Adams v. DeFrehn

Opinion by

Porter, J.,

The plaintiffs and the defendant were the officers and principal stockholders of the DeFrehn Chair Company, a corporation, being in need of ready money, and the plaintiffs and the defendant being interested in its success agreed to indorse its paper for the purpose of raising funds. On March 15, 1893, in pursuance of a resolution of the board of directors, tbe corporation made its promissory note for the sum of $3,500, payable to the order of all tbe parties to tliis action, who all indorsed the same, which note was discounted by the Central Banking Company of Mount Union, and the corporation received the proceeds. The note was renewed in the same form from time to time, small payments being made thereon with the same bank, the final renewal, which was indorsed by all the parties, being dated March 29, 1897, and maturing June 29, 1897, was for the sum of $8,400. About the time this last note became due, the defendant ceased to be an officer of the company and refused to join in a renewal of the note. The note was protested for nonpayment, and the indorsers duly notified. The plaintiffs allege that they subsequently paid in cash the note upon which they were liable as indorsers, jointly with the defendant, and bring this action to enforce contribution. The court below gave binding instructions in favor of the plaintiffs, and the defendant appeals.

The objection to the form of the action is not well taken. When two or more jointly pay a debt for which they are jointly liable with another, the payment being joint, those who have made it may maintain a joint action against their cosurety, to enforce contribution: Boggs v. Curtin, 10 S. & R. 211; Lowry v. Lumbermen’s Bank, 2 W. & S. 210. The sixth specification of error is dismissed.

The liability of the parties as indorsers of the note had become fixed by the protest and notice thereof. The right of the plaintiffs to pay the note and recover of the defendant his proportionate share thereof cannot be questioned; whether the plaintiffs paid the note was, under the evidence in this case, a question of fact to be determined by the jury; and the first and second specifications are without merit.

The burden was upon the plaintiffs to show that they had paid the note. It appeared in evidence that some days after the note had been protested, the corporation made a new note payable to the order of the present plaintiffs, which note was discounted at the same bank and the proceeds thereof paid to the plaintiffs, and the plaintiffs afterwards paid the old note with these same proceeds. If the new note was given in re’newal of the old one, then the payment was by the corporation, or if at the time the new note was given the plaintiffs agreed to give to the corporation time upon the old note, then the defendant cannot be called upon to make contribution: Hartley v. Kirlin, 45 Pa. 49; Barnett v. Reed, 51 Pa. 190. If tbe liability of tbe corporation upon the note which had been protested remained unchanged by the subsequent dealings, and the new note was simply taken by the plaintiffs as a security collateral to the original obligation, the defendant as a cosurety was deprived of no right, and upon payment of the original obligation by his cosureties he could be called upon to make contribution, although he would be entitled to credit for his pro rata share of any amount realized upon the new security: Slaymaker v. Gundacker, 10 S. & R. 75; Hacker v. Perkins, 5 Wharton, 95. The evidence as to whether the protested note had been paid by the corporation, or the plaintiffs, and as to the purpose for which the new note was given, was oral, and it was for the jury to find the facts upon which the right of the plaintiffs to recover depended. The third, fourth and fifth specifications of error are sustained.

The judgment is reversed and a venire facias de novo awarded.