Douglas v. Rumelin

• Decision Date: 13 March 1928
• Citation: 125 Or. 261,264 P. 852
• Parties: DOUGLAS v. RUMELIN ET AL.
• Court: Oregon Supreme Court

264 P. 852

125 Or. 261

DOUGLAS v. RUMELIN ET AL.

Supreme Court of Oregon

March 13, 1928

Department 1.

Appeal from Circuit Court, Multnomah County; Robert G. Morrow Judge.

Action by James A. Douglas against C. E. Rumelin and M. A. M Ashley, copartners conducting their business under the firm name of Ashley & Rumelin. From a judgment for defendant Ashley, plaintiff appeals. Reversed and remanded.

This is an appeal from the judgment in favor of defendant Ashley based on a directed verdict in his favor. The action was based upon an ordinary promissory note, upon the back of which was written the following:

"For value received, we hereby guarantee the payment of the within note and waive protest, demand, and notice of nonpayment thereof. Ashley & Rumelin, by C. E Rumelin."

The presiding judge construed the writing on the back of the note to be a collateral contract to guarantee the payment of the note. He stated:

"This action is not brought on this undertaking but is brought on the note itself. I have become convinced, after very extended argument, that Ashley & Rumelin were not indorsers, as we say in the general business world. The indorsement that appears on the back of this note is not a commercial indorsement by the firm of Ashley & Rumelin; it is a guaranty contract, and they are not sued on that contract; they are sued on the note, sued as indorsers. * * * I must hold that the indorsement is one of guaranty, and as they are not sued on the guaranty, of course they cannot be held. There is nothing for the jury to consider. * * *"

The charging part of the allegation is that:

"Defendants executed and delivered to plaintiff a certain promissory note payable one year after date of the following tenor, to wit: [Then follows the note in full.]"

In order to dispose of the case it is only necessary to consider the order of the judge presiding at the trial directing the verdict.

MacCormac Snow, of Portland (Franklin F. Korell and Wm. A. Carter, both of Portland, on the brief), for appellant.

H. G Platt, of Portland (Platt, Platt, Fales & Smith and George Black, Jr., all of Portland, on the brief), for respondents.

COSHOW, J. (after stating the facts as above).

This court has determined that a writing on the back of a note, of the tenor involved in the instant case, constitutes an indorsement with additional liability and is not a collateral contract to guarantee the payment of the note only. Cady v. Bay...