Branton v. O.B. Crittenden Co. , 145 Miss. 531 ( 1927 )

^* Corpus Juris-Cyc. References: Pleading, 31Cyc, p. 697, n. 96; Release, 34Cyc, p. 1083, n. 86. The appellee, O.B. Crittenden, doing business as O.B. Crittenden Co., filed suit against the appellant, J.E. Branton, on two notes, alleging that on January 1, 1921, the defendant, for good and valuable consideration with W.C. Branton, executed in the name of Branton Bros. two promissory notes in favor of O.B. Crittenden Co., of Greenville, or bearer, one note for seven thousand seventy-four dollars and eighty-five cents, due on January 1, 1921, and the other, for seven thousand seventy-four dollars and eighty cents, due January 1, 1922, both of said notes bearing interest from date until paid at the rate of eight per cent per annum and ten per cent. for attorney's fees in case they were placed in the hands of an attorney for collection. It is further urged that, although the said notes were past due and demand had been made frequently for the payment of same, said defendant has refused and still refuses to pay the amount due the plaintiff on said notes, the total amount of said notes, with interest from January 1, 1922, at eight per cent., except for credits paid at various times, being now due and payable, the plaintiff demands judgment for the sum of sixteen thousand dollars, with interest and all costs. The notes are made an exhibit to the declaration, each containing the following stipulation:

"For valuable consideration W.C. Branton is released and discharged from liability on this note. Dated November 6, 1925. O.B. Crittenden Co."

The defendant, J.E. Branton, filed a plea of the general issue denying he was indebted to plaintiff in the amount sued for, or for any sum whatever. The defendant also filed two special pleas. The first special plea alleged that during the year 1920, W.C. Branton and the defendant were operating as Branton Bros. and borrowed certain money from O.B. Crittenden Co. for the purpose of making a crop of cotton and corn on a plantation situated in Washington county, Miss., and that they executed a mortgage to the said Crittenden Co. securing the sum so borrowed and any other advances, whereby the said W.C. and J.E. Branton undertook to ship certain cotton to O.B. Crittenden Co., which company was to sell the same upon a commission basis; that, complying with the terms of the said trust deed, during the fall of 1920 and the early part of 1921, the defendant, J.E. Branton, and W.C. Branton delivered approximately one hundred and fifty bales of cotton to the said O.B. Crittenden Co. to apply on said debt; that on January 1, 1921, a part of the cotton was unsold and a settlement had not been made with the said O.B. Crittenden Co., and the debt, above mentioned, was renewed upon the execution of the notes sued upon herein; that upon delivery of said cotton to the said O.B. Crittenden Co., the defendant instructed the plaintiff to sell said cotton at once, but the plaintiff neglected and failed to sell the same, contrary to the instructions of the defendant, until the price of cotton had declined to the extent that said cotton did not have much value; that O.B. Crittenden Co. had never rendered any statement of account of said transactions to this defendant, and on account of the failure of O.B. Crittenden Co. to sell said cotton, the defendant had suffered a loss of several thousand dollars and by reason thereof the defendant is not indebted to the plaintiff in any sum whatsoever, and this he stands ready to verify.

To this special plea, the plaintiff moved the court to require the defendant to particularize his said plea so as to give specific information; that it did not show the price of cotton at the time the alleged instruction to sell was given by the defendant, nor did it show the price of cotton at the time it was sold by the plaintiff; that it did not show that the cotton had ever been sold, or that it was the duty of the plaintiff to sell said cotton. The court sustained the motion to make said plea No. 1 more specific.

The defendant filed also special plea No. 2, which is in the following language:

"Comes the defendant, J.E. Branton, by his attorney, and for special plea No. 2 to the declaration herein filed against him alleges that the plaintiff, in writing, a copy of which is hereto attached, marked Exhibit A, released W.C. Branton, the joint and several maker of the notes sued on, and that by reason of the release of W.C. Branton the notes have been discharged, and there is no liability upon this defendant, and this the defendant stands ready to verify."

The second special plea was demurred to and the demurrer sustained. The court thereupon entered the following judgment:

"This day came the plaintiff by their attorneys and the defendant being solemnly called came not but wholly made default, and it appearing to the court that the defendant, J.E. Branton, had been duly, legally, and personally served with process herein and within the time required by law, and the court having been fully advised in the premises doth find for the plaintiff in the sum of ten thousand four hundred and seventy-four dollars and fifty cents. It is therefore ordered, adjudged, and decreed that the plaintiff, O.B. Crittenden Co. do have of and recover from the defendant, J.E. Branton, the sum of ten thousand four hundred and seventy-four dollars and fifty cents, and all costs expended in this behalf, for which let execution issue."

The appellant contends that the court erred in sustaining the demurrer, because the release of W.C. Branton avoided the note or released him from liability under the Negotiable Instruments Act, and that this act repeals the Joint and Several Debtor Statute contained in chapter 39 of Hemingway's Code, section 2169 (section 2682, Code of 1906), which reads as follows:

"In all cases of joint and several indebtedness, the creditor may settle or compromise with and release any one or more of such debtors; and the settlement or release shall not affect the right or remedy of the creditor against the other debtors for the amount remaining due and unpaid, and shall not operate to release any of the others of the said debtors; and all mortgages or securities for the said indebtedness shall remain in full force against the debtors not released, in favor of the creditor, and also in favor of such of the debtors as may be entitled to contribution, payment, or reimbursement from others of said debtors, and the right of payment, contribution or reimbursement, as among themselves, shall not be affected by this section; and if any debtor, so released, shall have paid more than his ratable share of the whole debt, the whole amount paid by him shall be credited, and if less than his ratable share, then the full amount of his ratable share shall be credited, and the other debtors shall be liable for the residue."

Section 119 of the Negotiable Instruments Act (section 2697, Hemingway's Code), entitled "Instrument — How Discharged," reads as follows:

"A negotiable instrument is discharged:

"(1) By payment in due course by or on behalf of the principal debtor.

"(2) By payment in due course by the party accommodated, where the instrument is made or accepted for accomodation.

"(3) By the intentional cancellation thereof by the holder.

"(4) By any other act which will discharge a simple contract for the payment of money.

"(5) When the principal debtor becomes the holder of the instrument at or after maturity in his own right. Laws 1916, chapter 244. In effect July 7, 1916."

So the question presented for decision mainly is whether or not this section of the Negotiable Instruments Law repeals section 2169 of Hemingway's Code (section 2682 of the Code of 1906). It is a familiar rule of statutory construction that repeals by implication are not favored. In the case of Elkin Henson GrainCo. v. White, 134 Miss. 203, 98 So. 531, which case seems to us to be applicable to the point involved here, we had before us the question as to whether the Negotiable Instruments Law repealed section 2085 of Hemingway's Code, which declared void all notes or other securities given for the purchase price of intoxicating liquor. This court held that the said section was not repealed by the Negotiable Instruments Law, that this act did not repeal, by implication, all the other statutes which might be applied to a negotiable instrument. It will be noted from a careful reading of section 2169 that this statute is not only applicable to negotiable instruments, but that it applies to all kinds of joint and several indebtedness, and, consequently, should not be held to be repealed by implication. The Negotiable Instruments Act, in the section above set out, does not specifically provide what the effect of releasing one of the joint and several makers of a negotiable instrument would be. We think that both statutes can stand without conflict. The law merchant or common law of negotiable instruments was modified by section 2169, Hemingway's Code, and it was a part of the law of the state when the Negotiable Instruments Law was enacted, and, unless repealed expressly or by implication, remains a part thereof. We think this statute is a wholesome statute, promotive of the public welfare, and that it should not be held to be repealed by the Negotiable Instruments Law. As we understand it, it was not the purpose of the legislature to repeal all other statutes affecting negotiable instruments; and therefore the statute stands and is applicable to the present transaction.

The effect of the release of W.C. Branton under the last part of this statute is to release one-half of the joint and several obligation. It is expressly provided in the last paragraph of the said statute that:

"If less than the ratable share, then the full amount of his ratable share shall be credited, and the other debtors shall be liable for the residue."

The special plea did not present a complete defense to the entire obligation, but was effective to the extent of one-half of the joint and several obligation, and the court therefore was in error in sustaining the demurrer because it was a defense to at least one-half of the amount sued for.

It will be further noted from the statement of facts that there was a plea of the general issue which was undisposed of so far as the record shows. The judgment entered by the court below was a default judgment, and was improperly entered in the absence of the disposition of the plea of the general issue.

It follows from what we have said that the judgment of the court below will be reversed and the case remanded for further proceedings in accordance with this opinion.

Reversed and remanded.

ON SUGGESTION OF ERROR. The suggestion of error filed is more addressed to the change of certain words in the opinion than to the result. Said suggestion of error quotes from the opinion as follows:

"The effect of the release of W.C. Branton under the last part of this statute is to release one-half of the joint and several obligation. It is expressly provided in the last paragraph of the said statute that `if less than the ratable share, then the full amount of his ratable share, shall be credited, and the other debtors shall be liable for the residue.' The special plea did not present a complete defense to the entire obligation, but was effective to the extent of one-half of the joint and several obligation, and the court therefore was in error in sustaining the demurrer because it was a defense to at least one-half of the amount sued for." (The underscoring is ours.)

We see no objection to changing the words "one-half" as used in the above quotation to the words "ratable share," and the same will be sustained to that extent, but we do not decide whether it would be competent on a retrial to show aliunde the notes the understanding between the partners, nor do we decide whether or not the notes are the measure of the obligation between all parties.

As suggested, the record did not show what part of the partnership undertakings were to be borne by each of the partners, but we are leaving the court below on the retrial to determine these questions.

As the judgment rendered heretofore is correct in its results, the suggestion of error will be overruled.

Suggestion of error overruled.