
    Moormann v. Voss.
    
      Certain sureties may require creditors to sue• — Section 5833, Revised Statutes — Must be strict compliance with statute — Notice to ' husband of creditor is insufficient.
    
    A person bound as surety in a written instrument for the payment of money, who would avail himself of the defense of having given notice to sue, under Section 5833, Revised Statutes, must show a strict compliance with the requirements of said section. And where the creditor is a married woman, a notice by the surety directed to and served upon her husband, demanding that he bring suit thereon forthwith is insufficient, although such, notice be communicated and exhibited by the husband to his wife.
    (No. 10131
    Decided December 3, 1907.)
    Error to the Superior Court of Cincinnati in general term.
    On May 23, 1901, the plaintiff in error, Rose F. Moormann, commenced an action in the Superior Court of Cincinnati against the defendants in error, John FI. Voss and Robert A. Moormann, to recover a balance of $2,161.18, which she alleged was due her from said Voss and Moormann, on a certain promissory note of which, omitting the indorsements thereon, the following is a copy:
    “$2,950.90. Cincinnati, May 11, 1896.
    “Six months after date we, or either of us, promise to pay to the order of William D. Grote, two thousand, nine hundred and fifty dollars, at S. Kuhn & Sons’ Bank. Value received. Interest at the rate of six per cent, per annum.
    “Robert A. Moormann,
    “J. H. Voss.”
    
      Her petition, which was in the short form authorized by Section 5086, Revised Statutes, contained the averment that she was the owner and holder of said note, and became such, for value, before maturity. To this petition the defendant/ John H. Voss, filed an answer in which he admitted the making and execution of the-note sued on, but denied each and every other allegation in plaintiff’s petition contained. And by way of further and affirmative defense alleged “that if it be true that the plaintiff is the owner and holder of said note, and was such owner and holder at the times stated in plaintiff’s petition, then Frank J. Moormann, husband of the plaintiff, acted as agent for the plaintiff, and as such received payment thereon at divers times, which payments were credited by said Frank J. Moormann upon said note as set out in the plaintiff’s petition.
    “Defendant further states that he signed said note merely for the accommodation of his comaker, Robert A. Moormann, and as surety for Robert A.-Moormann, and that on the 24th day of November, 1900, he deposited in the mail addressed to Frank J. Moormann, Esq., at his place of residence, which is also the place of residence of the plaintiff herein, the following notice, to-wit:
    “Cincinnati, November 17, 1900.
    “Frank J. Moormann, Esq.,
    “Moormann Avenue, Walnut Hills,
    “Cincinnati, Ohio.
    “Dear Sir: — You are the holder of a certain promissory note dated on or about the-day of June, 1896, and due in six months after date, payable to the order of William D. Grote, for the sum of about twenty-six hundred dollars ($2,600), signed by Robert A. Moormann and John H. Voss. Robert A. Moormann is the principal debtor on said note and I am merely as surety.
    “You are, therefore, hereby notified to commence an action on said note forthwith against Robert A. Moormann, the principal debtor, and unless you do commence such action within reasonable time and proceed with due diligence in the ordinary course of law to recover a judgment against Robert A. Moormann for the amount due on said note and to make by execution the amount thereof, you shall thereby forfeit any right which you would otherwise have to demand and receive of me the amount due thereon.
    “Yours very truly,
    “John H. Voss.”
    That said notice was received by said Frank J. Moormann in the regular course' of mail and its contents communicated to the plaintiff herein.
    Defendant further says that notwithstanding the requirements of said notice, plaintiff neglected to bring an action upon said note as required by said notice until the 23d day of May, 1901.
    To this answer Rose F. Moormann filed the following reply:
    “Now comes the plaintiff, and for reply to the answer of the defendant, John H. Voss, says that she denies that Frank J. Moormann, her husband, acted as her agent or had authority to act as her agent generally or in receiving the notice set forth in the answer.
    “Plaintiff further says that she has no knowledge and therefore denies that the defendant, John H. Voss, signed the note merely for the accommodation of his co-maker, Robert A. Moormann, and as surety for Robert A. Moormann. She further says that at the time when she purchased said note she had no knowledge or notice of any claim on the part of the defendant, John H. Voss, that he was a surety upon said note or had signed the same for the accommodation of the said Robert A. Moormann, and that she purchased the note as the joint note of both the makers thereof and looking for payment of the note to both and each of them. Plaintiff admits that the contents of the note set forth in the answer were communicated to her by her husband sometime after the receipt thereof but says that she paid no attention to same because it was not addressed to her and she understood and was advised that it was not a legal notice requiring her to act. Plaintiff further denies every other allegation in said answer not herein or in her original petition admitted and prays as in her original petition.”
    Thereafter, to-wit on January 20, 1904, John H. Voss, by leave of court, filed what is denominated in the record an “Additional Answer,” pleading payment of said note in full. Rose F. Moormann, by “Additional Reply,” denied such payment. The defendant, Robert A. Moormann, filed no answer and made no defense. Upon the trial of the cause in special term, the superior court refused to permit the defendant, John H. Voss, to give in evidence to the jury the notice of November 17, 1900, directed and mailed to Frank J. Moormann, for the reason, as stated by the court, that the same was not a notice to Rose F. Moormann, the creditor. And in the charge, the court instructed the jury touching this matter as follows: “Since there is no evidence that notice as required by law was given to her as principal creditor, I charge you that even were you to find defendant, Voss, to be a surety — one who signed for accommodation merely — he would under the circumstances in this case, still be liable, provided you find plaintiff purchased said note for value without notice and before maturity.” The jury returned a general verdict in favor of the plaintiff and against both defendants for the full amount claimed. A motion for a new trial was filed by John H. Voss, assigning as grounds therefor: 1. “The verdict is contrary to law and is against the law.” 2. “The verdict is against the weight of the evidence.” 3. “The court erred in the admission of evidence offered by the plaintiff and objected to by the defendant.” 4. “The court erred in the rejection of evidence offered by the defendant, to which the defendant duly excepted.” 5. “The court erred in its charge to the jury.” This motion was overruled by the court, and judgment was thereupon entered on the verdict. Proper exceptions were saved throughout. On petition in error to the general term of the superior court, the judgment against John H. Voss was, by that court, reversed, and the following entry was made in said cause:
    “This cause came on to be heard upon the petition in error, the original papers and pleadings from the Superior Court of Cincinnati in special term, was argued by counsel and submitted to the court. On consideration whereof the court finds that there is error apparent on the record, in the proceedings of said court to the prejudice of the plaintiff in error, in this, to-wit: In holding and deciding that the written notice mailed to Frank J. Moormann, requiring him to sue upon .the note described in the petition, was not a sufficient notice to the defendant in error, Rose F. Moormann, under Section 5833, Revised Statutes of Ohioj although the said Frank J. Moormann was the husband and had been acting as the agent of the said Rose F. Moormann, and showed said notice to the said Rose F. Moormann within a short time after its receipt; and in the rulings of the court upon the evidence, and the charge of the court to the jury involving this proposition.”
    The court further finds that it is unnecessary to consider the other errors assigned in the petition in error and does not consider them.
    Wherefore, it is considered by the court that the judgment rendered by the court in special term, in so far as the same purports to be a judgment against the plaintiff in error, be, and the same is hereby reversed and held for naught. To all of which the defendant in error, Rose F. Moormann, excepts.
    And the court further finding that the facts as to said notice are shown by undisputed testimony, and proceeding to render such judgment as such court in special term should have rendered, it is considered that the defendant in error, Rose F. Moormann, is not entitled to recover anything from the plaintiff in error, John H. Voss; that the petition of said Rose F. Moormann, plaintiff below, be dismissed as to the plaintiff in error, John H. Voss, defendant below; and that the said plaintiff in error recover from the defendant in error, Rose F. Moormann, his costs herein and in the court below expended. To all of which the said Rose F. Moormann now excepts.
    Rose F. Moormann now prosecutes error in this court, asking that the judgment of the general term of the superior court be reversed, and that of the special term be affirmed.
    
      Messrs. Stephens, Lincoln & Stephens and Frank J. Moormann, for plaintiff in error.
    We are restricted to an interpretation of Section 5833, Revised Statutes. Its language would seem to be clear and unambiguous. It requires a written notice to the creditor, requiring him to commence an action forthwith against the principal debtor. A notice to anyone else than the creditor is not sufficient. The notice, in this case, was addressed’ to Frank J. Moormann, not as agent or attorney, but personally, and required him, as the holder of the note in suit, to bring an action. There is not one word in it of request, warning or command intended for or addressed to the plaintiff.
    It has been universally held that such statutes as Section 5833 should be strictly construed. Clark v. Osborn, 41 Ohio St., 28; Baker et al., Admrs. v. Kellogg et al., 29 Ohio St., 663.
    A notice to an agent or a husband, requiring him to sue, is not a compliance with the statute, though communicated to the real party in interest. This has been repeatedly held by the courts of sister states under similar statutes. Cummins v. Garretson, 15 Ark., 132; Driskill v. Commission
      
      ers, 53 Ind., 533; Davis, Admr., v. Snead et al., 33 Grattan, 705; Shimer v. Jones, 47 Pa. St., 268; Bartlett v. Cunningham, 85 Ill., 22; Sapington v. Jeffries, 15 Mo., 628; Coykendall v. Constable, 48 Hun, 360; Pingrey on Suretyship, Section 145; 2 Brandt on Suretyship, Section 773; 27 Am. & Eng. Ency. Law, 513.
    The following have been held to be insufficient: A notice addressed to the trustees of a bank, delivered. to their clerk and communicated by him to one or more of the parties in interest. Adams et al. v. Roane et al., 7 Ark., 360.
    A notice addressed to and served upon one of two administrator’s obligees. Kelley v. Matthews, 5 Ark., 223.
    A notice addressed to the treasurer of the trustees of schools, where the loan was made by the' treasurer for the trustees, and the note made to them. Trustees v. Southard et al., 31 Ill. App., 359.
    Under a statute providing for a notice to the creditor to sue or permit the surety to do so, a notice simply requiring the creditor to sue is not sufficient. Hill v. Sherman et al., 15 Ia., 365.
    
      Mr. Denis F. Cash, for defendant in error.
    We take it to be well established, both at law and equity, that notice to the agent in relation to the business for which he is employed, is notice to the corporation, the principal. Bank v. Mumford, 6 Ga., 44; Plate Co. v. Flory, 44 Ohio St., 430.
    There is no reason why this rule should not apply to a natural person as well as to a corporation. More particularly so in a case where the principal and the fact of agency is undisclosed and where one who is really an agent, acts as principal with the knowledge and approval of the real principal. Wetzel v. Sponsler’s Exrs., 18 Pa. St., 460; Thomas v. Mann, 28 Pa. St., 520; McCoy v. Lockwood, 71 Ind., 319; McCrary v. King et al., 27 Ga., 26.
    Counsel seem to base their whole argument upon the theory that Section 5833, Revised Statutes, is to be strictly construed. This is contrary to the express provision of Section 4948, Revised Statutes, which applies to the whole of Part 3 of the Revised Statutes, of which Section 5833 is a part.
    While this provision of our statutes has not been adverted to by our supreme court, in cases of this kind, an examination of the cases decided will show that the court was mindful of its provisions in holding that substantial compliance is sufficient. Plumley v. Bellard, 36 W. L. B., 330; Baker et al., Admrs., v. Kellogg et al., 29 Ohio St., 663; Iliff v. Meymouth, 40 Ohio St., 101.
   Crew, J.

It clearly and affirmatively appearing from the record herein, that the only matter considered or adjudicated in this case by the superior court in general term, was that of the sufficiency of the notice given by John PT. Voss as surety, it follows that our present' inquiry must be limited to a consideration of the propriety and correctness of the judgment of the superior court in that behalf. John H. Voss, as surety, claimed to be discharged and released from all liability upon the note in suit, by reason of the delay of Rose F. Moormann to commence an action thereon within a reasonable time after the service of notice upon her husband, Frank J. Moormann, requesting him to bring suit thereon, forthwith, against Robert A. Moormann, the principal debtor. There is no dispute in this case as to the form of the notice, and no claim is made that it was intended for, or addressed to, Rose F. Moormann, the creditor, although it is'admitted that the contents of said notice were communicated to her by her husband. Section 5833, Revised Statutes, provides as follows: “A person bound as surety in a written instrument for the payment of money, or other valuable thing, may, if a right of action accrue thereon, require his. creditor, by notice in writing, to commence an action on such instrument forthwith, against the principal debtor; and unless the creditor commence such action' within a reasonable time thereafter, and proceed with due diligence, in the ordinary course of law, to recover judgment against the principal debtor for the money or other valuable thing due thereby, and to make, by execution, the amount thereof, the creditor, or the assignee of such instrument, so failing to comply with the requisition of such surety, shall thereby forfeit the right which he would otherwise have to demand and receive of such surety the amount due-thereon.” Inasmuch as this statute is clearly in derogation of the common law, and in terms provides a forfeiture of the right of action against the surety where the creditor disregards the notice to sue; in accordance with established rules of interpretation, the statute should not be extended beyond its plain terms, and the remedy thereby afforded should be strictly pursued. In Baker v. Kellogg, 29 Ohio St., 665, this court said: “In view of the fact that the statute provides for the release of a party from a fixed legal liability-— from the payment of a debt which he justly ow.es— its' requirements should be at least substantially, if not strictly and literally complied with.” In Clark v. Osborn, 41 Ohio St., 36, the court, speaking of this statute, says: “The statute,' in a sense, is a part of the contract. The suretyship is accepted with knowledge of its terms. It gives rights to both parties. The right of the creditor is to disregard with impunity any notice not in strict conformity to its terms. This is his privilege, and concerns him alone, and is unaffected by considerations of public policy.” These authorities alone, upon the conceded or undisputed facts, are, we think, decisive of the present case. However, as examination discloses that like holdings have been made under similar statutes, by courts of last resort in other states, we call attention briefly to the following additional decisions: In Driskill v. Board of Commissioners, 53 Ind., 532, the appellee, as creditor and obligee, •had sued the appellant and one Daniel B. Driskill, as obligors on a penal bond. As a defense appellant pleaded in the second paragraph of his answer, that after said bond became due he notified Fred L. Prow, the attorney of the appellee, in writing, that he was only surety for the co-defendant, Daniel B. Driskill, and directed said attorney to institute proceedings at once upon said bond for its collection, and that he would stand responsible no longer. To this answer the appellee demurred, and his demurrer was sustained by the lower court. Upon appeal to the supreme court, that court, in considering and commenting upon the sufficiency of this answer, said:

“It is evident that the appellant, in this second paragraph of his answer, has attempted to frame a defense to the action which would be good under the requirements of Sections 672 and 673, of our practice act.
“Section 672 provides as follows: ‘Any person bound as surety upon any contract in writing for the payment of money, or the performance of any act, when the right of action has accrued, may require, by notice in writing, the creditor or obligee forthwith to institute an action upon the contract.’ 2 Revised Statutes, 1876, p. 276.
“In the paragraph of appellant’s answer now under consideration, the written notice did not require the creditor or obligee in the bond sued on to institute an action upon the contract; but instead thereof, the notice mentioned in this paragraph was to Fred L. Prow, who is described as the appellee’s attorney, and directed him, and not the appellee, to institute proceedings on the bond. It is clear, we think, that the written notice described in this paragraph of the answer is not such a notice as the section quoted requires to be given. The remedy given by Sections 672 and 673 of our code of practice to sureties upon written contracts is purely a statutory remedy, and has never been regarded, in this state, as a part of the common law. Halstead v. Brown, 17 Ind., 202. The surety who desires to avail himself of this remedy must do just what Section 672, in plain terms, requires him to do; he must, by written notice, require the creditor or obligee to institute an action upon the contract. In our opinion, the notice in this case was clearly insufficient, and, therefore, the demurrer to the second paragraph of the answer was properly sustained.”

In Davis, Admr., v. Snead et al., 33 Grattan, 705, the Supreme Court of Appeals of Virginia, reviewing the statute of that state relating to sureties, passed in 1873 — which statute, in its provisions, is substantially the same as Section 5833 of the Ohio Statutes — says: “This statute is substantially the same as that of 1794 found in the Revised Code, 1819, page 461.” * * * “This statute of 1794 was the first enactment ever adopted in Virginia, authorizing notice by a surety to a creditor to sue, and imposing upon the latter a forfeiture of all claims against the surety as a consequence of his failure to comply with the requisition. * ' * *

“It will be observed that both by the act of 1794, and the present statute, the notice must be given to the creditor himself, and in the event of his death, to his personal representative. Under various provisions contained in the code, proceedings may be instituted against a creditor or other persons by notice to his agent or attorney. But under the statute we are now considering, no such indulgence is allowed. The reason is obvious. The statute is very stringent in its operation. The effect of the failure to sue after notice is an absolute forfeiture of all claims against every surety upon the bond, or other instrument. It is to such surety an absolute extinguishment of the debt. It was therefore wisely provided, that the notice should be given to the creditor himself, and him only; and the release of the surety should be the result of the creditor’s act and his only.” In Bartlett v. Cunningham, 85 Ill., 22, the third clause of the syllabus is as follows: “To release a surety under the statute, proof must be made of a notice in writing by him to the holder of the obligation, to put the same in suit, and a refusal or neglect to do so. Proof of the delivery ■ of such notice to an agent of the holder,’ and that the agent told the holder of the fact, is not sufr ficient.” In Hill v. Sherman et al., 15 Ia., 365, we find the following syllabus: “A surety seeking to discharge himself from liability on a promissory note, in the method provided by chapter 75 of the revision of i860, must comply fully with the requirements of the statute.” Like holdings are made, and a like principle and rule announced, in the following cases: Cummins & Fenno v. Garretson, 15 Ark., 132; England v. McKamey, 4 Sneed, 75; Gillian v. Luddington, 6 W. Va., 128; Coykendall v. Constable, 48 Hun, 360; Sapington v. Jeffries, 15 Mo., 628; Hunt v. Purdy et al., 82 N. Y., 486; Shimer v. Jones, 47 Pa. St., 268. Not a single authority was cited by the superior court in general term in support of its finding, that the notice in question was, under the statute, because communicated to her, a sufficient notice to Rose F. Moormann. And none of the authorities cited here by counsel for defendant in error support that proposition. The plain requirement of the statute is, that the notice shall be given to the creditor, that is, to the person to whom the debt is owing, and who has the present right to institute suit on the instrument, to recover the amount due. As no one else can forgive or release the debt, so also, no one else can, without his consent, involve the creditor in a forfeiture of his right of action against the surety. In the present case it is neither averred nor proved, that Frank J. Moormann was constituted the agent of Rose F. Moormann, the creditor, to accept and receive for her, this notice and it is not claimed that he was constituted the agent of John H. Voss, to deliver said notice to her. As we have seen, the name of Rose F. Moormann, does not appear in said notice. The notice was addressed to, and was intended for Frank J. Moormann, her husband, who was treated by Voss, the surety, as the real owner of said note. The notice — which was sufficient in form — was therefore, simply given to, and served on, the wrong party; and the mere fact that Frank J. Moormann thereafter communicated or exhibited such notice to his wife, would not affect, much less extinguish, her right of action against the surety. And especially should this be so where, as in the present case, at the time of exhibiting the notice to her he, being an attorney at law, then advised her that the same was not a notice to her, and that she need pay no attention to it whatever. For the reasons above stated, and upon the principles established by the foregoing authorities, we think it clear, that the notice to Frank J. Moormann was not binding upon Rose F. Moormann, the creditor, but that as to her, such notice was a mere nullity. It follows that the judgment of the superior court in general term, finding that said notice was sufficient, and was effective to release and discharge the surety, John H. Voss, from all liability on the note in suit, was erroneous, and must be reversed. And it affirmatively appearing from the record in this case that the superior court in general term did not consider or pass upon all the assignments of error in the petition in error in that court, one of which was that the judgment of the trial court was against the weight of the evidence, the cause will be remanded to said superior court in general term, with instructions to consider and pass- upon all the errors assigned.

Judgment reversed and cause remanded.

Shauck, C. J., Price, Summers and Spear, JJ-, concur.  