Mumford v. Memphis and Charleston Railroad Company. case of an agent for the sale of coal, where it was stated in the bond that he was to have £100 per annum as a salary, which was afterward changed to a commission on the amount of the sales, it was held that this change in the mode of remuneration relieved the surety from responsibility, on the ground that it was a material change in the contract of the parties, and the sureties had the right to stand precisely on the facts recited in their contract. Northern R. Co. v. Whinray, 26 Eng. L. and Eq. R. 488. As we have said, we think this case carries the doctrine too far. The case of Bonar v. McDonald, 1 Eng. L. and Eq. 1, better illustrates the true principle. In that case it was held, where a bank without the knowledge of the sureties, increased the salary of the agent, he undertaking to bear one-fourth part of all losses which be incurred by his discounts, the sureties on his bond were held dis charged. Here the change of salary was also accompanied by an additional stipulation increasing the burden of the agent. In this case, though it did not appear that the loss had occurred from the discounting business, but consisted of a balance due from a customer of the bank, who had been permitted by the agent to overdraw his account to an unusual and unreasonable extent, without security, yet the lord chancellor, delivering the judgment of the House of Lords, said: "But if the arrangement as to the discounts altered the subsisting contract between the bank and its agent, so as to increase the liability of the latter, his sureties may be discharged for all purposes." Such is the law of England and Scotland, and so numerous cases hold. See cases cited in note of American editor, to p. 8, L. and Eq. R. The true principle is very well stated by Mr. Fell in his work on Guaranty and Suretyship, page 248: "So in case of a continuing or subsisting guaranty, any material change in the manner of dealing between the principal and the creditor will discharge the guarantor or surety." And so we think in a case like the present, any material change in the character of the business increasing the responsibility of the agent above that which was fairly contemplated by the sureties, must on sound principle release them from obligation of the contract entered into to indemnify only against the legitimate risks and responsibility of the position to which the agent was appointed, and not the added responsibility of the sales of another office, then filled by another agent. In fact, the change was almost precisely that of imposing upon Mumford v. Memphis and Charleston Railroad Company. the securities the additional responsibility covered by the bond of Patterson & Bro. at the time of their contract. Surely this cannot be allowed without consultation or assent. The two offices, as we have seen, were distinct and separate, and had been probably for eighteen years, the one known as the depot office, the other as the city office. The undertaking for the one can not be held to extend to the other without doing violence to the truth of the case, and making a contract, not construing and carrying one out as understood by the parties at the time. The argument of PARKER, Ch. J., in the case of the Boston Hat Manufactory v. Messinger, 2 Pick. 232, may well close this view of the question on the affirmative phase of it. He says: "It must be presumed that the sureties had regard to the known course of transacting business when they consented to become responsible, and if it should be materially changed so as to increase the risk without their consent, they would in equity be exonerated from their liability, and if the principles of equity in relation to sureties was adopted and enforced at law, the bond would be avoided." This is conformable to the principles of justice and to the essential nature of contracts, for if an obligation is valid because it is evidence of the consent of a party to be bound, it surely cannot be converted into a different engagement which never had his consent, and we find cases decided both at law and equity have enforced this principle of natural justice. That like defenses may be made in law as in equity in a somewhat analogous question, that is, release of surety by the creditor abandoning a security taken for the debt, we have lately held in the case of Renegar v. Thompson, 1 Lea, 457. In reply to the argument of counsel for plaintiff, that it could not be seriously contended that the company could not change the number of its employees, either by increase or diminution, we would but say, that is not the question in this case. But the real question is, whether the company can accept an obligation guaranteeing faithfulness in an office to which a party is appointed, and then add the duties of another like office to it, thereby increasing the receipts more than double, consequently the risks of the sureties, as well as in like degree increasing the temptations of the agent to appropriate such increased proceeds, and then hold the parties to responsibility for this new engagement without notice or assent. That the company understood they were imposing heavy additional burdens on the agent, is evidenced not only by the well-known addi McCampbell v. McCampbell. tional receipts in the new position, but by the fact that although motives of economy had prompted the change, yet the salary in the new and more responsible position was increased for the additional burden and responsibility, from seventy-five to one hundred and twenty-five dollars, as one witness says, but certainly to $100 per month. We do not deem it necessary to go into an examination of the various cases cited by plaintiff. Suffice it to say, they are mainly, if not all, cases where the duties of the precise office to which one party has been appointed have been in some degree changed, but in the legitimate course of business, and not the additions of another office with its burdens. Whether all of them are precisely reconcilable with the view of this opinion, we will not stop to inquire. If they are, or any of them hold differently, we do not approve such holding. We believe, however, they do not, when analyzed, conflict in the least with the principle of this opinion when fairly considered. Other questions discussed need not be examined, as this is conclusive of the result in this case. Rendering the judgment that should have been rendered by the court below, we reverse the case, and direct judgment be entered for the defendants. MCCAMPBELL v. MCCAMPBELL (2 Lea, 661.) Marriage-note from husband to wife. Equity will enforce a note executed by a husband to his wife, during coverture, in consideration of her moneys received or collected by him." BILL ILL to recover the amount of a note. The opinion states the facts. The complainant had judgment below. H. H. Taylor, for complainant. Caldwell & Son, for defendants. COOPER, J. Bill by a widow against the executors of the deceased husband to recover the amount of a promissory note executed by the To same effect, May v. May, anta, 899. McCampbell v. McCampbell. husband directly to her during the coverture. The chancellor granted the relief sought, and the defendants appealed. The estate is solvent and therefore, no question touching the rights of creditors is involved. Nor is there any serious difficulty in regard to the facts. At the time of the marriage of the testator and complainant, the complainant owned some little personal property, and a few hundred dollars due to her by note, and as her distributive share of her father's estate. The note in controversy is for $100, and bears date the 23d of June, 1866, about nine years before the death of the husband. The proof shows that the husband permitted the wife to hold and renew in her own name the notes held by her at the time of the marriage, or afterwards received. There is also proof that the husband intended that the wife should have all the property brought by her into the marriage; that no part of it should be used for the support of the family, or be divided in the division of the estate. In 1871 he made a will in which he bequeathed to his wife, among other things: "All the notes of hand in my possession that are taken in her name either before or since the marriage." In a subsequent will, which is the one under which the defendants are acting, he proposed to insert a similar provision, but the draughtsman told him it was unnecessary, the notes being payable to her. One of these notes of a third person was found in a pocketbook in a chest in which the testator kept his papers, and to which both the husband and wife had access. In the same chest was found the note in controversy, loose among the papers. The complainant had claimed that there was such a note, and it was found upon search in the presence of the parties. The complainant testifies that the note was given for money received as part of her distributive share of her father's estate. This fact is, however, not material to her rights. The law of this State is that a wife is entitled, by right of survivorship, to all her choses in action not reduced to possession by the husband during coverture. Bryant v. Puckett, 3 Hayw. 252; Ross v. Wharton, 10 Yerg. 190. And there is in this respect no distinction between a chose in action accruing to the wife during the coverture, and a chose due her before marriage. Cox v. Scott, 1 Memph. L. J. The law is the same if the chose be made payable to husband and wife, whether the consideration pass from the wife, McMillan v. Mason, 5 Col. 263, or from the husband. Johnson v. Lusk, 6 Col. 113; S. C., 1 Tenn. Ch. 3. And creditors of the husband 248. McCampbell v. McCampbell. cannot reach the choses in action of the wife without his active aid in reducing them to possession. Snowden v. Lindsley, 4 Col. 122; Harris v. Taylor, 3 Sneed, 536; Embry v. Robinson, 7 Humph. 444. The wife is moreover entitled to a settlement out of such chose as against the husband and his creditors. Dearin v. Fitzpatrick, Meigs, 551. Whether an act of the husband in converting a chose in action of the wife is a reduction into possession depends upon his intention. If he actually collect the money, but only as the agent of the wife, and invest it in property for her benefit, the property will belong to the wife, even against the husband's creditors, although the title be taken to the husband. Ready v. Bragg, 1 Head, 512. So, if the wife make the collection, and with the consent of the husband, vest the money in realty in her name. Cox v. Scott, 1 Memph. L. J. 248. And the fact that the husband assents to what is done is sufficient to uphold the right of the wife, and exclude the idea of reduction into possession by him, without proof of an express promise on his part. Cox v. Scott ut supra; Tarbox v. Tonder, 1 Tenn. Ch. 164, 168. A consideration passing from the wife will sustain a direct conveyance of property by the husband to her, and the very nature of the transaction will fix the property, even if personalty, with a trust for the separate use of the wife without any words to that effect. Powell v. Powell, 9 Humph. 477; Saunders v. Harris, 1 Head, 207. And an ante-nuptial settlement will prevent the note of a firm, of which the husband is a partner, previously executed to the wife, from being extinguished by the marriage. Bennett v. Winfield, 4 Heisk. 440. And sustain the wife's right to the proceeds of such a note executed after the marriage. Cowan v. Mann, MS. opinion, by FREEMAN, J. At an early day, it was held that the consideration of money borrowed from the wife would, in equity, make the husband a trustee for the wife. Slanning v. Styles, 3 P. Wms. 334. If, therefore, a note be given by the husband to the wife for money advanced by her out of her separate estate, it constitutes a declaration of trust in favor of the wife. 1 Dan. Neg. Inst., § 241, citing Murray v. Glasse, 23 L. J. Ch. 126. To the same effect seems to be the case of Huber v. Huber, 10 Ohio, 37, cited, with approval, by Judge TURLEY, one of the most eminent of our predecessors on this hench, in Powell v. Powell, 9 Humph. 488. And so, in principle, is the decision upon an obligation of the husband made directly to the wife, promising to pay money borrowed, in the case of Hind's Estate, 5 Whart. 138. VOL. XXXI-79 |