Ajax Rubber Co. v. A. B. Rothacker, Inc.

114 A. 610, 31 Del. 376, 1 W.W. Harr. 376, 1919 Del. LEXIS 13
CourtSuperior Court of Delaware
DecidedNovember 26, 1919
DocketSummons Case, No. 99
StatusPublished
Cited by1 cases

This text of 114 A. 610 (Ajax Rubber Co. v. A. B. Rothacker, Inc.) is published on Counsel Stack Legal Research, covering Superior Court of Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ajax Rubber Co. v. A. B. Rothacker, Inc., 114 A. 610, 31 Del. 376, 1 W.W. Harr. 376, 1919 Del. LEXIS 13 (Del. Ct. App. 1919).

Opinion

Boyce, J.

(charging the jury).

This is an action of assumpsit on three promissory notes, alleged to have been made by the defendants and delivered to the plaintiff. These notes are in evidence before you and each is dated August 14, 1917. The first is for the sum of $8,290.08, payable September 1st, and the remaining two are each for the sum of $4,145.04, payable respectively October 1st and November 1st following, with interest from August 14, 1917. There is a provision in each of the notes to the effect that, in default of the payment of the first note at maturity, the remaining two should become payable at the option of the payee.

The claim of the plaintiff, in the aggregate, is the sum of $16,580.16, subject to a credit of $817.38, as of August 23, 1917, for goods returned, and a further credit of $3.08 for an overcharge, leaving as a balance due, it is claimed, the sum of $15,756.62, with interest from August 14, 1917.

A negotiable instrument, such as is each of the notes sued upon, imports a consideration, and the plaintiff is not bound to prove consideration, unless misrepresentation or fraud in the execution and delivery of the instrument is relied on. Kennedy v. Murdick, 5 Harr. 263.

The plaintiff, may, in the first instance rely upon the presumption of a consideration. This presumption is, however, rebuttable, and it is open to the defendant to show that the notes sued on were without consideration. In such event, the burden is on the defendant to prove want of consideration.

As between the original parties to a promissory note, fraud or want of consideration may always be shown. Fraud is never presumed, but must be proved by the party alleging it; and it is a question of fact for the determination of the jury under the [382]*382evidence. Clayton v. Calender, 1 Man. 191, 40 Atl. 956; Rogers v. Rogers, 6 Pennewill, 267, 66 Atl. 374.

It has been said that fraud generally includes—

“all willful or intentional acts, omissions or concealments which involve a breach of either legal or equitable duty, trust or confidence, and are injurious to another, by which an undue or unconscientious advantage over another is obtained.” Pom. Eq. Jur. § 873.

Again, fraud has been spoken of—

“as a false representation of fact, made with a knowledge of its falsehood, or in a reckless disregard whether it be true or false, with the intention that it should be acted upon by the complaining party, and actually inducing him to act upon it.” Anson, Contr. 153, 154.

On an issue to ascertain whether or not a bond and warrant of attorney was an act of the defendant, this court said:

“Fraud means deception, artifice, misrepresentation, concealment.” Green v. Maloney, 7 Houst. 22, 30 Atl. 672.

The contention of the defendant is that Emma S. Gam, one of the defendants, is illiterate, unable to read and write, and this fact was known to the plaintiff, or its agents. This court has held that no paper is valid, to charge an illiterate person who can neither read nor write, unless it appear, if the validity of the paper be questioned, that it was honestly and fairly read or explained to him, and was of such a nature that he could understand what it meant. It is, of course, not necessary, in case of such reading or explaining, to show tljat the illiterate person did understand its contents and nature. Green v. Maloney, supra.

These general statements will aid you in following the remainder of this charge, and in reaching your" verdict upon the issues raised in this case.

It is not denied that Emma S. Gam is an illiterate woman, unable to read or write, except her name. She admits signing an agreement of guaranty in evidence before you, which is in the following language:

“In consideration of the sum of one dollar and other valuable considerations, the receipt whereof is hereby acknowledged, the undersigned hereby guarantees the prompt payment of all purchases heretofore made, and that may hereafter be made by A. B. Rothacker Rubber Company, Inc., from the [383]*383Ajax Rubber Company, Inc., up to the amount of $25,000; it being understood that this guaranty shall be a continuing guaranty, and shall remain valid and cover all purchases, until receipt by the Ajax Rubber Company, Inc., of a written notice from the undersigned that this guaranty is terminated

“ The undersigned hereby further consents to, and waives notice of, any extension or extensions of payment that may be hereafter granted by the Ajax Rubber Company, Inc., to the said principal debtor by the acceptance of notes or otherwise, of the payment of the indebtedness which is secured by this guaranty.

“Dated March 23, 1917.

“Emma S. Gam. [L. S.j

‘ ‘ Witness: Hannah Mammele. ’ ’

In a guaranty of this character it is the duty of the person receiving it to notify the guarantor, within a reasonable time, of its acceptance; also the guarantor is entitled to reasonable notice of demand upon the principal debtor for payment of unpaid accounts accrued under the guaranty, and of the nonpayment or default. Such a guaranty when accepted, is an undertaking by one person — called a guarantor — -to another for the payment of the debts of another in case of default.

It is the contention of the defendant that at the time she signed the guaranty it did not contain the figures $25,000, and that they were subsequently inserted without her authority or consent, express or implied, that the guaranty was neither read nor explained to her, and that she was induced by misrepresentation or fraud of an agent of the plaintiff to sign it, in the belief that she was signing an instrument of a different character. If the guaranty was signed in blank, and the figures $25,000 were subsequently inserted by the plaintiff, or its agent, without the consent, either express or implied, of the defendant, or if the guaranty was not fairly read or explained to the defendant, in view of her illiteracy, or read or understood by another acting for her as her agent, upon whom she relied for information in respect to the paper before signing it, or if the defendant was induced by misrepresentation on the part of the plaintiff, or its agent, as to the character of the paper, to sign it, there is no liability upon the guaranty; for under such circumstances, if they existed at the time of the signing of the paper, there would be no meeting of the minds [384]*384of the parties and the guaranty would be invalid, and it would not support a consideration for the notes.

The contention of the plaintiff is that the agreement of. guaranty did, at the time it was signed by the defendant, contain the figures $25,000, and that they were not subsequently inserted by the plaintiff, or an agent acting for it; that no deception, misrepresentation, or concealment on the part of the plaintiff, or its agent, as to the character of the guaranty, was resorted to in procuring the signature of the defendant thereto; and, further, that no repesentative of the plaintiff was present at the time of signing.

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Bluebook (online)
114 A. 610, 31 Del. 376, 1 W.W. Harr. 376, 1919 Del. LEXIS 13, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ajax-rubber-co-v-a-b-rothacker-inc-delsuperct-1919.