
    Cooper v. Wagner et al.
    (Decided May 29, 1933.)
    
      Mr. Morris Weintraub, for plaintiff in error.
    
      Messrs. Hightower & O’Brien, for defendants in error.
   Ross, J.

This is a proceeding in error from the court of common pleas of Hamilton county, wherein judgment was rendered for the defendants, Bertram and Mary Wagner, upon an instructed verdict at the close of all the evidence.

The case was tried upon the issues made by the plaintiff, Anna Cooper, in her amended petition, Ex-Mbit A thereof, and the third amended answer of the defendants.

The plaintiff alleges that she purchased a note for a valuable consideration; that the note was assigned to her; that certain credits were due thereon; that the balance remains due and unpaid, and that demand has been made for payment and refused.

The defendants Bertram and Mary Wagner admit the signing and execution of the note, and allege it was part consideration for the purchase of certain real estate in Newport, Kentucky; they deny that the note was purchased for a valuable consideration, or that said note was assigned as alleged; they deny that plaintiff is the legal holder of the note, or that she owned or acquired title to the same before or after maturity; and they further deny that monthly installments have not been paid, or that plaintiff had the right to exercise an option to accelerate the payments or declare the entire balance due, as alleged by plaintiff.

The evidence in chief introduced by plaintiff showed that the note was purchased as alleged; that certain credits were due thereon; that the balance was as alleged; and that no' payments to the knowledge of the agent of plaintiff were received upon the note, other than as credited. It was also brought out that a credit was given upon the note for an amount realized from the sale of property covered by a vendor’s lien securing the note in question. This foreclosure proceeding was had in Kentucky where the property was located. The plaintiff did not testify.

The defense was largely occupied in an attempt to show that the plaintiff was not a bona fide holder for value, and that the Wagners had received no notice of the foreclosure proceedings in Kentucky, where the property for which the note was originally given was sold.

For some strange reason the plaintiff, in rebuttal, proceeded to introduce the papers in the foreclosure proceeding in Kentucky, which developed that a deficiency judgment had been rendered against the owner in possession, being a subsequent grantee of the property originally purchased by the Wagners.

There was no evidence to show that this judgment had not been paid to the plaintiff.

There is no question that the better rule is that a foreclosure proceeding is no bar to a concurrent or successive suit upon a purchase-money note secured by mortgage or vendor’s lien, unless it appears that the note has been paid by a satisfaction of a judgment or through the sale of the property in such proceeding. 19 Ruling Case Law, pages 509 to 512, Sections 305 to 309.

It is also well settled that payment is a substantive defense, and must be pleaded in order to be proved. Worst v. Colonial Savings Bank & Trust Co., 11 Ohio App., 308.

Payment was not alleged or claimed by the defendants.

The trial court, in his instructions to the jury to return a verdict for the defendant, stated: “After consideration the Court has concluded that that motion is well taken. The reason for that conclusion is, that the evidence in this case discloses that the plaintiff in this case was also a plaintiff in the court of Kentucky, and that in that case in Kentucky, she recovered a judgment for the full amount of money which she had coming to her. She then brought suit in the courts of this State. She made no allegation, nor offered any proof, that the judgment which she' obtained in Kentucky had not been fully paid, and if that had been fully paid, or if it is fully paid, she has no cause of action against these- two defendants. Therefore, having failed to make out her case, the Court instructs you in this case in this Court to return a verdict in favor of the defendant:”

This conclusion is evidently based upon the theory that, when the plaintiff produced the proof of a judgment against the owner in possession, who had assumed the note and mortgage, such evidence carried with it a prima facie presumption that the judgment had been satisfied, and calls for proof on the part of the plaintiff that the judgment had not been so paid or satisfied.

We find no authority for such a conclusion, especially where the suit is upon a note and not a judgment, and payment or satisfaction is not offered as a defense, or even claimed by the defendants.

On the contrary, we find that the Supreme Court has decided that the commencement of a joint action against all the makers of an instrument in which process was only served upon a part, and judgment against but one, is no bar to a separate action against one not served with process. The President, Directors and Company of the Clinton Bank of Columbus v. Samuel M. Hart, 5 Ohio St., 34.

It is strenuously contended by the defendants that no process was ever served upon them, and in this contention we acquiesce.

Manifestly if such is the law, the mere appearance of a judgment against an alternative, successive, and assuming obligor in the evidence, even of the plaintiff, cannot result in a bar to the prosecution of an action upon the note against the original maker in another jurisdiction, and particularly so where no service was had upon the maker in the joint action in foreclosure and no deficiency judgment was attempted against the makers. See, also, Wilson v. Taylor’s Executors, 9 Ohio St., 595, 75 Am. Dec., 488; Yoho v. McGovern, 42 Ohio St., 11.

In Avery v. Vansickle, 35 Ohio St., 270, the first, second, and third paragraphs of the syllabus are:

“1. In an action brought under section 28 of the code of civil procedure, as amended March 30, 1874, to subject the separate estate of a married woman to the payment of a promissory note executed by her, neither party is entitled to demand a trial by jury, and hence an appeal lies from the judgment, to the district court.

“2. A judgment in an action to foreclose a mortgage executed by husband and wife, to secure the payment of the wife’s promissory note, constitutes no bar to a subsequent action to subject the separate estate of the wife to the payment of a deficiency arising upon the sale of the property mortgaged.

“3. A judgment against the husband, upon the joint promissory note of himself and wife, does not' merge the right to charge the wife’s separate estate with the payment of the note, in a subsequent action.”

The only apparently contrary authority to our finding here is that of Union Savings & Loan Co. v. Kupetz, 37 Ohio App., 371, 174 N. E., 806. An examination of that case, however, shows that it is easily distinguished upon many points involving a different state of facts, and the statement of law in Pomeroy’s Code Remedies, cited by Judge Sullivan, is not in conflict with the rule stated herein.

We therefore find that the trial court was in error in instructing a verdict for the defendants, and that the judgment must be reversed and a new trial granted. It is so ordered.

Judgment reversed.

Hamilton, P. J., and Cushing, J., concur.  