Graziani v. Hall &c.
(Filed March 13, 1902 – Not to be reported.)
Bills
and notes – Where two sureties took up the note of their principal and executed
their own, they became joint principals, and either of them could have
maintained an action against the principal for the amount paid for him on the
note. Their relation to the bank and to each other was that of joint
principals, and in a suit by either against the other upon the note it was not
necessary for him to allege or prove the insolvency of the original maker.
H.D Gregory for appellant.
W.C. Hall for appellees.
Appeal from Kenton Circuit Court.
Opinion of the court by Judge Burnam
In 1895 the appellant,
B.F. Graziani, and the appellees, W.C. Hall and John A. Hall, purchased a tract
of about thirty acres of land near
Covington for the purpose of plating into streets and lots and selling; and to
facilitate the business of the South Dinmore Park Land Co. was organized and
the major part of the land conveyed to it. It was deemed advisable to secure
the services of an active young German to act as secretary and assist in the
sale of the stock and property of the company, and with this view F.W. Schmitz
was employed. To enable him to purchase stock in the company the appellant and
appellees signed his note for $1,300 as joint securities to the Farmers and
Traders Natoinal Bank of Covington, which sum was paid by Schimtz(sic) to the
appellant and appellees for thirteen shares of stock in the company. Schmitz
was thereupon elected secretary and a director of the company. He subsequently
sold five shares of the stock for $500 to William Reidlin, and applied the
purchase money to his note to the bank, reducing it to $800. On the 25th
of September, 1895, the directors of the company adopted the following
resolution: “The South Dinmore Park Land Co. will convey to any stock holder
land in its subdivision at a price to be agreed upon by such stockholder and
the directors of the company to the extent of
money actually paid by such stockholder as assessed on stock, provided
said stockholder would erect a house upon the lot, costing not less than $900.
The conveyance of the land was not to be made until the house was under roof,
and the price of the land was to be charged to the stockholder and bear
interest at 6 per cent. From the day of conveyance, and the stockholder thus
taking land should not further participate in the profit of the company until
all other stockholders had dividends from the company that made them equal to
the stockholders taking land.”
Pursuant
to this resolution, Schmitz purchased from the company four lots and erected a
dwelling house thereon, at a cost of about $2,600. The appellant, Graziani,
became bound for this money, and subsequently was compelled to pay it, and in
June, 1896, he and Schmitz entered into an agreement by which Graziani was subsitituted
in place of Schmitz as the purchaser of the lots, and their price was charged
to him, credited back to Schmitz, and the land company convyed the lots to
appellant by general warranty deed, and Schmitz’s connection with the land
company ceased. Appellant and appellees after this transaction paid off the
note of Schmitz to the bank by the execution of their joint obligation to the
bank for the balance due thereon. This note was renewed by them several times
prior to the 9th day of June, 1889, when upon the demand of the bank
appellant paid the full amount of the note, $900.
He
tehreupon instituted this suit, in which he alleged that John A. Hall was
insolvent and asked a personal judgement against the appellee, W.C. Hall, for
$450, one-half of the amount paid by him to the bank. W.C. Hall answered,
admitting the execution of the ntoe, but alleged by way of defense that at the
time of the execution of the original obligation by Schmitz, on which he and
appellant were bound as co securities, that it was agreed by appellant, who was
president of the copmany, that he would not permit the isual to Schmitz of his
stock, but would hold it as a security or the amount of his note; and he
further agreed that no deed should be made to Schmitz for the lots selected by
him until he had paid off his note to the bank; and that appellant had also
agreed that he would see that all moneys due from the company to Schmitz for
services as secretary were applied to the payment of the note. The affirmative
averments of the answer were denied by reply, and a jury trial resulted in a
verdict for appellant. Thereupon the defendant filed a motion for a judgement
notwithstanding the verdict. On the next day, before this motion was passed
upon, they filed grounds and entered motion for a new trial. The trial court
sustained the motion for judgement non obstanti verdicto, and dismissed the
petition. The motion for a new trial was not acted on at all. In brief of
counsel it is said that this action of the trial court was based upon the
theory that this was an action for contribution by one co-security against
another, and that in the absense of allegation and proof of the insolvency of
the joint principal appellee was entiteled to a nonsuit. We think that the
trial judge proceeded upon an entirely erroneous theory. When appellant and the
appellees took up the note of Schmitz and executed their own, they become joint
principals, and either of them at that time could have maintained a suit
against Schmitz for the amount paid for him on the note. Their relations to the
bank and to each other, after the execution of their obligation, was that of
joint principlas and not securites, and in a suit by appellant upon the note,
it was unnecessary for him either to have alleged or proved the involvency of
the orginial maker. The execution of the note itself was an implied admission
of this fact. We are, therefore, of the the opinion that the trial judge erred
in sustaining the motino for a judgement nonwithstanding the verdict.
And
for this reason the judgement is reversed and cause remanded for further
proceedings consistent with this opinion.
The Kentucky Law Reporter, Volume 23
Retrieved from http://books.google.com/books?id=a3AsAQAAMAAJ&lpg=PA2352&ots=pwhRxv5b7X&dq=South%20Dinmore%20Park%20Land%20Company&pg=PA2349#v=onepage&q&f=false
Page 2351-2353
Thinking the four lots and "dwelling" is a mention of my home on Earle Ave. It was built around 1896/97, sits on four lots, and the deed is under Mr. Graziani's name. Going to see if I can find out more about F.W. Schmitz.
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