Case ID: ohio-st_61/html/0119-01.html
Source: Caselaw Access Project
Author: {"author": "Burket, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

McCoy et al., Trustees v. Jones et al.
    
      Several judgment against one of joint defendants — Contract several in effect though joint in form — Rights of surety on joint note — Section 3328, Revised Statutes — Practice.
    
    1. The rule that it is improper for a court to render a several judgment against one or more defendants, leaving the action to proceed against the others, in actions founded upon joint contracts wherein the plaintiff has no election as to the joinder of defendants, his only remedy being by joint action, has no application in favor of a defendant who pleads that he is surety only and has been released from liability on the contract by reason of an extension of time of payment without his consent, the plaintiff in his reply admitting such suretyship. As between parties so pleading the contract is in legal effect several although joint in form.
    2. Courts are confined to a consideration of the statements in the pleadings in disposing of a motion for judgment notwithstanding the verdict under Section 5328, Revised Statutes. The record outside of the statements in the pleadings should not be considered in disposing of such motion.
    (Decided October 31, 1899.)
    Error to the Circuit Court of Clark county.
    The plaintiffs in error commenced an action in the court of common pleas against the defendants in error upon a promissory note, a copy of which, with the credits thereon, is as follows:
    “Vienna X. Roads, Clark County, Ohio,
    July 11, A. D., 1887.
    One day after date, we promise to pay to the trustees of Vienna Lodge, No. 345, I. O. O. F., two hundred dollars with interest at eight per cent, from date. Value received.
    Thomas Jones,
    J. Frock.
    July 2,1888, received on the within note $16.00.
    September 21, 1889, received on the within note $16.00.
    
      December 7, 1890, received on the within note $16.00 interest.
    January 9, 1892, received on the within note per J. S. Rice, $54.98, per cent, paid on the assignment of Thomas Jones.”
    Both the defendants were residents of Clark county and were duly summoned.
    The defendant, Thomas Jones, failed to demur or answer to the petition. The other defendant, Mr. Frock, filed an answer in which he averred that he was not indebted to the plaintiffs in any sum whatever on the note, because with full knowledge of the plaintiffs he executed the note without consideration as surety for Mr. Jones, who received the whole consideration for which the note was given. That on the 2nd day of July, 1888, without his knowledge or consent, in consideration of the payment of interest on said note at the rate of eight per centum per annum, the plaintiffs agreed with Mr. Jones to extend the time of payment of the note for the period of one year from the 11th day of July, 1887, and in pursuance of that agreement Mr. Jones paid to the plaintiffs the sum of $16.00 on the 2nd day of July, 1888, as interest on the note, and that the time' of payment was then and thereby, without his knowledge or consent, extended to the 11th day of July, 1888, and that he was thereby released from all liability as one of the* makers of the note.
    A second ground of defense averred an extension of time of payment of the note for one year from and after the 11th day of July 1888, in consideration of eight per cent, interest agreed to be paid by Mr. Jones. A third ground of defense averred that the plaintiffs agreed on the 21st day of September, 1889, to extend the time of payment of the note until the 11th. day of July, 1890, in consideration of eight per cent, interest promised by Mr. Jones to be paid. A fourth ground of defense averred a like agreement made on the 7th day of December, 1890, for an extension from the 11th day of July, 1891.
    The reply admitted that Mr. Frock executed the note as surety, and denied all the other allegations of his answer.
    The 'cause was tried to a jury at the January term, 1893, and a verdict returned in favor of Mr. Frock. A motion was filed for a new trial. Before the hearing of that motion a judgment was rendered by the court against Mr. Jones upon the petition for the full amount due on the note, he being in default for demurrer or answer. Afterward, late in the same term of court, the motion for a new trial was sustained, and the verdict of the jury in favor of Mr. Frock was set aside and vacated and a new trial of the issues awarded.
    Afterward, at the May term, 1897, the issues were again tried to a jury and a verdict returned against Mr. Frock for the amount due on the note. He filed a motion for a new trial, which was overruled, and he also filed a motion in arrest of judgment, of which the following is a copy:
    “Now comes Jeremiah Frock, one of said defendants, and moves the court, upon the statements in the pleadings and record herein, to arrest judgment on the verdict in this action against said Jeremiah Frock in favor of the plaintiffs, as by the same he is in law entitled to a judgment against said plaintiffs and especially because a judgment was rendered in favor of said plaintiffs against said Thomas Jones for the full amount of the claim sued in this action by said court on the 10th day of April, A. D., 1893, which has not been reversed or set aside, and since which time no cause of action has existed in favor of said plaintiffs against said Jeremiah Frock on the note mentioned in the petition and amended petition of said plaintiffs.”
    This motion was also overruled and exceptions taken. Judgment was then entered on the verdict. Mr. Frock filed his petition in error in the circuit court, and among other grounds claimed that the overruling of his motion in arrest of judgment was error.
    The circuit court held that the overruling of the motion in arrest of judgment was error, and for that cause alone reversed the judgment, and remanded the cause to the court of common pleas with instructions to sustain that motion, and the proper mandate was sent to- that court.
    Thereupon the plaintiffs in error, also plaintiffs below, filed their petition in error in this court seeking to reverse the judgment of reversal of the circuit court, and to have the judgment of the court of common pleas affirmed.
    
      Mower & Mower and Patrick Higgins, for plaintiff in error.
    Was there an extension of time, such as would release the surety?
    No authority was ever granted for an extension nor for indulgence. The record shows no agreement. At the time of all the other payments as appears upon the indorsements made upon the note, not only the principal was overdue, but the accumulated interest amounted to more than payments. The mere payment of interest in advance does not imply an agreement to extend the time for the payment of the principal as matter of law. The inquiry is always one of fact, and such, payment may or may not be evidence of such agreement according to the circumstance; the inquiry was one of fact, one for the jury.
    It may possibly be prima facie evidence of an extension, but it is a presumption of fact not of law. 7 Law Bulletin, 281, 8 Dec. (Re.) 391; 8 Law Bulletin, 306, 8 Dec. (Re.) 540; Vore v. Woodford, 29 Ohio St., 251; Gard v. Neff, 39 Ohio St., 610.
    Was the motion to arrest judgment properly made?
    This motion could only be made by virtue of the statutes. Section 5328.
    What grounds in the pleadings for the defendant Jeremiah Frock to maintain a motion to arrest judgment when nothing in the pleading would entitle him to a judgment in his favor, we therefore claim that the motion to arrest judgment under the statute was wholly unauthorized and in this the circuit court and not the common pleas erred.
    Whatever is alleged in arrest of judgment must be such matter as would on demurrer be sufficient to overturn the action or plead. Canal Co. v. Commonwealth, 60 Pa. St., 367.
    And in this, the court does not look beyond the' face of the pleading. Edgerly v. Emerson, 23 N. H., 555; 31 American St. Reports, 514.
    The record shows no plea to the effect that a judgment against one had been- rendered.
    It shows no objection to the entry by the defendant and therefore it is presumed by him to have been made by the consent of the surety and therefore waived.
    The real and only remaining question is: Will a judgment rendered against the principal upon a joint note by default upon the sole answer of the surety thereon after an aswer setting forth a sole defense for him and not for the principal thereon, without ever pleading a bar on account of said judgment be in fact a bar to a further judgment against him in the same action?
    There is no doubt that at common law if the same had been pleaded it would be a bar. Beach on Modern Law of Contracts, 1 Yol., section 687.
    This is changed by statutes. Beach, Sec. 687, 8, 9; Roby v. Ramsberger, 27 Ohio St., 677; Lambkin v. Chrisholm, 10 Ohio St., 45; Hickenman v. Young, 134 N. Y., 170.
    The Ohio law is in sections 5311, 5312.
    It will be borne in mind that it is not the one against whom the judgment was rendered, to-wit, Jones, who complains, but it is Jeremiah Frock, who puts in the plea of prejudice. How does it prejudice him? Hempy v. Ransom, 33 Ohio St., 318.
    The circuit court decided this action upon that decision and we contend most emphatically that the decision by it in this case is not in accord with the previous decisions in the supreme court of Ohio and that the same involves the construction of statutes of this State.
    In this case of Hempy v. Ransom, the judge cites and distinguishes the various cases bearing upon-this question theretofore decided by this court and, if we understand the English language, the same is not in accord with the circuit court in this case but is compatible with the court of common pleas.
    We claim the judgment of the circuit court is in violation of the holding of this court in the case of Yoho v. McGovern, 42 Ohio St., 11. By parity of reasoning how much more would a judgment by default against one maker, the other maker being in court pleading for a separate defense, be no bar to proceeding against such one. We claim this is not only the law, the decisions of this court, but that it is good common sense, the foundation of all law, for a judgment taken in advance against an insolvent principal, while his surety is litigating his separate defenses, might inure to his benefit, his injury never, for while there may be many judgments, there can be but one satisfaction. We therefore submit under the provisions of section 5311 and 5312,3162,3163, 3164, 3165, 3166 and 5366 of the Revised Statutes of Ohio, and the decision of this court, the common pleas was right in its judgment and the circuit, court wrong.
    
      George Arthur, for defendants in error.
    1. A final judgment in favor of the holders of a joint note against one of the makers is a bar to any subsequent proceedings, or judgment, on the same instrument, against the other makers. This was the rule of the common law; and it is the rule in Ohio, when all of the makers of the note are within the jurisdiction of the court, and are defendants in the action in which the judgment is rendered.
    This principle has been so long settled, and so often recognized and followed by this court, and by all the other courts in this State, that it is not necessary to make an argument, or to cite any authorities in its favor. Nevertheless, it may not be improper to call attention to the following cases which fully sustain the doctrine: Sloo v. Lea, 18 Ohio, 279; Clinton Bank v. Hart, 5 Ohio St., 34; Lampkin v. Chrisholm, 10 Ohio St., 451; Auker v. Adams & Ford, 23 Ohio St., 543; Bazell v. Belcher & Doral, 31 Ohio St., 573; Hempy v. Ransom, 33 Oho St., 317; Reynolds v. Railway Co., 29 Ohio St., 602; Avery v. 
      Vansickle, 35 Ohio St., 274; Yoho v. McGovern, 42 Ohio St., 14; Smetters & Harris v. Rainy, 14 Ohio St., 291; Roby v. Rainsberger, 27 Ohio St., 676; Carr v. Beckett, 1 Ohio Circuit Court Reports, 72; Olcott v. Little, 9 N. H., 259; Avery v. Vansickle, 35 Ohio St., 270; Yoho v. McGovern, 42 Ohio St., 11; Carr v. Beckett, 1 Circuit Court Reports, 72, 1 Circ. Dec. 43.
    There is another sound reason why the judgment of the circuit court should be affirmed. Frock alleges in his answer, and the plaintiffs admit in their reply, that he was surety for Jones on the note.sued on.
    Notwithstanding these facts, a yerdict was returned against Frock for the full amount of the plaintiff’s claim; and the court of common pleas, oyerruling Frock’s motion for a new trial, rendered a judgment against him on said yerdict; to which he excepted.
    An agreement between the holders and the principal maker of a note to extend the time of its payment releases the surety, if made without his consent. Wood v. Steele, 6. Wall. (U. S.), 80.
    The alteration of a note which releases all of the parties who do not consent to it may consist in changing (1) its date, or (2) the time of payment, or (3) the place of payment, or (4) the amount of principal to be paid, or (5) the amount of interest to be paid, or (6) the kind of money in which it is to be paid, or (7) the number or relations of the parties, or (8). the character and effect of the instrument as matter of obligation or evidence. Daniel on Negotiable Instruments, 350, 353.
    The new contract, which releases all of the parties who do not consent to it, may be either express or implied. If the facts, proved or admitted, necessarily imply an extension of time for a definite period, the surety who has not consented is as effectually released from his obligation to pay the note as he would be by an express contract having this effect.
    The payment of interest in advance has this effect. Gard v. Neff, 39 Ohio St., 607; Brandt on Suretyship and Guaranty, Sec. 305n; Bank v. Carroll’s Adm’r, 5 Ohio 215; McComb v. Kittredge, 14 Ohio, 351; Jones v. Brown, 11 Ohio St., 601; Vore v. Woodford, 29 Ohio St., 251; Fawcett v. Freshwater, 31 Ohio St., 639; Blazer v. Bundy, 15 Ohio St., 57; Wood v. Newkirk, 15 Ohio St., 295; Osborne v. Low, 40 Ohio St., 347; Bank v. Colcord, 15 N. H., 119; Bank v. Lollins, 13 Me., 202; Bank v. Pierson 30 Vt., 711; Hubbard v. Olden, 22 Kansas, 363; Shaw v. Leigh, 39 Penn., 226.
   Burket, J.,

While this is undoubtedly the general rule, it has no application to a case like the one at bar, wherein one of the makers avers in his answer that he is only surety for his co-defendant, and the plaintiff in his reply admits this to be true. In such cases the plaintiff and the surety by their pleadings concede the contract, joint in form, to be in legal effect several as between themselves. Such pleadings cannot bind the alleged principal, and even if he should be in default,it would be error to render judgment against him, and leave the action to proceed against the surety, and for such error he might have the judgment against him reversed, as was done in Aucker v. Adams, supra. But the surety would have no cause for complaint against such judgment, unless it should appear that his defense was thereby prejudiced, as was held in Hempy v. Ransom, 33 Ohio St., at page 317. The defense set up by Mr. Frock in this case could not be prejudiced by the judgment against Mr. Jones, and therefore the rendition of that judgment was not prejudicial to Mr. Frock, and the judgment rendered against him by the court of common pleas should have been affirmed by the circuit court.

Mr. Frock having pleaded in his answer that he was only surety on the note, which plaintiffs admitted in their reply, and having by that means defended upon the ground that he was released from liability as surety by reason of the extension of time of payment of the note, is estopped after failing in such defense, from changing his position on motion for judgment notwithstanding the verdict, and claiming that he was a joint maker of the note as principal, and that therefore the entire note was merged into the judgment rendered against Mr. Jones. He cannot avail himself of inconsistent defenses under the same pleadings.

There is another reason why the motion in arrest of judgment was properly overruled by the court of common pleas.

Before the adoption of the code in this State, there was what was known as a motion for judgment non obstante -veredicto, which was available to the plaintiff where the defendant put in a defective plea of confession and avoidance, and yet obtained a verdict in his favor. The plaintiff’s case being confessed by the plea, and the matter in avoidance being insufficient, the verdict was wrong and judgment should be entered in favor of the plaintiff notwithstanding the verdict. An instance of such a motion is found in the case of Buckingham v. McCracken, 2 Ohio St., 287.

There was also what was known as a motion in arrest of judgment, which was available to either party for error appearing on the face of the record, which might have been a good ground for demurrer as to the substance, and not merely as to the form.

The names of both of these motions were dropped from the code of civil procedure, and the substance of both was carried into the code, now section 5328, Eevised Statutes, which reads as follows: “When, upon the statements in the pleadings, one party is entitled by law to judgment in his favor, judgment shall be so rendered by the court, although a verdict has been found against such party.”

It will be noticed that a judgment can be rendered in favor of a party under this section when the verdict is against him, only when he is entitled to such judgment “upon the statements in the pleadings;” not upon the pleadings and journal entries or record, but upon the pleadings alone. In Challen v. Cincinnati, 40 Ohio St., 113, 114, it is said: “On such a motion the court could only look at the pleadings.”

There was good reason for confining such motion to the statements in the pleadings, because to such statements the party making them consents, while the record may be, and often is made, in part at least, by order of the court, against the wishes of both parties; or if concurred in by one party, it may fail to show which one concurred, and it would be unfair to hold a party to consequences flowing from 'a record to which he did not consent the same as if he had consented thereto.

The motion for judgment notwithstanding the verdict under this section, is therefore confined to the statements in the pleadings, and what appears on the journal in a former judgment cannot be considered.

It is said in the brief for counsel for defendant in error, that the judgment against Mr. Jones was rendered on motion of the plaintiffs in error. But the record fails to show this fact. The record says: “It appearing to the court that Thomas Jones, who the court finds is the principal upon the promissory note sued upon in this action, was and is in default for answer or other pleadings to the petition, and that the plaintiffs should recover the sum due from him to the plaintiffs on said note, which the court finds is the sum of $187. It is therefore considered by the court that the plaintiffs recover from the defendant, Thomas Jones, said sum of one hundred and eighty-seven dollars with eight per cent, interest, and costs to be taxed.”

There is nothing to show whether this judgment was rendered by the court on its own motion, or on motion of plaintiffs, or of the defendants. For aught that appears on the record Mr. Frock may have induced this judgment to be rendered for the purpose of thereafter availing himself thereof to escape payment of the note. Section 5328 was passed in its present form for the purpose of preventing the possibility of such sharp practice.

The motion in arrest of judgment in this case is based “upon the statements in the pleadings and recordThis is broader than the statute. The court of common pleas in passing upon the motion confined itself to the statements in the pleadings, and very properly overruled the motion, because, upon the pleadings, Mr. Frock was not entitled to judgment in his favor. The circuit court considered the record of the judgment against Mr. Jones, and concluded that the motion in arrest of judgment was well taken, and should have been sustained. In this the circuit court erred.

The judgment of the circuit court will be reversed, and that of the common pleas affirmed.

Judgment accordingly.