Case Name: Alfred Kelley v. Thomas Few
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1849-12
Citations: 18 Ohio 441
Docket Number: 
Parties: Alfred Kelley v. Thomas Few.
Judges: 
Reporter: Cases decided in the supreme court of ohio : upon the circuit at the special sessions in Columbus
Volume: 18
Pages: 441–443

Head Matter:
Alfred Kelley v. Thomas Few.
'Where the payee of a bill of exchange brings a suit against the two drawers, one of whom is served with process, the writ as to the other being returned “ not found,” the defendant at the trial may give parol evidence to show that he and the plaintiff, by a prior agreement between themselves, Were, when they severally drew and indorsed the bill, joint securities for the accommodation of the other drawer, and by such proof defeat the action, if he has paid, upon the bill an amount equal to that paid by the plaintiff.
This is a writ of error to the Supreme Court for Muskingum county.
The action before the court of common pleas was assumpsit, on a bill of exchange, which had been drawn by the defendant Kelley and Edmund H. Rix, made payable to Eew, the plaintiff.
The plea of the defendant was the general issue non-assumpsit, to which was attached a notice setting out that the bill was drawn for the sole benefit of Rix; that Rix procured the signatures of Eew and Kelley to the bill for the purpose of securing payment of the same; that the drawer and payee were, and so understood it, at the time when the bill was drawn, joint securities thereon ; that .the bill was to be and was discounted with such understanding of the parties, and the money paid tor the use of Rix; that Eew, well knowing the conditions of the bill,' afterwards when it was protested for non-payment, united with Kelley in giving a judgment note for the amount due on the bill, to Horatio N. Kearney, the holder thereof. Kelley became the drawer and Few the indorser of the bill, as appears by the bill of exceptions, at the instance of Rix and for his accommodation. Rix applied to Kearney to discount the bill for his sole benefit, and received himself the whole of the proceeds. It was the understanding of Eew and Kelley when the bill was drawn and indorsed, that they were joint securities for the ac commodation of Rix, though there was no written evidence of such understanding at that time, other than the bill itself. Upon' this evidence, the court of common pleas gave judgment for the defendant, and the supreme court reversed, that judgment. The present writ of error is prosecuted to reverse the judgment, of the supreme court.
O. W. Searle, and D. Peek, for plaintiff in error.
A. Harper, and O. O. Qonvers, for defendant.

Opinion:
Avert, J.
The supreme court upon the circuit looked' upon the contract of the drawer and indorser of a bill of exchange as settled by the mercantile law, and as taking a. definite form, and bearing obligatory upon each party at the time of putting his name upon the. instrument. They applied to the case the rule, that parol evidence is inadmissible to control or alter such contract; and th.at a private agreement or understanding is at an end when the contract between the parties is reduced to writing. At an early day, by a decision-made in this court, in the case of Douglass v. Waddle, 1 Ohio Rep. 413, a principle was sanctioned which changed the commercial rule as to accomodation notes; and held, that the parties putting their names upon such paper, for the ben efit of the person obtaining the money, were joint securities-only, and could recover from each other only upon the principles applicable to that relation. But upon a more recent occasion, in the case of Williams v. Bosson & Brother, 11 Ohio Rep. 62, the court refused to extend the rule to another species of commercial paper; and then decided, that as to bills of exchange, the indorsers are not joint securities, but are separately liable in the order of their becoming parties upon the instrument. It is not intended to question the authority of this last decision. The payee of a bill of exchange has doubtless shown a case for recovery, against the drawer, when he has given proof of the drawing of the bill, the presentment at maturity for payment, the non-payment and notice to the-drawer. But will the defendant be considered as attempting, by the introduction of parol evidence, to change the terms of a written contract, or a contract implied by the law, when he-sets up a prior verbal agreement between the parties to become-joint sureties upon the bill, and offers to show that their names' were put upon the bill according to such agreement? The court has decided at the present term, in the case of The Ohio Life Insurance and Trust Company v. Thomas McCague, that the act for the relief of sureties and bail in certain cases, will be construed to 'extend to the parties to a bill of exchange, and that the holder, on receiving from a surety whose name is on the bill, the notice prescribed by the statute, must proceed against the principal, or he will forfeit his rights against the surety. For such a purpose, parol evidence is admitted, to-prove who is principal and who is security. So in the present case, as between the parties themselves to an arrangement,, parol proof may be given that they agreed to become joint securities for another, and by means of a bill of exchange, to raise money for his use. And if by such means the money is procured, the parties in a subsequent suit between themselves,, touching the same matter, may sét up the agreement, in whatever shape their names may appear upon the bill. If the maker of a note, without receiving a consideration, deliver it to the payee, to enable him to borrow money for his own use, he can, without doubt, set up that fact as a defense, when afterwards sued on the note by the payee. The defendant and-plaintiff having agreed as joint securities, by means of a bill of exchange, to enable Rix to borrow money, are bound as between themselves to divide the loss occasioned by the failure of the principal, and the defendant, having paid his half of the loss, is no further liable, although his name appears upon the bill as drawer, while that of the plaintiff is on the bill only as indorser. The supreme court of Muskingum county having decided otherwise, their judgment is reversed.