Where a promissory note, payable to a firm, was signed by one of
the partners in the firm together with two other persons, and suit
was brought upon it against these two other persons in the name of
the payee partner upon the ground that the note was intended for
his individual benefit and that the insertion of the name of the
firm as payees was an error, it was clearly his duty to prove such
error upon the trial.
If these two other persons were merely sureties (a fact for the
jury), proof of such error would not make them liable beyond the
terms of their contract unless they were privy to and agreed to the
same. Neither a court of law nor equity will lend its aid to affect
sureties beyond the plain and necessary import of their
undertaking. This is the doctrine of this Court, of the state
courts, and of England.
The payee partner having brought into the evidence the terms
upon which the partnership was dissolved, by which it appeared to
be his duty to collect the assets, pay the debts, and settle the
concerns of the partnership, it was competent for the jury to judge
whether the note was given provisionally and designed to abide the
settlement of the affairs of the firm, and if so then it became
necessary for the payee partner to prove the fulfillment of these
duties before any right of action upon the note accrued to him.
The note being drawn by one of the partners payable to his own
firm, this drawer partner was entitled to one-half of it, and the
obligation of the sureties was diminished
pro tanto.
Where the plaintiff excepted to the opinion of the court, which
opinion was more adverse to the defendants than to the plaintiff,
this Court will not, at the instance of the plaintiff, reverse the
judgment, although there may have been error in the instructions,
provided that error consisted in giving the plaintiff too much.
Page 47 U. S. 293
This case was formerly, in a preliminary stage of it, before
this Court, and is reported in
36
U. S. 11 Pet. 25.
The facts of the case are sufficiently set forth in the opinion
of the Court.
MR. JUSTICE DANIEL delivered the opinion of the Court.
The record in this cause being encumbered with matter deemed
wholly irrelevant to the true points in controversy between the
parties, much of this matter the Court will pass over, embracing
within its view such portions of the record only as regularly
present those points, and the rulings of the circuit court with
respect to them. In this view, little else need be presented except
the pleadings in the cause, the note on which this action is
founded, the fact of a co-partnership between the plaintiff in
error and James H. Ficklin, and the agreement comprising the terms
on which the co-partnership was dissolved, these three
last-mentioned documents being referred to in the pleadings and
appealed to by the parties on both sides of this cause to sustain
the positions on which they respectively rely, and lastly the
instructions prayed by the parties and given by the circuit
court.
This is, according to the peculiar proceedings in the State of
Louisiana, an action at law, although, from the mode of proceeding
by petition, from the introduction into that petition of various
matters
dehors the instrument set out as the immediate
cause of action, and from the converting in one proceeding parties
standing
sui juris with those who sustain a representative
character, it bears a striking resemblance to a suit in equity.
The petition states that sometime in the year 1815, the
plaintiff and one James H. Ficklin formed a co-partnership and
transacted business under the name of McMicken & Ficklin; that
about 9 September, 1817, the said co-partnership was dissolved by
mutual consent; that at the time of said dissolution there was a
stock of goods on hand, which said Ficklin took and purchased at
cost, with five percent addition thereon, and for the payment of
one-half of said stock of goods he gave to the petitioner a
promissory note dated September 20, 1817, due and payable on 1
March, 1819, to the order of McMicken & Ficklin, for the sum of
$4,866.93 1/2, executed by said Ficklin, by Jedediah
Page 47 U. S. 294
Smith, and Amos Webb, the defendant, whereby the drawers became
bound to pay the whole of the said note, which note is annexed as a
part of the petition.
The petitioner then proceeds as follows:
"Your petitioner further shows that said obligation was
erroneously made payable to McMicken & Ficklin, though in truth
and in fact said note was dated and executed subsequent to the said
dissolution of said firm and was made towards and in behalf and for
the sole and individual benefit of your petitioner, the joint name
or the name of the late firm being used and intended for your
petitioner's sole benefit, said Ficklin being in no wise a party or
interested therein except as one of the obligors."
"Your petitioner further shows that since the execution of the
said note or obligation, the above-mentioned Jedediah Smith, one of
the co-obligors thereof, died, leaving his wife, the said Mary Ann
Smith, and two minor children, Catharine and Sarah, all of whom now
own and possess all the property and estate by the said Jedediah
Smith left at his decease."
"The mother in right of her community, and said minors as heirs,
and the said Mary Ann Smith, the widow of said deceased, has since
married one Ira Smith, the said defendant herein, by reason of
which said several premises the said Mary Ann, Catharine, and Sarah
have become obligated and bound,
in solido, to pay your
petitioner the whole amount of said note or obligation, together
with interest, according to the tenor and effect thereof, which
they refuse, though often and amicably demanded to pay."
The note on which this action was instituted and referred to in
the petition is in the following words:
"
St. Francisville, Sept. 20, 1817"
"$4,866.93 1/2. On the first day of March, 1819, we or either of
us promise to pay jointly or separately unto McMicken & Ficklin
or order four thousand eight hundred and sixty-six dollars
ninety-three and a half cents, being for value received, with ten
percent interest after due until paid."
"JAMES. H. FICKLIN"
"JED. SMITH"
"AMOS WEBB"
The only remaining documentary evidence referred to in the
petition, and in accordance with which it is alleged that the note
in question was executed, is found in the agreement entered into by
McMicken & Ficklin upon the dissolution of their
co-partnership, and is in the following words:
Page 47 U. S. 295
"Memorandum of an agreement, made and entered into this 8
September, 1817, between Charles McMicken, Jr., and James H.
Ficklin, both of the Town of St. Francisville, lately trading under
the firm of McMicken & Ficklin; that they have this day by
mutual consent dissolved their co-partnership aforesaid, and that
Charles McMicken, Jr., is put in full possession of all the books,
notes, and accounts, and all other papers relating to the firm
aforesaid, with full power to settle and collect all the dues and
demands owing to the said firm, either at law or otherwise, by
exchange or re-exchange of notes or accounts or any other mode he
may think advantageous to the concern, and when in funds sufficient
to pay off all debts that are due by the firm aforesaid, to pay the
same, until full and final payment and settlements are made, and to
employ at his discretion such person or persons as he shall think
necessary for the completion of the business, and that James H.
Ficklin take all the goods on hand at cost, with an advance of five
percent on the whole amount, payable as follows,
viz.,
three thousand by his draft on Flower & Finley, with their
acceptance thereof, payable 1 March, 1818, and their acceptance in
the same manner (or some good house in New Orleans in their stead)
for any further sum to meet the one-half of the whole amount of
goods, payable on 1 May, 1818, and for the remaining half he gives
his joint note, with Amos Webb and Jedediah Smith, payable on 1
March, 1819; and by the noncompliance of James H. Ficklin in giving
the aforesaid acceptances and note, this agreement to remain null
and void so far as the sale of the goods to him, and all the sales
of goods by him, for the period of thirty days, the time allowed
him to comply with the foregoing, shall be carried to the joint
benefit of the last firm."
"In witness whereof we hereunto subscribe our names, the day and
date above written."
"JAMES H. FICKLIN"
"CHARLES McMICKEN"
Several pleas were interposed by the defendants or respondents
below to the demands in the petition. The Court deem it necessary
to advert to such of these pleas only as are connected with the
points comprised in the rulings of the judge at circuit.
Thus, in the 3d plea it is denied that the note in question was
made to the petitioner and that Ficklin, Webb, and Smith ever
promised to pay the money therein mentioned to McMicken alone, or
that the note was made on behalf of McMicken, or that the
partnership name of McMicken & Ficklin was intended
Page 47 U. S. 296
to be used for the benefit of McMicken alone. They insist upon
the contract as apparent on the face of the note, and call for
strict proof of the allegations of the petitioner. They aver that
it was well known that Webb and Smith signed the note as sureties
-- that if there ever was any consideration for their obligation,
it has failed, and that neither Ficklin as principal nor Webb and
Smith as sureties were ever bound to pay this note.
4. They plead further and specially a want of consideration,
averring that Ficklin, as partner, was entitled to one-half the
stock; that he paid McMicken for one-half by drafts and
acceptances, mentioned in the article of dissolution, which were
paid; that the demand of McMicken for the note of Ficklin, Webb,
and Smith for the other half was a fraudulent contrivance or an
error or misconception of the parties, and could form no legal
consideration for the note.
5. They further plead that the note was executed by Ficklin as
principal and Webb and Smith as sureties to McMicken & Ficklin,
of which firm Ficklin was a partner; that by the dissolution of the
firm, one-half of Ficklin's responsibility was extinguished by
confusion, and Webb and Smith became thereby by absolved
pro
tanto; that under the agreement for the dissolution, McMicken
had received $10,000 more than was requisite to pay the debts of
the firm, for which excess he was accountable by the above
agreement, and that thereby the note, to which Webb and Smith were
mere sureties, was paid.
They further plead that the note became due by its terms on 1
March, 1819; that Ficklin died in 1817, leaving a will and
appointing executors; that his estate has been regularly
represented by executors since his death, and that by the laches of
McMicken, in not settling the affairs of the concern or suing on
the note from 1819 to 1835, he is barred by his negligence and by
lapse of time.
And lastly they insist that upon the dissolution of the firm of
McMicken & Ficklin, McMicken had received all the books, notes,
and claims due to the firm and bound himself to settle all the
affairs of the concern out of these funds, so far as they should
prove adequate; that Ficklin was to take the goods on hand, to pay
McMicken for one-half of that stock in certain acceptances, and to
execute his note, with Webb and Smith as sureties, for the
remaining half in value, subject to a contingent responsibility
upon the settlement of the concern by McMicken; that McMicken had
not made such settlement according to the terms of the agreement of
dissolution, and therefore had no right of action against the
representatives of Ficklin or the respondents.
Page 47 U. S. 297
At the trial of this cause, the following instructions prayed
for by the defendants were given by the court and made the subjects
of exception by the plaintiff:
1st. That as plaintiff had alleged that there was error in
making the note sued on, drawn in favor of and payable to McMicken
& Ficklin, and that said note ought properly to have been made
in favor of Charles McMicken only, plaintiff could not recover
without proving such error and mistake, and if no such error or
mistake was proved, the verdict of the jury ought to be in favor of
defendants, for without such proof McMicken alone could not recover
on a note drawn in favor of McMicken & Ficklin.
2d. That if the jury were satisfied that Webb and Smith were
originally only sureties, and that whatever consideration there was
for the note passed between McMicken as one party and Ficklin as
the other party, in such case an express written contract on the
part of sureties is to be strictly construed in their favor, and
they could only be made liable on their contract in the form and
manner in which they had entered into it, and no proof of any error
or mistake as between the principal parties to the contract could
make mere sureties liable beyond the terms of the contract unless
they were privy to and agreed to the same, and if plaintiff could
only recover against the principal party to the contract sued on by
showing error or mistake in that contract, the verdict of the jury
as regarded the sureties should be in their favor.
4th. That if the jury believed that the note sued on grew out of
the settlement of the partnership affairs of McMicken & Ficklin
and was given provisionally in relation thereto, and that McMicken
had charged himself with the settlement of the partnership affairs,
that then McMicken cannot recover on this note without a final
liquidation and settlement of the partnership affairs, and that if
under the circumstances aforesaid McMicken persists in submitting
the suit on this note to the decision of the jury, its verdict
ought to be for the defendant.
5th. That if the jury believed that the note sued on was given
to attend on a settlement and liquidation of the partnership
affairs of McMicken & Ficklin, and McMicken charged himself
with the liquidation and settlement of the partnership affairs of
McMicken & Ficklin, and that McMicken has received partnership
assets sufficient to pay the debts of the partnership, in such case
plaintiff McMicken ought not to recover, and the verdict of the
jury ought to be for the defendants.
6th. That if the jury believed that Ficklin was a partner of the
house of McMicken & Ficklin, to whom the note was
Page 47 U. S. 298
payable, and that the said house has long since been dissolved,
and that the same Ficklin was principal debtor, and Amos Webb and
Jedediah Smith were only sureties in the note sued on, that these
facts created a confusion of the characters of creditor and debtor,
and whenever such event happened, there was a payment of the note
to the extent of the correlative characters of debtor and creditor,
which in this case was one-half.
7th. That if the jury believed that the note sued on was given
in pursuance of the terms of the dissolution of partnership between
McMicken & Ficklin and under an implied agreement that if the
debts due to the partnership were not sufficient to pay the debts
due by the partnership, then Ficklin and his sureties were to make
good and supply one-half of the deficiency, and that McMicken
charged himself with the liquidation of the partnership affairs in
1817, and that McMicken had not rendered an account of such
liquidation before bringing this suit, it was competent for the
jury to say that there was such a laches, neglect, and default on
his part as discharged the sureties.
1st. We can perceive no objection to the ruling of the court in
this instruction; neither argument nor authority can be called for
to sustain a position so elementary and so trite as that the
allegation and proof must correspond. In this case, the petitioner
alleges a separate and exclusive right in himself; the proof which
he adduces discloses an equal right in another. He avers this
discrepancy to be the result of error; he must certainly reconcile
this contradiction or his claim is destroyed by conflict with
itself.
2d. This second instruction we hold to be correct. Even as
between principals, a court will not bind parties to conditions or
obligations to which they have not bound themselves according to a
fair interpretation of their contract. How far any written contract
may be explained, as between parties confessedly principals, by
evidence
aliunde is a nice and difficult question, always
approached with doubt and caution; but as against a surety, neither
a court of law nor a court of equity will lend its aid to affect
him beyond the plain and necessary import of his undertaking.
Equity will not, as against him, assist in completing an imperfect
or defective instrument, much less will it add a new term or
condition to what he has stipulated. He must be permitted to remain
in precisely the situation in which he has placed himself, and it
is no justification or excuse with another, for attempting to
change his situation, to allege or show that he would be benefited
by such change. He is said to possess an interest in the letter of
his contract.
Page 47 U. S. 299
That this is the doctrine in England we see in the cases of
Nisbet v. Smith, 2 Bro.Ch. 579,
Rees v.
Berrington, 2 Ves.Jr. 540, and
Boultbee v. Stubbs, 18
Ves. 20. It is the doctrine of this Court, so declared in the case
of
Miller v.
Stewart, 9 Wheat. 680. It is probably the doctrine
of all the states;
vid. Croughton v. Duvall, 3 Call, 69;
Hill v. Bull, 1 Gilmer, 149. If, then, Webb and Smith were
mere sureties in the note declared on, the plaintiff could not, by
setting up another contract as formed or as intended to be formed
between himself and Ficklin, transfer the responsibility of these
sureties to such contract differing in its terms from that which
they had in fact executed.
4th and 5th, which should be numbered the 3d and 4th
instructions. These two instructions are essentially the same. The
petitioner, in his count or petition, sets out the fact of the
dissolution of the firm of McMicken & Ficklin and refers to the
agreement of dissolution as evidence of the conditions on which it
took place and of the rights vested and the obligations imposed by
that agreement. It is from this document that we gather the facts
of the transfer of the goods on hand to Ficklin in consideration of
the acceptances to be procured and of the note to be executed by
him, with Webb and Smith as his sureties, and the further facts of
McMicken's possession of all the books, notes, and accounts of the
firm and of his obligation to collect the resources and to pay the
debts and settle all the affairs of the concern so far as the means
placed at his command were adequate for these ends. The above
facts, disclosed by the petition and the agreement of dissolution,
were certainly competent evidence for the consideration of the
jury, and from which they might infer the purpose for which the
note to McMicken & Ficklin was executed, the duty of McMicken
to settle the partnership affairs and to pay the debts of the
concern with the funds placed at his disposal, and if they should
infer from these facts that the note executed to McMicken &
Ficklin was given provisionally and designed to abide the
settlement of the affairs of the firm, and that McMicken was bound
by the agreement of dissolution to liquidate and settle the affairs
of the firm, then the jury were bound to find that the fulfillment
of these obligations on the part of McMicken should precede any
right of action on the note, and that without proof of such
fulfillment, they were equally bound to find for the
defendants.
6th. This instruction affirms a position as to which we presume
there can be no room for difficulty or doubt -- namely that on the
note given by Ficklin to his own firm of McMicken & Ficklin,
with Webb and Smith as sureties, Ficklin, as a partner,
Page 47 U. S. 300
was entitled to one-half upon the dissolution of the firm, and
that thereupon,
pro tanto, the obligation of these
sureties would cease, as Ficklin could have no right of action
against himself to compel payment to himself.
7th. With regard to the instruction numbered 7, given on the
prayer of the defendant, we deem it to be in substance the same
with Nos. 3 and 4, which having been already examined and approved,
it is unnecessary to review in detail the same questions in the
last instruction.
There is also, though not designated by any number, what is
denominated in the record an "additional charge" prayed by the
defendants. This, upon examination, being found a mere general
legal proposition in the language of the 2094th article of the
Civil Code, and no immediate application or connection of which to
the pleadings or testimony in this case being attempted nor being
perceived by the Court, it is passed by as immaterial and
unimportant.
On the part of the plaintiffs, there are instructions prayed,
and designated on the record as No. 2 and No. 3; and in No. 2 by
the irregular ordinal arrangement of 4th and 7th; in No. 3 in the
arrangement of 1st, 2d, and 3d.
Instruction 4th, in the first division, is in the following
words:
"That the defendants to this suit, having bound themselves
in solido, cannot claim the right or oblige the plaintiff
to discuss the property of Ficklin or his succession."
Civil Code, art. 3015, 3016. The court below very properly
disposed of this prayer (as it might have disposed of what was
called the additional charge prayed on behalf of the defendants) by
justly remarking that its applicability to the cause was not
perceived, as the defendants were not endeavoring to interfere with
the property or affairs of Ficklin any farther than to assert the
true import and character of their own contract with McMicken &
Ficklin, which they had an unquestionable right to do.
With regard to the prayers 1st, 2d, and 3d in No. 3, although
their relevancy to the true issues taken in this cause is not shown
and the opinion of the court is perhaps not sustainable with
respect to them, yet as that opinion, so far as expressed, is more
adverse to the defendants than to the plaintiff, and the defendants
have not asked its reversal, no right can be recognized in the
plaintiff to complain that he has failed to obtain all he required,
when he has already obtained too much. Upon an examination of this
somewhat anomalous and confused record, we have come to the
conclusion, that the judgment of the circuit court should be, and
it is hereby accordingly
Affirmed.
Page 47 U. S. 301
Order
This cause came on to be heard on the transcript of the record
from the Circuit Court of the United States for the Eastern
District of Louisiana and was argued by counsel. On consideration
whereof it is now here ordered and adjudged by this Court that the
judgment of the said circuit court in this cause be and the same is
hereby affirmed with costs.