Ruckdeschall v. Seibel

• Decision Date: 20 November 1919
• Citation: 101 S.E. 425
• Court: Virginia Supreme Court
• Parties: RUCKDESCHALL. v. SEIBEL et al.

101 S.E. 425

RUCKDESCHALL.

v.SEIBEL et al.

Supreme Court of Appeals of Virginia.

Nov. 20, 1919.

[Ed. Note.—For other definitions, see Words and Phrases, Borrower.]

Appeal from Circuit Court, Warren County.

Bill by R. C. Bane against H. J. Seibel, Jr., Bernard Ruckdeschall, and others, in which defendant Seibel filed answer against defendant Ruckdeschall, which court ordered to be treated as a cross-bill and bill of discovery. Judgment for defendant Seibel on cross-bill, and defendant Ruckdeschall ap-peals. Affirmed and remanded for modification.

On March 24, 1909, Bernard Ruckdeschall paid over to one James McF. Gummey the sum of $9,000 and took his note for the sum of $10,000 payable 30 days after date. The note was not paid at maturity, and the record does not disclose what other renewals of this note there were by Gummey in the meanwhile; but some time thereafter, precisely what date does not appear, the date probably being August 17, 1909, one Charles H. Burr became also bound to Ruckdeschall for the same $10,000, Burr being induced by Gummey to become bound on a renewal note for such amount at the request of Ruckdeschall, on Gummey's representation to Ruckdeschall that Burr was originally a joint beneficiary with Gummey of the $9,000 aforesaid. On this renewal note Burr appeared as maker and Gummey as indorser, but the evidence in the cause shows affirmatively that the new note was not given for any new consideration, and was not intended by any of the parties thereto to be a new contract in lieu of the original contract, but was given merely to furnish Ruckdeschall with a renewal note for the same obligation and an additional surety. Some time later, the precise date not being disclosed by the record, probably in October, 1909, on Gummey's representation to Ruckdeschall that H. J. Seibel, Jr., was also originally a joint beneficiary, with Gummey and said Burr, of the said $9,000, and upon Ruckdeschall's urgence that Seibel also be brought in as surety for said $10,000, at the request of Gummey, Seibel indorsed a renewal note for the $10,000 in favor of Ruckdeschall. The preponderance of the evidence, however, clearly shows that Seibel did not know at the time or any time prior to the taking of the depositions in the cause, that Gummey had made such representation to Ruckdeschall, and the evidence in the cause satisfactorily establishes the fact that Seibel became bound on the note aforesaid as accommodation indorser for Gummey, and that such only was in truth the nature of his obligation throughout the subsequent history of the transaction, although at times his name appeared as maker of subsequent renewal notes, and as guarantor on some of such notes, as well as indorser. Burr also remained bound in one form or another, as maker or indorser, on such renewal notes. But the evidence in the cause shows affirmatively that none of these notes were given for any new consideration, or were intended by any of the parties thereto as a new contract in lieu of the original contract, but were given only as renewals of such contract, and only for the same original consideration. The deposition of Ruckdeschall himself clearly shows this.

In March, 1910, Seibel paid $1,000 on the current note, and a renewal note was executed for $9,000, dated March 28, 1910, signed by Burr as maker and indorsed by Gummey and Seibel. On April 5, 1910, either Gummey or Burr paid $500 on the current note, and Seibel then paid a like amount, reducing the obligation to $8,000. Two notes were then executed for the $8,000, of date April 5, 1910; one for $500, on which Seibel appears as maker and Burr and Gummey as prior indorsers to Ruckdeschall, and the other for $7,500, on which Burr appears as maker and Gummey and Seibel as indorsers. The $7,500 last-named note seems to have been renewed from time to time without curtailment until September 6, 1910, when one for $7,500, with Burr as maker and Gummey and Seibel as indorsers, was executed. This seems to have been the last execution of any note for the $7,500 parcel of the aforesaid obligation. The $500 note last named was payable on April 24, 1910, and a note was given in renewal thereof, dated April 5, 1910, payable April 25, 1910, with the same maker and indorser. This seems to have been the last execution of any note for the $500 parcel of the said obligation.

There were subsequent partial payments on said $500 and $7,500 notes during September, October, and December, 1910, and February, March, April, May, June, July, August, October, and November 1, 1910. All of these payments were made by Seibel. No specific application was made by him of such payments on such $500 or $7,500 note, nor by Ruckdeschall, the holder and owner of such notes, but such payments were made by Seibel and considered by Ruckdeschall as made on the obligation as a whole, which was evidenced by such notes.

The last-named payments reduced such obligation to the balance of $6,539.21 as of September, 1911, and on that day Seibel confessed judgment in Virginia in favor of Ruckdeschall on such balance as unpaid and owing on such notes. Subsequently Seibel paid to Ruckdeschall on such judgment various partial payments, beginning with $600 on November 29, 1910, and followed at intervals in 1911, 1912, and 1913 with other payments, until December 22, 1913, which was the last payment made by him; the whole of such payments on the judgment aggregating $6,650, reducing the judgment to the amount of $2,854.11 as of January 11, 1916, which is the amount of such obligation asserted by Ruckdeschall in this cause against Seibel, and is sought to be enforced therein as a lien binding upon certain real estate in Virginia belonging to Seibel.

All of the aforesaid notes were executed in Pennsylvania, and were delivered and were payable in that state.

Seibel owed other obligations besides that aforesaid, some of them deed of trust debts' and some judgment debts, binding as liens upon his said land in Virginia. The originalcause before us was instituted by a lien creditor's bill filed by one R. C. Bane, a lien creditor of Seibel, against said Seibel, Ruckdeschall, and others as defendants. There was an order of reference in the cause, which, being executed, showed per report of the commissioner, among other debts of Seibel, the judgment lien aforesaid in favor of Ruckdeschall for said balance of $2,854.11 as of January 31, 1916. Thereupon Seibel excepted to such report on the ground, among others, that the judgment aforesaid is usurious at least to the extent of $1,000, which sum at least, it was alleged in the exception, should be allowed such defendant as a credit thereon; and a few days later Seibel filed his answer in such cause against Ruckdeschall, which he asked to be treated as a cross-bill and bill of discovery, and the decree of the court below entered on that date ordered that it be so treated.

The cross-bill alleged that the original $10,000 note aforesaid was given by Gummey for a loan of money by Ruckdeschall to him, that only $9,000 Was in fact so loaned, and that the original obligation was usurious to the extent of $1,000, and that the said judgment debt had not been purged thereof, and still contained such original amount of usury, together with the interest thereon, and asked for a discovery from the defendant Ruckdeschall, by answer under oath, of—

"the amount of money lent to said James McF. Gummey and the amount for which he received the notes and obligations upon which the judgment complained of is a part, and that he be required to answer under oath what payments have been made since the original transaction, and disclose fully all circumstances and transactions connected with the entire matter."

The defendant Ruckdeschall filed a demurrer, with grounds of demurrer specifically assigned, a special plea of the statute of limitations, and an answer under oath to said cross-bill.

The answer is responsive to the prayer of the cross-bill for discovery, and, in substance, takes the position that the $9,000 aforesaid was the purchase money for certain real estate which, in accordance with an agreement between Gummey and Ruckdeschall under which the outlay of the $9,000 was made, the latter was to buy and hold until Gummey and associates could raise the money to take it off his hands, which Gummey stated would be in less than a month, and that Ruckdeschall was then to sell the property to Gummey and his associates at a profit of $1,000, and that the original note aforesaid was given for the $10,000, although only $9,000 was in fact turned over by Ruckdeschall to Gummey, merely as a guaranty that the $9,000 investment and the stipulated profit of $1,000 would be returned to Ruckdeschall.

The deposition of Ruckdeschall in the cause, however, does not square with the discovery made in his answer. He says in his deposition, in substance, that the agreement in accordance with which he let Gummey have the $9,000 was, not that Ruckdeschall was to become the purchaser of any property, and thus put the $9,000 into an investment, but that—

"Mr. Gummey proposed that he had a settlement to make for some real estate, and that if I [Ruckdeschall] would put up this money he would give me a note for $10,000 for $9,000. He said he could make a profit out of it, and that the people he was dealing with could make a profit of $1,000 for advancing the money."

Again this witness was asked and answered as follows:

"After Mr. Gummey had used this $9,000 in the way you have described, what was he to do next with the property that he so acquired? A. * * * He was to buy it for some one and sell it over again to make a profit out of it."

And again, on cross-examination, this witness testified that Gummey said:

" * * * That the associates were buying some property, and he wanted this money to complete the settlement, and there would be enough profit out of it to give me [Ruckdeschall] $1,000—profit for my lending the money to help them...