Beach v. Bello, 7728.

• Citation: 193 A. 526
• Decision Date: 20 July 1937
• Docket Number: No. 7728.,7728.
• Parties: BEACH v. BELLO et al.
• Court: Rhode Island Supreme Court

193 A. 526

BEACH

v. BELLO et al.

No. 7728.

Supreme Court of Rhode Island.

July 20, 1937.

Exceptions from Superior Court, Providence and Bristol Counties; Leonidas Pouliot, Jr., Judge.

Action of assumpsit by Minnie F. Beach against Anthony Bello and another, who were sued as joint makers of a promissory note. A verdict was directed for plaintiff, and defendants bring exceptions.

Exceptions passed upon sustained and case remitted for new trial.

John A. Tillinghast, of Providence, for plaintiff. Francis A. Manzi, of Providence, for defendant Paolantonio.

BAKER, Justice.

This is an action of assumpsit on a promissory note against two defendants who are sued as joint makers. In the superior court, the trial justice, at the conclusion of the evidence, directed the jury to return a verdict for the plaintiff against both defendants for $2,626.88, the amount claimed to be due on the note. To this action, to rulings made during the trial excluding evidence, and to the refusal of the trial justice to permit the filing of a certain plea, the defendant Paolantonio has prosecuted his bill of exceptions to this court.

All these exceptions involve substantially the same question. It appears from the evidence that the defendants borrowed $4,000 from the plaintiff and executed the note sued on, secured by a mortgage, signed by them and their respective wives, on real estate in Providence. All payments of interest on the note were made by the defendant Bello and all notices were sent to him. The plaintiff claims that this was done by reason of instructions given her by the defendant Paolantonio at the time the original transaction was consummated, but this is denied by the latter. After some years there was a default in the payment of interest, and the plaintiff foreclosed her mortgage, receiving $1,550 from the sale of the mortgaged property, which was purchased by a third person. Previously the sum of $200 had been paid by Bello on the principal of the mortgage, and the amount recovered in the case at bar is the balance due on the face of the note, together with interest and expenses of foreclosure.

The defendant Paolantonio contends in substance that, although he signed the note as maker, he was actually only surety for Bello, and that by reason of an alleged conversation between the plaintiff and himself, followed by certain conduct on his part, the plaintiff is now estopped to hold him on the note. To support this claim, the defendant Paolantonio testified that shortly after the maturity of the note, and before any default thereon, he had an interview with the plaintiff concerning the mortgaged property, telling her that he was going to sell his interest therein to Bello, and that following this talk he carried out his intent as expressed. From the affidavit of defense filed in the case by Paolantonio, it appears that he took back from Bello a mortgage of $1,500 when this transaction went through. The defendant Paolantonio, however, was not permitted to relate the details of this alleged conversation with the plaintiff, and the exclusion of this evidence by the trial justice forms the basis of several of defendant Paolantonio's exceptions.

The plaintiff denied that any such interview ever took place.

During the trial, Paolantonio asked permission of the trial justice to be allowed to file a plea of estoppel based on his claim that the plaintiff had orally agreed with him in substance that in consideration of his conveying his interest in the mortgaged property to Bello and his refraining, while the plaintiff's mortgage was outstanding, from demanding any payment on the principal of the mortgage note to be given him in return by Bello, the plaintiff would release him (Paolantonio) from any further obligation on the note now in suit and look only to the defendant Bello for payment thereof, and that, in pursuance of this understanding with the plaintiff, he made the conveyance to Bello. This suggested plea of estoppel indicates in substance the proof which the defendant Paolantonio desired to offer through the evidence which was excluded. The trial justice refused to let the defendant Paolantonio file such a plea, and this ruling was excepted to by the latter.

The plaintiff's contention, which was accepted by the trial justice, is that the situation presented by the record herein is governed by the provisions of section 128, c. 227, Gen.Laws 1923, which is as follows: "The holder may expressly renounce his rights against any party to the instrument before, at, or after its maturity. An absolute and unconditional renunciation of his rights against the principal debtor made at or after the maturity of the instrument discharges the instrument. But a renunciation does not affect the rights of a holder in due course without notice. A renunciation must be in writing, unless the instrument is delivered up to the person primarily liable thereon."

This is a portion of the Negotiable Instruments Law so-called, which has been adopted in many jurisdictions in the interest of uniformity in disposing of questions relating to negotiable paper. The first sentence of the above section provides that the holder of the note may renounce his rights against any party to the instrument. The defendant Paolantonio is unquestionably a party in some form to the note now before us, and, in view of the broad language used in the sentence referred to, it would seem unimportant, as far as the applicability of the section is concerned, whether he was a joint maker or a surety. The latter portion of the above section then provides that, unless the instrument be delivered to the person primarily liable thereon, the renunciation must be in writing. In the instant case, the evidence shows that the plaintiff still has possession of the note in question, and the defendant Paolantonio's testimony reveals that the alleged release or...