Eberhart v. Eyre-Shoemaker, Incorporated

• Decision Date: 17 February 1922
• Docket Number: 11,100
• Citation: 134 N.E. 227,78 Ind.App. 658
• Parties: EBERHART ET AL. v. EYRE-SHOEMAKER, INCORPORATED, ET AL
• Court: Indiana Appellate Court

134 N.E. 227

78 Ind.App. 658

EBERHART ET AL. v. EYRE-SHOEMAKER, INCORPORATED, ET AL

No. 11,100

Court of Appeals of Indiana

February 17, 1922

Rehearing denied May 12, 1922.

Transfer denied November 17, 1922.

From Grant Circuit Court; J. F. Charles, Judge.

Action by George E. Eberhart and another, partners, against Eyre-Shoemaker, Incorporated, and others, wherein one Ross intervened. From a judgment for defendants, the intervener appeals.

Affirmed.

G. E Ross and Gus S. Condo, for appellant.

Fred H. Bowers, Milo N. Feightner and Lee M. Bowers, for appellees.

OPINION

NICHOLS, J.

This action was originally instituted in September, 1917, in the Huntington Circuit Court, by Eberhart and Kenner, partners, against appellee Eyre-Shoemaker, Incorporated, under the law of the State of Delaware and with its home office in Philadelphia, Pennsylvania, and T. L. Eyre, a resident of the State of Pennsylvania, and the Chicago and Erie Railroad Company upon an account and in attachment and garnishment, with necessary affidavit and undertaking filed and approved. A summons and writ of attachment was issued and served, and answer of the garnishee railroad company filed. Afterwards, to wit, October 25, 1917, the said appellee Eyre-Shoemaker Company and Eyre filed their restitution bond, by which they bound themselves to the plaintiffs in the sum of $ 5,000, conditioned that said appellees would appear and perform the judgment of the court, which bond was approved by the court, and the court thereupon ordered that the railroad company be released and discharged as garnishee. In mentioning appellees hereinafter, we do not include such railroad company. On June 6, 1918, appellant Ross, hereinafter mentioned as appellant, filed herein and under the original action, his complaint on a bond or obligation executed by appellee Eyre-Shoemaker, Incorporated, payable to bearer, and which it was alleged appellee assumed and undertook to pay, which complaint was duly verified in attachment and garnishment; June 15, 1918, appellant filed four additional paragraphs of complaint upon four additional bonds or obligations executed by said appellee Eyre-Shoemaker, Incorporated, and alleged to have been assumed by said appellee Eyre.

On September 26, 1919, appellees, after withdrawing their demurrers theretofore filed to appellant's paragraphs of complaint filed a plea in abatement involving the question of the right of appellant to file under after the filing and approval of the restitution bond, and the discharge of the garnishee, which plea, on motion of appellant, was stricken out, to which ruling of the court appellees excepted. Appellees have forcefully discussed this question, but, as they have failed to assign cross-error, it cannot be considered. White v. Allen (1857), 9 Ind. 561; Merchants' Natl. Bank v. Delaware School Tp. (1916), 185 Ind. 658, 114 N.E. 450; United States Express Co. v. Joyce (1904), 36 Ind.App. 1, 69 N.E. 1015; State v. Wabash Paper Co. (1897), 21 Ind.App. 167, 48 N.E. 653, 51 N.E. 949.

January 17, 1919, the venue was changed to the Grant Circuit Court. Appellees each answered in several paragraphs, denying the claim of appellant, and also setting up, with other averments, that appellant had no bona fide title to the bonds on which he has sued; that he had acquired possession of the same through a fraudulent agreement with the First National Bank of Logansport, and had brought this suit against the appellees after the First National Bank had been fully paid the sum of money, which said bonds had been deposited to secure as collateral, and that there was a fraudulent agreement and arrangement between said appellant and said bank to place said bonds into the hands of appellant so that he might proceed against appellees and thereby seek to recover from them more than the bank itself could recover or was lawfully entitled to recover; that appellant was not in fact a good-faith purchaser for value of said bonds, and had full knowledge of all the facts and of the fraudulent purpose of said First National Bank.

Appellant presents error of the court in overruling his demurrer to appellee company's fourth paragraph of answer. This paragraph is, in substance, so far as here involved, that the said bonds were on April 2, 1908, loaned to said Hoopes, who then and there deposited them, and each of them, with said bank at Logansport, Indiana, as collateral security for a $ 2,000 note as hereinafter mentioned, and at a time when by their terms they were each and all past due. Said Hoopes had theretofore secured a $ 2,000 loan from said bank, for which he had given his note for sixty days, which note was discounted for said time, and at the end thereof the bank required Hoopes to pay off said note, and to obtain a new loan for that purpose, and that said Hoopes executed to the bank a new note, without notice to or knowledge of appellee company and without its consent so to do which said new note was discounted and the interest thereon paid in advance, and at the end of each sixty days thereafter until August, 1910, a new obligation was executed by said Hoopes to said bank without notice to or knowledge of appellee company, during all of which time the bonds aforesaid were in the possession of the bank, and no demand was made upon appellee company for the payment thereof, and no notice was given to the appellee company of the renewed obligation which the bank pretended to hold against appellee company. In December, 1912, said bank made a pretended sale of said bonds to appellant who gave no notice to appellee company that he was making any claim on said bonds until in June 6, 1918, at which time he brought the suit herein on such bonds.

Appellees are right in their contention that one who furnishes collateral as an accommodation to secure the loan of another stands in the relation of surety to the one accommodated. Lacy v. Lofton (1866), 26 Ind. 324; Goodwin v. Massachusetts, etc., Co. (1889), 152 Mass. 189, 25 N.E. 100. It is also the law that the extension of time of payment or the execution of a renewal note may release the surety. 3 R. C. L. 1275. But the security in this case is collateral, and there is no averment in the answer that the bank had any notice or knowledge that such collateral had been loaned to Hoopes, and that it did not belong to...