McKee v. Harwood Auto. Co.

• Decision Date: 23 February 1928
• Docket Number: No. 13033.,13033.
• Parties: McKEE et al. v. HARWOOD AUTOMOTIVE CO.
• Court: Indiana Appellate Court

162 N.E. 62

McKEE et al.

v.HARWOOD AUTOMOTIVE CO.

No. 13033.^*

Appellate Court of Indiana, in Banc.

Feb. 23, 1928.

Appeal from Grant Circuit Court, J. F. Charles, Judge.

Action by the Harwood Automotive Company against Clement B. McKee and another. Judgment for plaintiff, and defendants appeal. Affirmed.

D. M. Bell and John A. Kersey, both of Marion, for appellants.

Condo & Batton, of Marion, for appellee.

THOMPSON, J.

There was an agreed statement of facts in this case which was submitted in lieu of the introduction of evidence, which is, in substance, as follows: That Clyde McKee purchased from the appellee herein an automobile, making a down payment of $11.40, and agreeing to pay the balance of $570 in installments at the rate of $11.40 per week; that to secure said contract he gave appellee a note signed by himself and by the appellants herein; that, at the time of said purchase and the making of said note, said Clyde McKee was a minor and was known by all parties to the transaction to be such; that said Clyde McKee received the entire consideration for said contract, and that appellants signed said note only as sureties; that said Clyde McKee paid a total of $197 on the automobile, after which he disaffirmed the contract, returned the automobile to the appellee and demanded the return of the money which he had already paid in on the machine; that appellee refused said demand, whereupon said Clyde McKee sued appellee for said money.

The appellee filed a cross-complaint to recover from appellants herein, as sureties on the note, for the balance remaining unpaid on said contract of purchase. Appellants filed answer in two paragraphs, and appellee replied by general denial. There was a finding in favor of appellee against appellants as sureties. Appellants then filed a motion for a new trial as to the issues made on the cross-complaint, on the grounds: (1) That the decision of the court was not sustained by sufficient evidence; and (2) that the decision of the court was contrary to law. Said motion was overruled, and judgment was rendered in favor of appellee.

The error assigned for reversal is the action of the court in overruling the motion for a new trial.

[1] The only question arising on this appeal is as to the liability of appellants as sureties on the note. Appellants earnestly contend that, inasmuch as the note in suit was a joint obligation by all parties thereto, the rule should govern that, where one joint obligor is released from payment, all the parties, whether as principals or sureties, are thereby released. We concede that such is the rule generally, but there are exceptions to this rule. The rule is aptly stated in Winn v. Sanford, 145 Mass. 302, 14 N. E. 119, 1 Am. St. Rep. 461, where the court said:

“Where one becomes a surety for the performance of a promise made by a person incompetent to contract, his contract is not purely accessorial, nor is his liability necessarily ascertained by determining whether the principal can be made liable. Fraud, deceit in inducing the principal to make his promise, or illegality thereof, all of which would release the principal, would release the surety, as these affect the character of the debt; but incapacity of the principal party promising to make a legal...