money paid for them on their account, and at their request; a claim for which a Court of common law is competent to give relief. The plaintiff has not proved the allegations of his bill, and it must be dismissed with costs.

Ruffin, C. J.

It seems to be doubtful, upon the evidence, what the transaction between the parties really was. The bill states, that the note was made and discounted, to raise money for the use of a mercantile firm formed between the defendants, Ferrand and Jones, in Alabama. It is clear that it is not correct in the full extent; for that firm was not thought of, when the money was borrowed, and did not exist for nearly two years afterwards. Indeed, it is pretty certain that the loan was obtained for the benefit of Ferrand, and that the money was actually applied, the day after it was borrowed, to the discharge of a debt, which Ferrand owed to another Bank. Still, as between Jones and Whitty, the material question arises, whether one executed the note at the request of the other, and, if so, which was the primary, and which the supplemental, surety for Fer-rand. The proof is far from being satisfactory on the point. The declarations oí Jones, as stated by some of the witnesses, would be very strong for the plaintiff, if their effect was not weakened by some declarations of Whitty of an opposite bearing Besides, it would seem very singular, that Jones should incur such a responsibility to Whitty, in behalf of Ferrand, a step-son of Whitty, whom he had brought up fiom infancy, and to business as a merchant, and for whom he professed great affection. That improbability is strengthened by other facts. From the making of the note to Whitty’s death, he was the agent of Jones in this State and had large funds belonging to him in his hands. Yet when he made the payments, for the recovery of which the bill is filed, he did not charge them to Jones, but to Ferrand, while he did charge to Jones other sums which he paid on the note out of Jones’ funds, by the special written orders of Jones, in favor of Ferrand. Moreover, in his will, Whitty mentions certain negroes, which he got from Ferrand, and bequeaths them to Tiim, upon the payment of these debts for which he was liable for him, saying, that was all the claim he had to them. It is by no means certain, therefore, how the truth is upon this point; and if a declaration on it were necessary to the decision of the suit» it might be proper to direct an issue. It rather seems from other parts of the evidence, that, in point of fact, Whitty and Jones were co-sureties for Ferrand, who was, almost unquestionably, the principal. If there had been a charge in the bill to that effect, it would have brought the case within the cognizance of the Court of Equity, and made it necessary to weigh the proofs in that respect. But the bill states that as one of Jones’ pretences, and. expressly denies that to have been the fact; and, therefore, it cannot be entertained as one for contribution between co sureties. Then, in the other aspect of the case, and taking the facts most favorably for the plaintiff, namely, that he made the note at the express request of Ferrand and Jones, for the accommodation of one, or both of them, the plaintiff had a plain remedy at law for the money by him paid for the use of the person or persons thus requesting him It is, thus taken, the common case of money paid for another; for which indebitatus assumpsit lies, and not a bill in equity. Without any declaration of the facts therefore, and assuming them to be as alleged by the plaintiff, the bill cannot be sustained, but must be dismissed with costs.'

Per Curiam.

Bill dismissed with costs.