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Michigan Court Ruling on Joint Note

This case involves a promissory note signed by two makers, Belle W. Clement and Byron C. Thorpe. The bank sued Clement to collect on the note but did not name Thorpe as a defendant. Clement argued she could not be liable because the note was a joint obligation and both makers were not parties to the suit. The Michigan Supreme Court held that the note represented the joint and several obligation of the makers under both Michigan and Illinois law. Therefore, the bank could recover from Clement alone and the trial court's judgment in her favor was set aside. The case was remanded with instructions to enter judgment for the bank based on the jury's verdict.

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164 views2 pages

Michigan Court Ruling on Joint Note

This case involves a promissory note signed by two makers, Belle W. Clement and Byron C. Thorpe. The bank sued Clement to collect on the note but did not name Thorpe as a defendant. Clement argued she could not be liable because the note was a joint obligation and both makers were not parties to the suit. The Michigan Supreme Court held that the note represented the joint and several obligation of the makers under both Michigan and Illinois law. Therefore, the bank could recover from Clement alone and the trial court's judgment in her favor was set aside. The case was remanded with instructions to enter judgment for the bank based on the jury's verdict.

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Kath
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Continental Illinois Bank & Trust Co. v. Clement, 259 Mich.

167 (1932)

Michigan Supreme Court

CONTINENTAL ILLINOIS BANK & TRUST CO. v.


CLEMENT
259 Mich. 167
Docket No. 108, Calendar No. 36,430
June 6, 1932

Submitted April 20, 1932.

Howard, Kimball & Howard, for plaintiff.


Adams, Van Horn & Bloem, for defendant.

Opinion
168 Author: *168 North, J.
This is a suit on a promissory note signed by the defendant, Belle W. Clement, and another,
Byron C. Thorpe. The defense urged is that the note is the joint obligation of the two makers,
and that plaintiff cannot recover because one of them was not made a party defendant. The
jury’s verdict was in favor of the plaintiff, but judgment for defendant was entered non
obstante. Plaintiff has appealed.

The note in part reads:

“Chicago, Ill., February 9, 1931.

‘ ‘ Sixty days.....after date, the undersigned, for value received, promises to pay to the order
of Continental Illinois Bank & Trust Company, at its office in Chicago, Ill., Twenty-four
thousand dollars. * * *

“To secure the payment of this note * * * the undersigned has pledged, transferred and
delivered to said bank the following property, viz: (sundry securities) and further to secure
said note and liabilities the undersigned hereby pledges, assigns and transfers any and all
other property now or hereafter and howsoever in the possession or control of the holder
hereof. * * *

(Signed) “Byron C. Thorpe

(Signed) “Belle W. Clement.”

The negotiable instruments law of this State (2 Comp. Laws 1929, § 9266) provides:

“Where an instrument containing the words ‘I promise to pay,’ is signed by two or more
persons, they are deemed to be jointly and severally liable thereon. ’ ’

“If an instrument worded in the singular is executed by several, the obligation is a joint and
several one.” Dow Law Bank v. Godfrey, 126 Mich. 521 (86 Am. St. Rep. 559), citing numerous
cases.

It is quite persuasive) that each of the several verbs used in this note is in form to agree with a
169 *169 subject in the singular, not in the plural. Conforming to this construction, the note, if stated
in such words as would eliminate the seeming ambiguity, would read: Each (not both) of the
undersigned promises to pay, etc. A note so drawn would clearly fall within the above-quoted
portion -of the negotiable instruments law and the decisions cited. 'We think it follows that the
note in suit is the joint and several obligation of the makers.
In the trial-court counsel agreed that the case should be controlled by the law of the forum
rather than the law of Illinois, where the note was executed and made payable. Appellant’s brief
now points out that counsel were in error in so stipulating, but appellee insists that the
stipulation should be held binding upon the parties in this appeal, and that the law of Michigan
should control. The same result will be reached in either ease. Section 68 of the Illinois
negotiable instruments law provides:

“All parties jointly liable on a negotiable instrument are deemed to be jointly and severally
liable.” Smith-Hurd Illinois Revised Statutes (1931), chap. 98, § 88.

Not only by statutory provision but by court decision it appears the rule in Illinois is that
persons who sign a note joint in form are liable both jointly and severally. Hochschild v.
Goddard Tool Co., 233 Ill. App. 56; Harrison v. Thackaberry, 248 Ill. 512 (94 N. E. 172).

The judgment entered in the circuit court is set aside, and the case remanded with direction to
enter judgment upon and in accordance with the verdict of the jury. Costs to appellant.

Clark, C. J., and McDonald, Potter, Sharpe, Fead, Wiest, and Butzel, JJ.,
concurred.

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