Case ID: ohio-st_44/html/0430-01.html
Source: Caselaw Access Project
Author: {"author": "Owen, O. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Meriden Silver Plate Company v. Flory.
    
      Revised Statutes, section 5833 — Notice by surety to holder of note to sue principal — Reasonableness of delay — Solvency of principal — Non-residence of holder.
    
    1. The requirements of section 5833 of the Revised Statutes, providing for notice by a surety to his creditor to commence action forthwith against the principal debtor, are satisfied by substantial compliance; and a notice which is positive in its request to sue, and does not mislead the creditor as to the instrument to be sued upon, is sufficient.
    2. A corporation of the state of Connecticut, holding a matured joint note executed in this state by C. M. Rider, principal, and Flory & Havens, sureties, residents of this state, made demand of payment by mail upon the sureties, who at once returned the following: . . . “Yours of the 12th came to hand. If you hold any note signed by C. M. Rider and ourselves, C. M. Rider is the principal, and we are only sureties, and we notify you to commence an action on the note forthwith, and proceed to collect it. Rider is able to pay his own notes. Yours, Flory & Havens.” Held, the notice was sufficient.
    3. This notice was received on October 17, 1878. The action was commenced January 25, 1879. The delay was unexplained, except by the fact that the plaintiff was a resident of the state of Connecticut. Held, there was no error in finding as a conclusion of law that the action was not commenced within a reasonable time after notice.
    4. The duty of the creditor to proceed within a reasonable time after such notice, is imperative. It is the right of the surety to require that action be brought against the principal and diligently proceeded with; and this right is not qualified or affected by the fact of solvency or insolvency of such principal.
    5. Where the principal and surety are residents within the same jurisdiction, the duty of the creditor to commence an action, as required, is not affected by the fact that he is a resident of another state.
    6. To entitle the surety upon a note to the benefit of section 5833, supra, it is not necessary that the fact of suretyship should appear upon the face of the note.
    Error to the District Court of Licking county.
    June 1, 1878, C. M. Rider, principal, and Plory & Havens, sureties, all residing and being in Licking county, Ohio,' drew their joint note of that date for $326.58 to the order of Meriden Silver Plate Company, a corporation of the state of Connecticut, and doing business therein, due four months after date, and delivered it to the payee. October 14, 1878, the note being unpaid, Plory & Havens received, at Newark, Ohio, a letter of the following tenor:
    “ West Meriden, Conn., Oct. 12, 1878.
    
      “Messrs. Flory ‡ Havens, Newark, Ohio.
    
    “ Gentlemen : — No doubt you are aware that the joint note made in our favor by C. M. Rider and yourselves, due 1-4 inst., was protested for non-payment. Please see that we have N. Y. funds by return mail in settlement of the protested note: $326.58; plus, $1.50; total, $328.08, and much oblige, yours, truly,
    “ The Meriden Silver Plate Co.
    “Robert H. Curtis, Treasurer.”
    Plory & Havens at once wrote and mailed a response of the following tenor:
    “ Newark, Ohio, Oct. 14,1878.
    
      “The Meriden Silver Plate Company, West Meriden, Conn.
    
    “ Yours of the 12th came to hand. If you hold any note signed by C. M. Rider and ourselves, C. M. Rider is the principal and we are only his sureties, and we notify you to commence an action on the note'forthwith, and proceed to collect it. Rider is able to pay his own notes. Yours, respectfully, Plory & Havens.”
    The plaintiff commenced suit on this note in the Licking common pleas court, against all the makers, on January' 23, 1879.
    
      The pleadings are voluminous and the issues below were numerous. There is no bill of exceptions in the record. The trial court, on request of the plaintiff, stated its findings of fact and conclusions of law.
    So far as they involve the questions considered in the opinion they are: “ The court finds as matters of fact . . . that the treasurer of the plaintiff's corporation, Robert II. Curtis, wrote a letter as set out and stated in the plaintiff’s reply to the third defense in the defendant’s answer, and that in reply to the letter .of said Curtis, as such treasurer, the defendants, Elory & Havens, wrote and mailed at Newark, Ohio, the answer dated October 14, 1878, a copy of which is also set out and correctly stated in plaintiff’s reply to the third defense, and which is the notice the defendants, Elory & Havens, claim to have served upon said plaintiffs in said third defense. The court finds that on the issue made concerning the giving of the notice claimed by the defendants that the notice, a copy of which is set out in the reply, as aforesaid, was duly deposited in the post-office at Newark, Ohio, on October 14,1878, duly directed to the plaintiff at West Meriden, in the state of Connecticut.
    “That by due course of mail said notice would reach the plaintiff in thirty-six hours after such deposit in the Newark post-office. That this suit was commenced January 23,1879, and from said evidence the court finds as a matter of fact that the said plaintiff received said notice on or before October 17,1878. That no other notice was sent or given them than as above stated. The court also finds as a matter of fact that since December 25, 1878, the said Rider has beeu, and is insolvent, and has no property subject to levy and sale on execution.
    “And the court finds as matters of law arising upon said facts that said notice was sufficient in law, and under the statute, and that the said plaintiff did not within a reasonable time after said notice was deposited in the post-office at Newark, Ohio, as aforesaid, and received by the plaintiff, as aforesaid, commence action on said note, and have thereby forfeited the right which it would, otherwise have to demand and receive of said Elory & Havens, as such sureties, the amount due thereon.”
    - The letters referred to in these findings are those heretofore set forth in this statement.
    Upon the facts so found, and those admitted by the pleadings, judgment was rendered for the defendants, Elory & Havens.
    This judgment was affirmed on error in the district court. The present proceeding is prosecuted to.reverse the judgment below.
    
      Charles Follett &¡ Son, for plaintiff m error,
    contended-that the letter sent by the defendants to the plaintiff was not a sufficient notice in law to work a forfeiture of their right to enforce payment of the note against the defendants, and that it did not relieve them from payment, inasmuch as no particular note was referred to and no declaration that unless suit was brought they would no longer remain liable, and cited Baker v. Kellogg, 29 Ohio St. 663; Kaufman v. Wilson, 29 Ind. 504; Iliff v. Weymouth, 40 Ohio St. 101.
    The delay in bringing suit was not unreasonable. The plaintiff was a Connecticut corporation, doing busiuess in. that state. That fact must be considered in imputing negligence. Davis v. Hatcher, 10 Am. Law Reg. (N. S.) 519.
    There was nothing in the note to indicate the suretyship of the defendants. Hence they could not avail themselves of the statute. Braudt Suretyship, sec. 503; Payne v. Webster, 19 Ill. 103.
    J. A. Flory, for defendants in error.
    The notice was sufficient. Section 5833, Revised Statutes; Clark v. Osborn, 41 Ohio St. 28; Franklin v. Franklin, 71 Ind. 573; Routen v. Lacy, 17 Mo. 399; Brandt Suretyship, sec. 504; Iliff v. Weymouth, 40 Ohio St. 101.
    The finding of the court below that the delay was unreasonable is conclusive. Ralston v. Kohl, 30 Ohio St. 92.
    The delay was unreasonable. Nash v. Harrington, 16 Am. Dec. 672; Aymar v. Beers, 17 Am. Dec. 538; Swan’s Treatise, 718, 719; Spalding’s Treatise, 475; 3 Kent Com. (12 ed.), 88; Clark v. Osborn, supra.
    
    The sureties were released by the delay. Pain v. Packard, 13 John. 174; s. c., 7 Am. Dec. 369; King v. Baldwin, 17 John. 384; s. c., 8 Am. Dec. 415; Colgrove v. Tallman, 67 N. Y. 99; Bruce v. Edwards, 1 Stew. 11; s. c. 18 Am. Dec. 33; Ide v. Churchill, 14 Ohio St. 386; Hempstead v. Watkins, 6 Ark. 317.
   Owen, O. J.

Three alleged errors are assigned as grounds of reversal of the judgments below.

1. That the facts found by the court did not warrant the conclusion that the letter of Elory & Havens to the plaintiff, dated October 14, 1878, notifying it to commence an action on the note, etc., was received by-the plaintiff October 17, 1878, or at all.

2. That the court erred in finding that such letter was sufficient notice under the statute authorizing notice by surety to the holder of a note to commence action, etc.

3. That, even if the notice was sufficient, the court erred in finding that the plaintiff did not, within a reasonable time, commence action on the note.

I. Assuming that the finding is based solely upon the facts stated by the court, it is evident that it proceeded upon the presumption that the alleged notice reached the plaintiff by due course of mail. We have in the record, however’, a further admitted fact.

The company alleges, in its l’eply to an answer of Flory & Havens, filed in the case, that this letter “ was mailed at Newark, Ohio, on or after the date thereof, October 14, 1878, and in due course of the mail taken from the post-office at West Meriden, in the state of Connecticut, by some one for said plaintiff corporation, but who plaintiff can not state, or when it came to the notice of the officers or directors of said corporation.”

If this letter was taken from the post-office by some one “for the corporation,” this was equivalent to its receipt by the corporation. It was not necessary that such person should have been either an officer or director. If he was a stranger, or had no authority to receive it, there was no warrant for the statement that it was taken from the post-office for the corporation.

There was no error in this finding of the court.

II. Was the notice insufficient in law in that it was conditional ?

Section 5833, Revised Statutes, provides that a surety in such a case may “ require his creditor, by notice in writing, to commence an action on such instrument forthwith, against the principal debtor,” etc. It was held in Baker v. Kellogg, 29 Ohio St. 663, cited and relied on by plaintiff, that the notice under this provision “ must contain an unconditional requirement to commence an action forthwith; and a notice that the surety ‘wishes’ the creditor ‘to proceed against the principal debtor ’ and collect ‘ the.claim or have it arranged in some way,’ and that the surety does ‘ not wish to remain bail any longer,’ is not sufficient.”

The notification in the case at bar -was qualified with no condition. True, the sureties said : “If you hold any note signed by O. M. Rider and ourselves, C. M. Rider is the principal and we are only his sureties,” etc. There was but one note in question. There could have been no doubt at all concerning the note to be put in suit. The plaintiff was then urging its payment by the defendants. But the notice then continues: “And we notify you to commence an action on the note forthwith, and proceed to collect it.” Here was no condition, and there was substantial compliance with the statute. This is sufficient. Clark v. Osborn, 41 Ohio St. 28. The requirement of the notice was unmistakable. There was no error in finding it to be legally sufficient. Technical accuracy is not required. It is sufficient if the notice is positive and the creditor is not misled. Brandt Suretyship, sec. 504; Routen v. Lacy, 17 Mo. 399.

III. Section hSM, supra, further provides that unless the creditor receiving the notice “ commence such action within a reasonable time thereafter, and proceed with due diligence, in the ordinary course of law, t‘o recover judgment against the principal debtor for the money . . . and to make, by execution, the amount thereof, the creditor . . . so failing to comply with the requisition of such surety, shall thereby forfeit the right which he would otherwise have to demand and receive of such surety the amount due thereon.” The notice was received on the 17th of October, 1878. Suit was not commenced until January 23, 1879. The court found, as a conclusion of law, that the plaintiff did not commence action upon the note within a reasonable time after notice. Did the court err in this? We may take judicial notice of the fact that the January term of the court in which the action was brought commenced January 6, 1879. How far this fact entered into the consideration of the trial court, or whether that court considered the length of the next prior term, does not appear. We consider the question in the light of the facts found and stated by the court.

The plaintiff was a Connecticut corporation. It held the note of these parties residing in Ohio. This note being unpaid at maturity, the plaintiff caused it to be protested for non-payment. It then demanded payment of these defendants in error. They at once notified it that they were sureties for the first named maker who was able to pay his own notes, and required that it commence an action on the note forthwith and proceed to collect it. After a lapse of two months and eight days from the notice the principal became insolvent. After the lapse of three months and six days from the notice, action was commenced.

We are asked to say that the court ought to have found, and erred in not finding, that this fully answered the ■'equirement of a statute providing for notice to commence suit forthwith, that such suit be commenced within a reasonable time thereafter, aud with clue diligence proceeded with, etc.

We can not say this. We attach no importance, however, to the question of solvency or insolvency of the principal. The statute is not qualified by such considerations. It is imperative. It leaves no discretion with the creditor. It is the surety’s right to require that action be brought and diligently proceeded with, that a test may be made of the principal’s ability to pay.

The terms “reasonable time” and “due diligence ” are to be construed with, -and in the light of, the term “forthwith” to be used in the notice to commence the action. Reid v. Cox, 5 Blackford, 312; Overturf v. Martin, 2 Ind. 507; Miller v. Childress, 2 Humph. 320; Brandt on Suretyship, sec. 511; Garratt v. Eliff, 4 Humph. 323.

The case of Davis v. Hatcher, 10 Am. Law Reg. (N. S.) 519, described by the United States-'circnit court for southern district of Georgia, is cited as authority for the proposition that “the omission of the creditor to sue a principal residing in another state could not, under any circumstances, as between him and the surety, make him chargeable with gross negligence.” In that case the surety resided in Georgia, while the principal resided in Alabamá. It was simply held that the plaintiff need not go to the latter state to bring action against the principal. In the case at bar the sureties and the principal were all within the same j n risdiction. The plaintiff was compelled to come within that jurisdiction to sue either of them. There is nothing in the principle of the case last cited, nor in the fact that the plaintiff resided in another state, that excused it from obeying the requirement of the statute and of the notice. No hardship was imposed upon the plaintiff which was not contemplated by the statute. The third assignment of error is not well taken. The position, contended for by plaintiff in error, that the statute does not apply to the note in suit for the reason that there was nothing on the face of it to indicate the fact of surety-ship, is untenable. In Baker v. Kellogg, 29 Ohio St. 663, cited supra, where the same defense was interposed by the surety as in the ease at bar, there was nothing on the face of the note to indicate suretyship. It was held that parol evidence was admissible to prove that fact. The surety was discharged. There is no error in tne judgments below.

Judgment affirmed.