Palmer v. Noe

• Decision Date: 29 June 1915
• Docket Number: 4539.
• Citation: 150 P. 462,48 Okla. 450,1915 OK 523
• Parties: PALMER v. NOE.
• Court: Oklahoma Supreme Court

150 P. 462

48 Okla. 450, 1915 OK 523

PALMER v. NOE.

No. 4539.

Supreme Court of Oklahoma

June 29, 1915

Syllabus by the Court.

A promissory note, dated, executed, and delivered at Salem Ark., and payable in that state, in the absence of other proof, is an Arkansas contract, and is governed by the laws of Arkansas; but, in an action upon the same in this state where the laws of Arkansas are not pleaded or proven, the presumption is that the laws of Arkansas are the same as the laws of this state.

Under section 4694, Rev. Laws 1910, the payee of a promissory note may, at his option, sue one of the sureties, without joining the maker and the other sureties as parties defendant; and his failure to sue the maker and other sureties does not operate as a release of the surety sued.

The failure of the payee of a promissory note to sue the principal, upon the oral request of the surety sued, made long after the maturity of the note to the attorney of the payee, who had the note for collection, does not operate as a release of the surety sued, even though the principal, at the time the request was made, was solvent and amply able to pay the note, and, in the meantime, he and the other sureties thereon became insolvent, it being the duty of the surety upon the failure of the principal to pay the note when due to pay the same and pursue his remedy against the principal and his cosureties.

Commissioners' Opinion, Division No. 3. Error from District Court, Seminole County; Tom D. McKeown, Judge.

Action by S. F. Palmer against T. D. Noe. Judgment for defendant and plaintiff brings error. Reversed and remanded.

J. W. Willmott, of Wewoka, for plaintiff in error.

Crump, Fowler & Skinner, of Holdenville, for defendant in error.

DUDLEY C.

On April 4, 1911, the plaintiff in error, plaintiff below, as payee, commenced this action in the district court of Seminole county, against the defendant in error, defendant below, to recover the amount claimed to be due upon a promissory note of $300, dated at Salem, Ark., October 16, 1905, due and payable to the order of the plaintiff one year thereafter, bearing interest at 10 per cent. from date until paid, signed by Fred Basham, as principal, and C. E. Kay, J. A. Cunningham, A. F. Basham, Geo. D. Robins, and the defendant in error, as sureties. The issues were joined, and thereafter and in April, 1912, the case was tried to the court and jury, resulting in a judgment in favor of the defendant, from which the plaintiff has perfected an appeal.

The facts applicable to the questions presented, in substance, are: The note in controversy was executed and delivered at Salem, Ark. Fred Basham was the principal on the note, and the other signers thereof, including the defendant, were sureties. The payee and payors of said note resided at or near Salem, Ark., at the time the note was executed and delivered. Shortly after the maturity of the note, the principal maker thereof paid $30, being the past-due interest thereon, and this payment is indorsed on the note. In November, 1906, the defendant removed from Arkansas to the Indian Territory, and located in what is now Seminole county, Okl., where he has ever since resided. The principal and the other sureties have continuously resided in Arkansas since the execution of the note. At the time the suit was brought, and for some time prior thereto, the plaintiff resided at Springfield, Mo. At the time this suit was brought, the plaintiff had not sued the principal or any of the other sureties on said note. The execution and delivery of the note is admitted. In March, 1910, the defendant was in Salem, Ark., and while there an attorney presented the note in controversy to him for payment but he declined to pay the same, and orally requested the attorney to sue the principal and the sureties thereon, including himself, in Arkansas, and advised him that he would have his attorney, naming him, file an answer for him. The attorney declined to bring the suit, claiming that the principal maker was insolvent. The only defense interposed by the defendant is the failure of the plaintiff to institute suit upon said note in 1910, as requested, claiming that at that time and for some time prior thereto the principal maker of said note was solvent and amply able to pay the same, but that since that time he became insolvent, and by reason of the failure of the plaintiff to sue the principal maker of said note, and especially to comply with his request in 1910, the principal maker thereof and the other sureties having, in the meantime, become insolvent, and the action, as a matter of fact, having barred as against them, he is discharged as surety. The only evidence upon the question of the request to bring the suit is the testimony of the defendant, which is as follows:

"I will ask you if you know Lemon Kay. A. I do. Q. I will ask you to state if he is a licensed attorney, practicing law at Salem, Ark. A. Yes, sir. Q. I will ask you to state who had the note. Do you know where the note was last March, two years ago? A. Yes, sir; that was the first time I had seen it since I signed it. Q. Who had it in his possession? A. Mr. Kay. Q. Where? A. Salem, Ark. Q. Did you see the note at that time? A. Yes, sir; I saw him [referring to Kay, the attorney] on the streets, and he called me in his office and asked me if I remembered signing it, and of course I knew my signature and told him that I did. Q. At that time what did he say to you about the payment of the note, if anything? A. Said Mr. Palmer sent it down there to him for collection. Q. What did you tell him? A. I told him I wanted him to sue Mr. Basham, the principal on this note. Q. You told him to sue Mr. Basham? A. Yes, sir. Q. What did he say? A. He said it would not be worth while to sue Fred at this time. Q. What did you say? A. I told him I wanted him to sue on it. If I had to pay it I wanted to know it. Q. Where did you tell him you wanted him to sue you? A. In Arkansas, and I went and saw an attorney. Q. What attorney did you consult? A. Mr. Short. Q. Well, then, after the conversation with Mr. Kay regarding the note, in which you told him you wanted him to sue the principal on the note, then did you have a conversation with him a little later? A. Yes, sir. I told him Mr. Short would look after my interests."

The defendant in his answer alleged that at the time the note matured he requested the plaintiff to sue upon it, but there is no testimony at all in the record with reference to this. The jury found for the defendant, and it follows, of course, that the request to bring the suit was made in 1910, and that at that time the principal maker was solvent and amply able to pay the note, and that since that time he has become insolvent. The question, therefore, for determination is whether or not the defense interposed was, as a matter of law, a defense.

The plaintiff insists that since the note was executed in Arkansas it is an Arkansas contract, and should be governed by the laws of that state. This is true, but the laws of Arkansas were not pleaded nor proven, and hence they are presumed to be the same as the laws of this state. Steward v. Commonwealth National Bank, 29 Okl. 754, 119 P. 216; Dunbar v. Commercial Electrical Supply Co., 32 Okl. 634, 123 P. 417, and cases therein cited; Atchison, Topeka & Santa Fé Ry. Co. v. Lambert, 32 Okl. 665, 123 P. 428.

Under section 4694, R. L. 1910, the plaintiff had a right to sue the defendant, without joining the original maker or the other sureties upon said note. Francis v. First National Bank of Eufaula, 40 Okl. 267, 138 P. 140; Horne v. Oklahoma State Bank of Atoka, 42 Okl. 37, 139 P. 992.

At the close of the testimony the plaintiff requested the court to instruct the jury to return a verdict in his favor. This the court declined to do, to which the plaintiff saved exceptions. The action of the court in this respect is assigned as error, and is properly presented for review. The note matured October 16, 1906. This suit was brought in April, 1911. Assuming that the laws of Arkansas are the same as ours, as to the statute of limitations upon a promissory note, this action was not barred, as against the principal maker and the other sureties, upon this note when the suit was brought. If the failure of the plaintiff to sue the principal, and especially his failure to do so in 1910, when requested by the defendant, does not exonerate the defendant, then the requested instruction should have been given; otherwise not.

In Daniel on Negotiable Instruments (6th Ed.) vol. 2, § 1326, it is said:

"Mere delay and passivity of the creditor does not discharge a drawer or indorser, or other surety, even when the delay and subsequent insolvency of the principal deprives him of all means of reimbursement; and, unless authorized so to do by statute, he cannot, by request or notice, compel the creditor to sue the principal debtor."

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