Case ID: ohio-app_40/html/0181-01.html
Source: Caselaw Access Project
Author: {"author": "Blosser, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

McClintock-Field Co. et al. v. Wells et al.
    (Decided April 27, 1931.)
    
      Messrs. McLaughlin é Staker and Mr. Wayne L. Elkins, for plaintiffs in error.
    
      Mr. A. R. Johnson and Messrs. Andrews, Edwards é Andreivs, for defendants in error.
   Blosser, J.

In the court of common pleas the McGlintock-Field Company, the Jones, Witter & Co., and Henking, Resner & Co., as plaintiffs, filed their petition against A. O. Wells, Nell G. Wells, Casper Bnrton, I. A. Mearan, Floyd Mittendorf, Louis E. Halley, Frank W. Wieteki and C. A. Goldcamp, as defendants. The plaintiffs claimed a balance on a promissory note for $1,500, signed by A. O. Wells and Nell G. Wells, as makers, and by Casper Burton and the remaining defendants as indorsers. They alleged the maturity of the note, default in payment, due notice and protest.

A. O. Wells and Nell G. Wells, while named in the petition as defendants, were not served with summons, and filed no answer or other pleading in the case. The indorsers filed an answer setting up a first defense in which they admit the indorsement of the note sued upon, and then deny all the other allegations of .the petition. As a second defense they aver that there was no consideration for the indorsement of the note. In a third defense and the amendment thereto they allege that they indorsed the note as accommodation indorsers solely and only on behalf of the defendants Nell G. Wells and A. 0., Wells, and that without the assent, knowledge or acquiescence of these defendants the plaintiffs for a consideration named agreed with Mr. and Mrs. Wells to extend the time of payment of said note. These indorsers ask that the agreement with reference to said extension of time, which it is claimed was reduced to writing-, be reformed so as to express the real agreement of the parties. As a fourth defense the defendant indorsers claim that Nell G. Wells made certain false, untrue and fraudulent representations in order to procure their signatures on the note, and that said false and fraudulent representations were unknown to them at the time.

To the answer setting forth the defenses of the defendants, the plaintiffs filed a reply denying the new matter alleged in the' answer.

The case was tried to a jury and resulted in a judgment in favor of the defendant indorsers, and the plaintiffs prosecute error.

During the progress of the trial a paper writing was offered in evidence which it was claimed stated an agreement between the McClintock-Field Company and Nell G-. Wells for an extension of time for the payment of the note sued upon. It was claimed by the defendant indorsers that the written agreement produced in court was not the true agreement between the parties, but that through inadvertence or error in reducing the same to writing a mistake was made in its terms. Thereupon leave was granted to the defendant indorsers to file, and they did file, an amendment to the third defense of their answer, -in which they alleged the mistake referred to, evidently for the purpose of seeking a reformation of the written agreement, although no such relief is prayed for in the pleading. Parol evidence was introduced on this issue showing the conversation between the parties and all the circumstances and conditions surrounding the transaction. The court submitted the question of reformation to the jury. The introduction of this parol evidence and the action of the court with reference to reformation is urged as error.

The plaintiffs were not prejudiced by the action of the court in the particulars mentioned. The indorsers were entitled to introduce evidence of the extension of time by the McClintock-Field Company, and all the circumstances surrounding the transaction in reference to the extension of time, regardless of the written agreement or its reformation. The action was brought by the three plaintiff corporations, and in order to maintain the action it was necessary for all of them to join as plaintiffs. The interests of the plaintiffs were joint, and no one of the plaintiffs could maintain the action at law without joining the others as plaintiffs. Boyd v. Steamboat Falcon, 1 Handy, 362, 368; Dewey v. Carey, 60 Mo., 224; Ryan v. Riddle, 78 Mo., 521; Andrews v. Mokelumne Hill Co., 7 Cal., 330. And so, by the same process of reasoning, while one joint promisee of a promissory note cannot maintain an action at law on the note without joining the other payees as plaintiffs, yet there is no reason why he cannot make a valid agreement to forbear bringing suit, or, in other words, to extend the time of payment without the consent of the other payees, and if he does so without the consent of the indorsers, the indorsers are discharged in a suit at law. 50 Corpus Juris, 135; Clark v. Patton, 4 J. J. Marsh. (27 Ky.), 33, 20 Am. Dec., 203; Warburton v. Ralph, 9 Wash., 537, 38 P., 140.

The rights of the parties may be worked out in a proceeding in equity. Upjohn v. Ewing, 2 Ohio St., 13; Ide v. Churchill, 14 Ohio St., 372.

In view of the fact that the indorsers were entitled to show all the facts and circumstances surrounding the agreement between McClintock-Field Company and Nell Gr. Wells, the matter of the reformation of the paper writing became a moot question, because the indorsers were entitled to introduce this evidence in any event.

Error is alleged to have been committed by the court in its charge to the jury. The court gave defendants’ charge No. 1 as follows:

“If the endorsers, Doctor Burton and others, were not in any wise benefited by endorsing their names upon this note, and if the plaintiffs had no legal claim to lose for which the endorsement was made, then in that event I charge you there is no consideration for the endorsing of said note.”

This charge is erroneous because it does- not take into consideration any benefit which the indorsement may have been to Mr. or Mrs. Wells. Neither is it necessary for the promisee to give up a legal claim in order to lay the foundation for consideration. It may have been something other than a legal claim.

Under the issues made in the pleadings and the evidence, the case largely revolved about the question of the alleged false representation made by Nell G-. Wells to the indorsers in order to obtain their signatures upon the note. In the general charge the court said:

“I charge you that in a case where the creditors exact of the principal debtor before taking a note or other evidence of indebtedness, that he must furnish security or endorsers on said note, that the principal debtor is in reality acting as agent of the creditors and that the creditors in such case have so authorized him; but there is fraud or misrepresentation of the principal debtor unless the endorsers had knowledge thereof or acquiesced therein.”

The statement that the principal was acting as the agent of the creditors, under the circumstances stated, is not correct, and is erroneous. A creditor who demands sureties or indorsers on a note he is about to take from a debtor does not necessarily, and does not ordinarily, stand in the relation of principal to the debtor. Usually their relations are adverse.

“A creditor demands security of Ms debtor, who, to obtain it, makes fraudulent representations to the ♦one who becomes surety. The creditor is ignorant-of these representations, and innocent as regards the debtor’s conduct. No such relation of agency exists as will make the creditor responsible for the debtor’s acts.” Kingsland, Hook & Co. v. Pryor, 33 Ohio St., 19. See, also, Farmers’ & Traders’ Bank v. Lucas, 26 Ohio St., 385.

Under the issues in this case and the evidence presented, the view of constructive 'agency wMch the court adopted in the above charge was particularly prejudicial to the plaintiffs. The other parts of the general charge do not cure the error in this regard.

The defendants offered in evidence their Exhibit 3, which was purported to have been written by Henking, Resner & Co., commenting on the extension of time on the note. This exhibit was not properly identified, and its authenticity not proven.

Several other errors are complained of, but we do not think they alone would be sufficient to justify a reversal were it not for the errors already referred to.

Because of the errors pointed out the judgment is reversed and the case remanded to the court of common pleas for further proceedings according to law.

Judgment reversed and cause remanded.

Mauck:, P. J., and Middleton, J., concur.