Buckeye Commercial Sav. Bank v. Protogere, 63.

• Decision Date: 02 June 1930
• Docket Number: No. 63.,63.
• Citation: 250 Mich. 652,231 N.W. 65
• Parties: BUCKEYE COMMERCIAL SAV. BANK v. PROTOGERE.
• Court: Michigan Supreme Court

250 Mich. 652

231 N.W. 65

BUCKEYE COMMERCIAL SAV. BANK

v.PROTOGERE.

No. 63.

Supreme Court of Michigan.

June 2, 1930.

Error to Circuit Court, Dickinson County; Frank A. Bell, Judge.

Action by the Buckeye Commercial Savings Bank against Apostle Protogere. Judgment for defendant, and plaintiff brings error.

Reversed and remanded, with directions.

Argued before the Entire Bench.

Glenn W. Jackson, of Gladstone, for appellant.

Symonds & Rahm, of Iron Mountain, for appellee.

FEAD, J.

On February 18, 1923, defendant and his partner, Gust Rouppas, then doing business at Findlay, Ohio, executed a joint and several promissory note for $1,500 to plaintiff, payable on demand at plaintiff bank in Findlay. It was in renewal of a previous similar note given for part purchase price of fixtures bought by the partnership from plaintiff's predecessor. In March, 1923, the partnership was dissolved, Rouppas taking over the property, agreeing to pay the debts, and giving defendant notes for $900, which the latter left at plaintiff bank and which were afterward collected by it and the proceeds remitted to him. Defendant testified that he took a copy of the bill of sale to plaintiff bank, notified its cashier of the dissolution of the partnership, suggested that the bank obtain security from Rouppas for the $1,500 and also for his own notes, and was told by the cashier that he need not worry, that the bank would look to Rouppas to pay the note. Plaintiff's officers denied the conversation. At all events, defendant came to Michigan and thereafter received no communication whatever regarding the note until about August, 1927, when payment was demanded of him. During the intervening years the plaintiff had collected interest from Rouppas on the note from time to time as it became due and had loaned him other money, but the note remained in its original form, no renewals having been substituted for it and no security ever having run with it. In 1927, and before demand for payment had been made on defendant, Rouppas had become a bankrupt, plaintiff had filed the note as a claim against his estate and had received dividends on it. Both parties moved for directed verdict. The motions were reserved under the Empson Act (Pub. Acts 1915, No. 217). Defendant had verdict and judgment. Plaintiff's motions non obstante and for a new trial were denied.

Defendant's contention is that, upon dissolution of the partnership, his status on the note changed from that of maker to that of surety, and he was discharged by: (1) Plaintiff's granting Rouppas extensions of time for payment without defendant's consent; (b) parol release; (c) failure of the bank to make demand for payment within a reasonable time and to notify him of nonpayment; (d) plaintiff's filing the note as a claim against Rouppas in bankruptcy.

The note being an Ohio contract, liability on it is governed by the law of that state. The Negotiable Instruments Law is in force in Ohio, but, for convenience, reference to it will be made by citation from our own statute. Comp. Laws 1915, § 6040 et seq.

Assuming, upon the verdict of the jury, that by reason of his conversation with the cashier of plaintiff the status of defendant upon the note became that of surety, Rawson v. Taylor, 30 Ohio St. 389,27 Am. Rep. 464, what was the effect upon his liability?

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