Farwell v. Ensign

• Decision Date: 07 July 1887
• Court: Michigan Supreme Court
• Parties: FARWELL and another v. ENSIGN and another.

33 N.W. 734

66 Mich. 600

FARWELL and another v. ENSIGN and another.

Supreme Court of Michigan

July 7, 1887

Appeal from superior court of Detroit.

Moore &amp Canfield, for plaintiffs.

Wm. J Gray, for defendants.

CHAMPLIN J.

This case comes before us upon a written finding of facts and conclusions of law made by the judge of the superior court and bill of exceptions. The findings of fact and of law are as follows:

"(1) The defendant the Excelsior Electric Company is a corporation organized under the laws of the state of Michigan, and in October, 1883, its capital stock was divided into 4,000 shares, of which 1,000 shares were owned by plaintiff Farwell, 1,600 shares by plaintiff Field, 400 shares by one Van Vliet, 400 shares each by defendants Beniteau and Ensign, and 200 shares by various parties. Said Van Vliet sold his interest in January, 1884; and said Farwell on or about February 15, 1884, sold all his stock and interest in said company to said Beniteau; otherwise the holdings of stock were substantially the same on May 21, 1884.

"(2) On October 23, 1883, said company executed a note in the following form:

" '$1,200. October 23, 1883.

" 'Sixty days after date we promise to pay to the order of Moses W. Field, Treas., twelve hundred dollars, at the Mechanics' Bank of Detroit, value received, with interest after date. EXCELSIOR ELECTRIC CO.

" 'By MOSES W. FIELD, Treas.'

"This note was, at the same time, indorsed by Field, treasurer, and then, for the accommodation of the company, in order by said Beniteau, Ensign, Van Vliet, Field, and Farwell, and was discounted by the company, and the proceeds credited to the company's account at the bank.

"(3) On December 15, 1884, the company executed a similar note for eight hundred dollars, which at the same time was indorsed for the accommodation of the company by the same persons, in the same order. This note was similarly discounted, and its proceeds credited to the company's account.

"(4) At the time when said two notes were so executed and indorsed said Beniteau, Ensign, Field, Farwell, and Van Vliet orally agreed that they should, as between themselves, be jointly liable each for one-fifth of said notes; but there was no written memorandum or agreement to that effect signed by the parties. There was no consideration received by any of said parties for their indorsement, but the indorsements were purely for the accommodation of the company.

"(5) Said $1,200 note was renewed December 24, 1883, and the renewal was indorsed in the same manner and order as the original note, which was then taken up, and the renewal note substituted.

"(6) Said $1,200 renewal note and said $800 were renewed by a consolidated note for $2,000, dated February 18, 1884, which consolidated note was indorsed in the same manner and order as the original notes, excepting that said Van Vliet did not indorse; and said $800 note and said $1,200 renewal note were then taken up, and the consolidated note substituted.

"(7) Said $2,000 note was renewed May 21, 1884, by note in suit, a copy of which is as follows:

" '$2,000. DETROIT, May 21, 1884.

" 'Three months after date we promise to pay to the order of Moses W. Field, Treas., two thousand dollars, at the Mechanics' Bank of Detroit, value received, with interest after due.

" 'THE EXCELSIOR ELECTRIC CO. OF MICHIGAN.

" 'By A.P.T. BENITEAU, President.

" 'E.J. ENSIGN, Secretary.'

"This note was indorsed as follows: 'E.J. ENSIGN, A.P.T. BENITEAU, M.W. FIELD, Treasurer; M.W. FIELD, J.H. FARWELL.'

"And thereupon the $2,000 note of February 18, 1884, was taken up, and the renewal note [the one in suit] substituted.

"(8) There is no oral agreement, after the indorsement of the first two notes, that the liability of the accommodation indorsers should be joint and not successive; but the court finds that upon the indorsement of all the said notes, including the one in suit, there was the same understanding among all of the parties, namely, that the accommodation indorsers should be joint, and not successive, indorsers.

"(9) All of the said notes were negotiated at the bank by the treasurer of the company, and none of them were actually transferred to any of the said accommodation indorsers.

"(10) The note in suit, after maturity, was taken up at the bank by the plaintiffs, who paid to the bank the full amount thereof.

"The court finds, as conclusions of law, (a) that the defendant company is liable for the full amount of the note in suit; (b) that the defendants Beniteau and Ensign are each liable for one-quarter of the amount of said note in suit, and the judgment will be entered accordingly.

"J. LOGAN CHIPMAN, Judge."

Exceptions were taken to the findings of fact upon the ground that there was no evidence to support the findings of the judge, and that there was no law to support the judgment. The bill of exceptions contains all the testimony given upon the trial, and such testimony fully supports the facts found. The only question of importance is whether parol testimony was admissible on the part of defendants to show that all of the indorsers were accommodation indorsers, and that they were simultaneously made for the benefit of the corporation under an agreement or understanding that each should be liable only for his pro rata share. If it was competent to show such agreement with reference to the indorsement of the first note, and the note in suit being the result of renewals of the original note indorsed in the same manner, the judge of the superior court was authorized to draw the inference that such agreement attached to each renewal without any new arrangement. Plaintiffs seek to hold the defendants Beniteau and Ensign as jointly liable with the maker as first indorsers of the note in suit. They call attention to the fact that upon the face of the paper the defendants cannot be held as joint indorsers with them, for the reason that the note is payable to the order of Moses W. Field, treasurer, and both Ensign and Beniteau indorsed before the payee, and therefore, under the decisions of this court in the cases of Wetherwax v. Paine, 2 Mich. 555; Rothschild v. Grix, 31 Mich. 150; and Sibley v. Muskegon Nat. Bank, 41 Mich. 196, 1 N.W. 930,--they are liable as joint makers, and not as indorsers.

None of ...