Court Opinion

ID: 8512350
Source: CourtListenerOpinion
Date Created: 2022-11-23 08:41:56.824764+00
Date Added: 2024-06-11T16:51:09.809097
License: Public Domain

MARX, J.
Epitomized Opinion
Published Only in Ohio Law Abstract
These actions were started in the Superior Court of Cincinnati by Armentrout to recover judgments on three notes against the Can-Bit Coal Co. and others. The plaintiff was president of the coal company. He agreed to supply money to the company as working capital provided the company would give him its notes and the individual defendants, officers of the company, would endorse the same. This was done. When the notes became due plaintiff sued upon them. Default judgment was rendered against the Coal Co. but two of the indorsers contested the same.
The issues of fact involved were: (1) w!as there any parol agreement varying the liability of the endorser? (2) Was evidence of such parol agreement admissible to vary the liability of the indorsers? (3)Were the in-dorsers released by the alleged failures to make proper demand, presentments and give notice of dishonor? The defendants maintained that there was an oral understanding to the effect that they were only liable in proportion to their stock interests and that the plaintiff was bound to contribute to the payments of the notes in proportion to his stock interests. In finding for the plaintiff, the Court held:
1. That the evidence was convincing that there was no parol understanding that the liability of each member of the corporation on these notes would be prorated according to his stock holdings.
2. The indorsement in blank of a negotiable instrument constitutes a written contract, which by reason of the Negotiable Instrument Law, is as clear, definite and certain as if the terms were written above the indorsement and such contract cannot be varied, altered or contradicted by parol evidence.
3. The waiver of presentment and notice of protest of a promissory note is affected under the Negotiable Instruments Law of this State, which provides that presentment for payment may be dispensed with by waiver, express or implied, where the indorsers are officers of the corporation who had knowledge at the maturity of the note and knew that there were no funds with which to pay it, and informed the holder of that fact.