69 P. 548 | Or. | 1902
This is a suit by Ellis G. Hughes to compel Charles E. Ladd to pay and discharge two certain promissory notes, one of which was executed by Hughes, Ladd, and other persons, composing the finance committee of the Chamber of Commerce, as joint makers, and the other by the Chamber of Commerce; the payment of the latter being guarantied by the members of the finance committee. The controversy grows out of transactions connected with the erection of the Chamber of Commerce building, a statement of which will be found in the eases of Hughes v. Pratt, 37 Or. 45 (60 Pac. 707), and Ladd v. Chamber of Commerce, 37 Or. 49 (60 Pac. 713, 61 Pac. 1127, 62 Pac. 208). The two notes here involved are referred to as the Green and Breck notes. The contention of Hughes is that, as between the parties to the notes, he is a surety, and is entitled to have Ladd, as principal, exonerate him by paying the obligations. We find no basis for such a contention in the record, but deem it unnecessary to state at length the reasons for our conclusion. The case was tried before the judges of the circuit court of Multnomah County, sitting in banc, and an elaborate and carefully prepared opinion, covering the whole ground, was filed by Judge Cleland, in behalf of himself and associates, with the reasonings and conclusions of which we are entirely satisfied. It would be useless labor, therefore, for us to go over the same matters again. It is sufficient to say that, after an examination of the record, we are all agreed that the decree should be affirmed. • Affirmed.
1. “ It becomes important to ascertain the relation of defendant Ladd to the Chamber of Commerce, arising out of the making of the notes the plaintiff did not sign. When it was decided loans to the amount of $220,000 were necessary, the proper committee was directed and authorized to make the notes of the Chamber of Commerce in convenient amounts, and it was understood these notes were also to be signed by the members of the finance committee. The subcommittee, however, was given power to act. If the arrangement had been completed as designed by the Chamber of Commerce, it would have been in fact and in law the principal, and the members of the finance committee sureties. When the subcommittee applied for the accommodation another form of note was required by the bank. This was a note signed by the members of the finance committee, omitting the Chamber of Commerce from the list of makers. The conditions insisted upon by the bank were by the committee submitted to and ratified by the Chamber of Commerce. The manner of closing the loan was fully understood by the Chamber of Commerce, the money paid to its treasurer, and disbursed by it through warrants in the manner in which the by-laws required its business to be transacted. After the first note was made, the plan then adopted to secure the money seems to have been followed in all other cases wherein notes were given in and about the completion of the building, except twenty-eight notes hereafter to be mentioned. In two particulars only do the transactions under consideration differ from the ordinary case where a principal signs a note, receives the consideration therefor, and others sign as sureties, and do not receive any part of the consideration. One of these is the omission of the name of the principal from the note. This omission did not occur through the act, wish, or design of the principal or sureties, but because of the suggestion of the payee
“In this connection it is important to inquire if the parties to this case, or either of them, are entitled to rely upon any implication or inference which might be drawn from these entries. It does not appear that either plaintiff or defendant Ladd, in making the notes which are the subject of this suit, were in any way influenced by such entries. The history of the transactions out of which these entries arose was familiar to • each of them, and neither could have been, in fact, misled or deceived, because the entries were so made. The corporation was neither misled, deceived, nor ignorant in respect thereto. The fact of these entries was reported to the corporation, and it resolved the entries should not be allowed to stand, since the same were misleading. There was only one respect in which the entries could have been wrong, viz., in that they represented a direct loan of money by the persons given the credit, instead of the fact these persons were sureties and the indebtedness was in fact that of the Chamber of Commerce. The correspondence of the plaintiff with one of the finance committee while the former was in Europe shows that he understood the true relations of the parties. Against the evidence afforded by these entries that the transaction was in fact a series of loans made by the group of persons who signed the notes to the Chamber of Commerce, many circumstances must be considered. The men who signed the notes were and are among the very best business men in the state, and yet, if these. were loans, they failed to take any evidence thereof by note or otherwise, to fix any time of repayment or rate of interest, and, what is more remarkable, in view of the.amounts involved,
‘ ‘ The court is confirmed in this view by a careful considera
Chamber of Commerce, Feb. 8, 1892.
Bank of British Columbia-------------------------$50,000
To the individual members of the finance committee of the Chamber of Commerce, for a loan effected by the committee for the use of the Chamber of Commerce, dated February 1, 1892, payable six months from date, with interest at 7£ per cent per annum, upon which the individual members of the finance committee are liable, and the Chamber of Commerce liable to them----------- 50,000
'1 The entries of all other transactions prior to the Green loan are substantially in the same form. The Green matter is entered on the journal (page 73) as follows:
Chamber of Commerce, March, 1895.
J. L. Hartman, treasurer R. E. fund--------------$20,000
To individual members of finance committee------ 20,000
Of Chamber of Commerce for proceeds of note of the committee to John Green, dated March 15, 1895, payable one year from date, with interest at 7 per cent per annum. Given in payment of outstanding obligations of the Chamber of Commerce, and for which the Chamber of Commerce is liable to them.
“The Breck matter is entered on the journal (page 134):
Chamber of Commerce, December 31, 1896.
J. L. Hartman, treasnrer R. E. fund--------------$ 5,500.
To individual members finance committee-------- 5,500
For note of individual members finance committee given Anna Breck, dated January 19,1897, payable in one year, with interest at 7 per cent per annum.
“These entries, with those showing the Chamber of Commerce from time to time paid the interest as interest on these notes, lead the court to believe the entries are no more than a bookkeeper’s device to keep up the history of the business, and in fact the indebtedness was treated and deemed to be that of the Chamber of Commerce.
‘ ‘ If, however, the view of the court is the correct one, it becomes necessary to further consider the facts in the ease. Among the notes outstanding March 15, 1895, the date of the Green note, upon which, in equity, the Chamber of Commerce was the principal debtor, and defendant Ladd a surety, were the twenty-eight notes already particularly mentioned, aggregating about $60,000, one note to Donald Macleay for $10,000, and one to Kenneth Macleay for $5,000. The $20,000 represented by the Green note was paid in to the corporation treasury, and disbursed for corporation purposes. Therefore, as between the signers and the Chamber of Commerce, the latter is the principal, and the former sureties. The relation of plaintiff and defendant Ladd to each other remains to be considered. The minutes of the meeting of the finance committee show the transaction to have been one of the corporation, conducted in the usual manner. The persons present in the meeting were regular members of the committee, and empowered to act for the corporation. Acting in that capacity, the committee negotiated a loan for the Chamber of Commerce for the purpose of paying certain indebtedness of the Chamber of Commerce, then due and pressing. The taxes assessed upon the corporate property constituted the indebtedness of the Cham
“Let findings and decree be entered for defendants. All concur. ’ ’ Affirmed.