Williamson v. Rubich

OPINION By NICHOLS, PJ. A history of the litigation leading up to the action which comes to this court on appeal upon questions of law is succinctly stated in the journal entry of the Court of Common Pleas of Columbiana County, which journal entry is attached to and made a part of the bill of exceptions now before this court. That entry reads as follows:— “This day this cause came on to be heard on the motion of the defendant, Janet Williamson, made under §2339.54 R, C., asking the court to issue an order to the Clerk directing the Clerk that in recording the judgment he certify that Janet Williamson was surety and Robert Williamson, Louis Rubich and Kathryn Rubich are principal debtors on the judgment taken in this action, and the testimony and arguments of counsel. Whereupon, the Court finds that judgment was taken on the cognovit note which is the subject of this action, on the 19th day of May, 1954; that defendant, Janet Williamson, has admitted that she first learned of the judgment in August of 1954; that defendant, Janet Williamson, on the 21st day of April, 1955, filed a petition in this court to vacate and set aside the judgment of May 19, 1954 claiming that her signature on said note was a forgery; that this cause came on to be heard upon the issue of the genuineness of her said signature and was tried to a jury, which jury returned a verdict finding the signature to be genuine on the 21st day of December, 1955; that on January 6, 1955, this court filed a decree lifting the suspension of the previous judgment and dissolved the injunction against execution on said judgment; and that following this action of the court the defendant, Janet Williamson, filed a motion for new trial on January 18, 1956, and following the overruling of said motion, to wit, on the 25th day of February, 1956, defendant, Janet Williamson, for the first time raised the issue of surety-ship by filing the motion now before the court. “The court further finds .that the defendant, Janet Williamson, has had a year and a half within which to raise the issue of suretyship, and at no time within this period was such issue brought before the court; that defendant could have elected to contend that she was a surety in April of 1955, but did not, but rather elected to contend that her signature was not genuine; that an examination of the face of the note reveals that Robert Williamson and Louis Rubich signed as partners, and that Kathryn Rubich and Janet Williamson did not sign as partners, placing Janet Williamson in no better position from the evidence on the face of the note than Kathryn Rubich; and that in her relationship to — 407 — Louis Rubich and Kathryn Rubich, Janet Williamson is not in position of surety on the note in question. “It is therefore ordered, adjudged and decreed that the motion herein filed by defendant, Janet Williamson, on February 25, 1956, be and the same is hereby denied with exceptions to the defendant, Janet Williamson.” Subsequent to the entry above quoted Janet Williamson filed her chancery action in the Court of Common Pleas of Mahoning County in which she alleged:— “* * * that no part of the proceeds of said loan ever accrued to her or her benefit; that the money, thus borrowed was borrowed by a partnership known as Williamson Farm Equipment, was credited to the account of said partnership and used solely by said partnership. Plaintiff says she is not and never has been a member of such partnership but that Louis Rubich and Robert Williamson were members thereof at the time said partnership received the proceeds of such loan; and that Kathryn Rubich became a partner sometime thereafter and remains as a partner therein. “Plaintiff says that execution has been levied upon her property to sell same at judicial sale to satisfy said judgment, and that such forced sale of her property will result in irreparable damage to the plaintiff. “Plaintiff therefore prays that the defendants be compelled to pay The New Waterford Bank the amount of said judgment and interest and costs thereon, and save harmless this plaintiff from the effects thereof, and for the costs herein, and for such other and further relief to which she may be entitled.” In the Common Pleas Court of Mahoning County the defendants, Louis Rubich and Kathryn Rubich were on several occasions granted leave to move or plead and finally on February 19, 1957, they were granted leave to file answer instanter. No .answer was ever filed in the office of the Clerk of Courts of Mahoning County in accordance with the leave granted and the transcript of the original papers and the docket and journal entries does not contain any such answer although we have ascertained that an unfiled answer is actually in the files of the Clerk of Courts. We may assume that the trial court considered such answer as having been actually filed, and that therein was raised the issue of res judicata since the journal entry of the court of common pleas of Mahoning County states that the cause came on to be heard “on the petition of the plaintiff, Janet Williamson, the separate answer of defendants, Louis Rubich and Kathryn Rubich, the evidence and arguments of counsel and was submitted to the court with briefs and reply briefs of both parties.” An examination of the journal entry subscribed by the honorable judge of the Mahoning County Common Pleas Court shows that the sole ground upon which the action of plaintiff, Janet Williamson, was decided against her and her petition dismissed was that the judgment of the common pleas court of Columbiana County established the defense of res judicata as is definitely shown by the entry of the common pleas court of Mahoning County as follows:— — 408 — “Whereupon the court finds that this is an action under §1341.9 R. C., by plaintiff as surety to compel the defendants as principal debtors to discharge the debt for which the plaintiff has become bound; that in Case No. 41110 of the Common Pleas Court of Columbiana County, Ohio, judgment was rendered upon a promissory note against all of the parties hereto; that in said case, after judgment, the plaintiff herein under §2329.54 R. C., by motion, sought to secure certification as surety; that the court denied the motion finding that ‘in her relationship to Louis Rubich and Kathryn Rubich, Janet Williamson is not in position of surety on the note in question’; that in said previous case before a court of competent jurisdiction in which all of the parties herein were also parties, an issue of suretyship was raised by plaintiff herein, as between herself and the defendants herein, Louis Rubich and Kathryn Rubich, as to which issue the parties were adversary; that the court directly determined that issue adversely to plaintiff herein; and that plaintiff, Janet Williamson, was conclusively bound by that determination and cannot again litigate the same issue in this action where her whole claim is based upon a suretyship position. “It is therefore ordered, adjudged and decreed that judgment be entered on the issue joined for the defendants, Louis Rubich and Kathryn Rubich; that the petition heretofore filed herein be dismissed; that the defendants, Louis Rubich and Kathryn Rubich go hence without day and recover from the plaintiff, Janet Williamson, their costs herein expended.” While the journal entry last above quoted says that plaintiff’s action was brought under authority of §1341.9 R. C., it is probable that the court Intended to say that the action was brought under §1341.19 R. C., which provides:— “A surety may maintain an action against his principal to compel . him to discharge the debt or liability for which the surety is bound, after it becomes due.” It is settled law however that a surety’s suit to compel the principal to pay is an equity case and exists independently of and prior to the statute. Barbour v. National Exchange Bank, 45 Oh St 133, 12 N. E. 5; and Horst v. Dague, 34 Oh St 371. The action in the Common Pleas Court of Mahoning County being a chancery action was properly submitted to and determined by the chancellor. The sole issue before this court of appeals is whether the chancellor was correct in holding that the journal entry of the Common Pleas Court of Columbiana County is such as to conclusively establish that the issues between the parties hereto have been previously adjudicated. I will not, therefore, determine whether in law or in fact Janet Williamson was surety only for the defendants, Louis Rubich and Kathryn Rubich. Since I arrive at the conclusion that the decision in the Common Pleas Court of Mahoning County was not authorized, and that the court committed prejudicial error in its determination, I will proceed to give reasons for my conclusion that the judgment or decree of the Com — 409 — mon Pleas Court of Mahoning County should be reversed and the cause remanded for such further proceedings as may be authorized. I first call attention to the case of Gatch v. Simkins, 25 Oh St 89, wherein the syllabi are as follows:— “In an action on a written instrument against two or more persons jointly and severally bound, the finding by the court, under section 449 of the code, that one or more of the makers signed the same as surety or bail for his or their co-defendant, and the certificate in the judgment showing which is principal and which are sureties, do not conclude the parties as to the facts so found and certified, in an action subsequently instituted for contribution. “The effect of such finding and certificate is not changed by the fact that the defendants at the trial, appeared, and filed answers in which each alleged that the others were principal debtors.” In the cited case as shown by the language of the court on pages 90 and 91 we find that in the original action upon the note the court:— “* * * rendered judgment in favor of Weyland against all the defendants, and further found, upon the issues joined between the defendants, that Simkins was principal debtor, and that Gatch and Shaw were his sureties, and thereupon it was ordered that execution first issue against Simkins, etc. “To the introduction of this record in evidence the plaintiff below objected. “Afterward, the court charged the jury to the effect, that the finding of the court in Weyland’s case, that the plaintiff, Simkins, was principal debtor in said action, and that the defendant and Shaw were his sureties only, was conclusive of the fact so found, and constituted a bar to the action for contribution. To this charge the plaintiff excepted. Verdict and judgment having been rendered in favor of the defendant, the plaintiff filed his petition in error in the District Court, which resulted in a reversal of the judgment for error in the charge of the court.” In the opinion by the court at page 91 I find:— “We think there was error in the charge of the Court of Common Pleas to the jury. The finding of the court in Weyland’s case, that Simkins was principal and that Gatch and Shaw were his sureties, has no other effect than that prescribed in section 449 of the code. It does not conclude the parties in an action for contribution afterward instituted. The supposed issue joined in the case does not change the effect of the finding. The same order might have been made upon a claim presented orally. The supposed pleadings were unauthorized and conferred no jurisdiction upon the court, other than that conferred by said section 449 of the Code.” So, in the case now under consideration. The only effect of the motion filed in the Common Pleas Court of Columbiana County by Janet Williamson, had the motion been granted, was to cause an execution to be levied upon the lands of the principal debtor located in Columbiana County. Sec. 2329.54 R. C., reads as follows:— “When judgment is rendered in a court of record in this state upon — 410 — an instrument in writing in which two or more persons are jointly or severally bound, and it appears to the court, by parol or other testimony, that one or more of the persons so bound signed it as surety or bail for his codefendants, the clerk of such court, in recording the judgment thereon, must certify which of the defendants is principal debtor and which is the surety or bail. Such clerk shall issue execution on such judgment, commanding the officer to levy on the goods, chattels, lands, and tenements, of the principal debtor, or, for want of sufficient property of his to make it, to levy on the goods, chattels, lands, and tenements, of the surety or bail. The property, personal and real, of the. principal debtor, within the jurisdiction of the court, shall be exhausted before any of the property of the surety or bail is taken in execution.” This section specifically provides only that the “property, personal and real, of the' principal debtor within the jurisdiction of the court, shall be exhausted before any of the property of the surety or bail is taken in execution.” From the record it is disclosed that there was no property of Louis Rubich and Kathryn Rubich in Columbiana County upon which execution could issue. The decision in Gatch v. Simkins, supra, is followed in Hill v. King, Ex’r., 48 Oh St 75, wherein the syllabi are as follows:— “Where a surety pays a judgment rendered against him and his principal, he has the right, though not certified as such in the record of the judgment, to be subrogated to the place of the judgment creditor, against the principal and all others standing in his shoes. “This right is not affected by the provisions of §5836 R. C. The object of this section is to enlarge, not to limit, the rights the surety had for his indemnity against his principal, on payment of the debt.” In the opinion the court at page 80 states:— “The rule is that so soon as the surety pays the debt of his principal there arises in his favor an equity to be subrogated to all the rights, remedies and securities of the creditor, and has the right to enforce them against the principal for the purpose of his indemnification. * * * “The doctrine, in its application to the relation of principal and surety, is so equitable and just, that there seems to be an entire consensus in the views of authors and courts upon the subject. And in no court has it been more fully recognized and applied than in our own. Neilson v. Fry, 16 Oh St 552; Dempsey v. Bush, 18 Oh St 376; Neal v. Nash, 23 Oh St 483.” In the opinion in Crawford v. Turnbaugh, Trustee, 86 Oh St 43 at page 47 I find:— “Nevertheless a guarantor or a surety, who is not so certified, who pays the judgment has the right to be subrogated to the place of the judgment creditor against the principal and all others standing in his shoes. This right is not affected by the statutes providing for the certificate of suretyship. The statutes are merely in addition to those equitable rights. Hill v. King, Exr., 48 Oh St 75.” (Emphasis ours.) It is noted that in the journal entry of the Common Pleas Court of Columbiana County it seems apparent that the judge of that court was — 411 — considering only the delay which Janet Williamson had allowed to intervene between the judgment against her and the time of filing her motion under §2329.54 R. C., and held that such delay precluded her from occupying the position of surety as claimed by her. Certainly the proceedings in the common pleas court Columbiana County were merely ancillary and not conclusive upon Janet Williamson so as to bar her action in the Court of Common Pleas of Mahoning County. The judgment and decree of the Common Pleas Court of Mahoning County is reversed as contrary to law and the cause remanded to that court for further proceedings. GRIFFITH, J, concurs. PHILLIPS, J, concurs in judgment.