Opinion
No. A 85328.
1948-01-13
TYLER et al. v. THOMAS et al.
S. F. Komito, of Cleveland, for plaintiffs. Wyner & Wyner, of Cleveland, for defendants.
Action on a promissory note by Robert Tyler and another doing business as Monarch Construction Company, against Horace Thomas and another.
Judgment for defendants.S. F. Komito, of Cleveland, for plaintiffs.Wyner & Wyner, of Cleveland, for defendants.
DRUCKER, Judge.
Defendants, husband and wife, signed a contract with plaintiffs for the installation of a furnace at their home within five days. Plaintiff's salesman represented that immediate delivery could be made, and at the time of signing the contract secured defendant's signatures on other papers which he represented to be part of the job order, and required by government regulations. One of the provisions of the contract was that $225.00 was to be paid on completion of the work and the balance to be paid in monthly installments thereafter. Plaintiff did not install the furnace as agreed and defendants telephoned plaintiff repeatedly requesting installation. At the end of one month defendant notified plaintiff that they were cancelling the contract.
Plaintiff subsequently took judgment on a cognovit note in the amount of $225.00. On motion of defendants the judgment on the cognovit note was vacated, and defendants filed their answer denying that they had executed the alleged promissory note, and alleging also that if their signatures were secured on the note that the signatures were secured by fraud, denying further that there was any consideration for the note, and alleging that plaintiff failed to perform under the contract.
Defendants testified that their signatures on the alleged note were genuine, but they never intended to sign a note. Their first information thereof was when plaintiff's attorney notified them that a judgment had been taken. They further testified that plaintiff's saleman had held a sheaf of papers in his hand at the time and procured their signatures thereto by representing to them that the papers were part of the job order and papers required by government regulations. They further testified that time was of the essence in signing the contract and that they had signed the papers on the representation that plaintiff could make immediate delivery of the furnace since their home was without heat. Further, that at the end of one month, the furnace had still not been delivered by plaintiff although defendants repeatedly called plaintiff requesting delivery, and that they finally notified plaintiff that they considered the contract breached and cancelled. The salesman did not testify and the only witness for plaintiff was one of the principals who testified that plaintiff was the holder of the note.
It is undisputed that a judgment obtained under a warrant of attorney to confess a judgment can be vacated or modified where the affidavit in support of the motion to vacate shows good defense.
It is also necessary that there be sufficient evidence to support a claim for a valid defense which if proved would not have warranted the judgment entered against the defendant and which shows such facts as would reasonably excuse him under the statute for failing to respond to the summons or the time set for the trial in court. Consolidated Press & Printing Company v. Leibowitz, 27 O.L.A. 10.
Bliss v. Smith, 1926, 24 Ohio App. 366, 156 N.E. 618, held: ‘Where plaintiff took a judgment on a cognovit note, court was authorized to vacate and suspend judgment and give defendant opportunity to tender answer and file same, if it contained a defense in law, and have case heard on merits.’
Huntington & McIntyre v. Finch, 1854, 3 Ohio St. 445. Here the note containing a warrant of attorney to confess judgment was materially altered, and the court said: ‘A judgment may be set aside on motion at a term subsequent to the judgment term for irregularity or improper conduct in procuring it to be entered’.
In this case the defendant contended that he did not understand that he was signing a note nor did he intend to do so and that he did not read what purported to be a note. The Court takes the view ‘that one can defend the signature of a contract on the ground that he did not read it when the neglect to read has been induced by some strategy resorted to by the party now attempting to enforce the contract.’
International Transport Ass'n v. Bylenga, 1931, 254 Mich. 236, 236 N.W. 771.An ordinary letter which the average business man would have signed had an offer to advertise the signer's business ‘boxed in’ at the top of the page.
Schupp v. Davey Tree Expert Co., 1926, 235 Mich. 268, 209 N.W. 85, 86. Plaintiff was told that what he was signing was merely a memo for the home office but in fact was a contract for 200 hours of labor at $1.80 per hour. Here the court said: ‘The fraud worked because plaintiff was careless, but this did not render it any less a fraud.’ Ohio is in line with this rule.
1. City View Apartments & Storage Co. v. Neiss, Ohio App., 1926, 154 N.E. 161, not reported in State reports. The defendant signed a corporation subscription agreement under the misrepresentation that it was a list of prospective subscribers, and the court held: ‘Signature obtained by fraud is not binding, even though party signing did not read or request other to read instrument to him.’ Waller's Adm'r, v. Robinson, 1858, 2 Ohio Dec. Reprint 16. The defendant made a representation that the agreement Waller signed contained a complete list of the creditors, when he (defendant) knew one was omitted. Held: The signer can escape this by showing the fraud. State Savings & Trust Co. v. Grady, 1923, 20 Ohio App. 385, 153 N.E. 238. Sureties, induced to sign a cognovit note by misrepresentations, were not held liable thereon. Perry v. M. O'Neil & Co., 1908, 78 Ohio St. 200, 85 N.E. 41. Where the release of a personal injury claim is procured by fraud, such as misreading, or the secret substitution of one paper for another, or obtaining by some trick or device an instrument the signer did not intend to give, such a release is void.
2. Michelin Tire Co. v. Farrell, 1932, 12 O.L.A. 450. Plaintiff's agent told the defendant that she (defendant) was a partner in her (defendant's) husband's business, and thereby induced the defendant to sign a guaranty of her husband's debt misrepresented to be an instrument relieving her of liability in her husband's business. Held: A person electing to sign an instrument without reading the same may not thereafter predicate a defense of no liability on such contract by claiming that misrepre-sentations were made which induced the signing of the contract, and that she was defrauded by being so induced to sign.
We quote from Page on Contracts, Section 234, ‘Contracts held Valid’. ‘In a number of cases, however, the courts have permitted the party who has been guilty of a successful fraud to reap the reward of his iniquity on the theory that the negligence of the innocent party, and his willingness to trust the party who is guilty of the fraud should put the innocent party outside the protection of the law in enforcing the contract * * *’. But on page 357, Sec. 235, Page says: ‘In many of these cases the court probably felt it was very doubtful that a fraudulent statement was made and relied on, and so resorted to this rule of law to meet a finding of fact which it could not set aside * * *. No justification of any kind can be found, however, for upholding a contract on the ground that a party thereto has gone through the form of signing and delivering it while he believes it to be an instrument embodying a different transaction, and the adversary party created such a belief by his fraudulent statements, and is taking advantage of it. We have long since passed the state in which the outward form is the only thing to be regarded.’
The case Page cites as indicating the rule in Ohio is McAdams v. McAdams, 1909, 80 Ohio St. 232, 88 N.E. 542, a case wherein a fiduciary relationship was suspected, and there seemed to be no misrepresentation. The court in the Michelin case itself says: ‘The above (McAdams case) as it will be observed is not precisely upon the proposition’.
Under the McAdams case the court cites Upton Assignee v. Tribilcock, 1875, 91 U.S. 45, 23 L.Ed 203, which also deals with mere failure to read and no misrepresentation.
The court also concluded that in the facts here presented it was apparent that the time at which the note was signed was inconsistent with the terms of the agreement. It was quite obvious that this conflict in the elements of time helps support the theory of fraudulent misrepresentation.
The contract provides further that ‘All previous conversation (s) are merged in this instrument’, necessarily makes the time limit part of the contract. This being so, the time limit is an express stipulation of the parties. 3 Williston on Contracts (Williston & Thompson Revised Ed. 1936) Sec. 849. ‘Time is not ordinarily of essence in building contracts, but can be made so by express stipulation, or by circumstances showing that any delay deprives the work of value’. Time has been held of essence in all contracts at law in the following Ohio cases: Zeidman v. Davis, 1929, 37 Ohio App. 418, 174 N.E. 790;Cornell v. McClain's Heirs, 1859, 3 Ohio Dec. Reprint 187. ‘At law in all cases time is of essence of the contract, and a party in default has no remedy.’ (Emphasis ours.) Helmes v. K. & M. Realty Co., 1931, 41 Ohio App. 322, 180 N.E. 210, 211: ‘In an action at law, as this is, time is of the essence of the contract.’ Johnson v. Slaymaker, 1898, 18 Ohio Cir.Ct.R. 104,9 Ohio Cir.Dec. 500. ‘Where a contractor agrees to build a house within a certain specified time he is bound to do so, unless he is prevented by the plaintiff or unavoidable casualties intervene. He was the judge when he entered into such contract as to the time in which he could perform it, and if he agreed to difficult or inconvenient obligations, a court of law cannot relieve him of the consequences of his erroneous judgment. He is bound to perform the contract within the time named in it, and if he does not complete the house on the day named, the plaintiff has a right to say to him he should no longer continue the work, and stop him from completing the contract.’ If the contractor doesn't complete within the time specfied, the party harmed ‘Has a right and should be entitled to recover in such case, damages for the delay in completion of the building, and also damages or loss, if any, occasioned by his being required to complete the building’. Kirby v. Harrison, 1853, 2 Ohio St. 326, 59 Am.Dec. 677. ‘Time may be made of the essence of the contract by express stipulation of the parties, or without such express agreement, by the nature of the contract itself, or by the circumstances under which it was made.’ Mowry v. Kirk, 1869, 19 Ohio St. 375; Williston on Contracts, supra.
The court therefore concludes that the defendant had a meritorious defense and that the plaintiff failed to comply with the time limitation as stipulated in the contract and further that there was a failure of consideration for the terms of the defendant to pay.
Finding for the defendant.