Carter v. Jennings

• Decision Date: 28 January 1924
• Docket Number: 23406
• Citation: 134 Miss. 263,98 So. 687
• Court: Mississippi Supreme Court
• Parties: CARTER v. JENNINGS

98 So. 687

134 Miss. 263

CARTER v. JENNINGS

No. 23406

Supreme Court of Mississippi

January 28, 1924

Division B

APPEAL from circuit court of Panola county, First District, HON GREEK L. RICE, Judge.

Suit by I. E. Jennings against J. A. Carter, administrator, and another. From a judgment for plaintiff, the named defendant appeals. Reversed, and judgment rendered.

Judgment reversed.

Rainwater & Stovall, for appellant.

It is a well-established principle of pleading that whatever is necessary in order to entitle the plaintiff to recover must be averred in the declaration, so that the question now before the court is, was it necessary for plaintiff to prove demand and notice in order to hold a party secondarily liable. We maintain there can be no recovery without proof on the part of plaintiff that demand was made upon the payor and a refusal or failure on his part to pay, and due notice given within a reasonable time of such failure or refusal to the endorser, and that he would be held liable as endorser. There is no such averment in the declaration of any demand on Tup Hall or notice to Archie Harris, and we therefore insist that under the well-known rules of pleading, and the great weight of authorities the demurrer should have been sustained. Cook v. Martin, 5 S. and M. 393; 8 Cowan 271; United States Bank v. Smith, 11 Wheaton, 174.

Where no place of payment is fixed, and the note is a demand note, the rule seems to be universal that proof of demand and notice must be made in order to hold the endorser. Hall v. The First Bank of Crossville, 72 So. 172, 3 R. C. L., section 440, page 1218.

If the rule were otherwise it would place a burden upon the defendant when sued as endorser to prove a negative and to carry a burden which should not be imposed upon him.

There is no rule of law better settled than that a note endorsed after it becomes due is a demand note, and that prompt demand must be made upon the principal debtor, and upon case of failure to pay due notice thereof must be given to the endorser within a reasonable time thereafter. And unless such demand and notice is given the endorser is discharged. See Negotiable Instrument Law, Acts, 1916, page 368, Article VII "Notice of Dishonor;" Harkins v. Shields, 100 Miss. 747-48-49; Bowling v. Arthur, 34 Miss. 54; 3 R. C. L. 1223 and 1226, sections 446-448; 2 Am. and Eng. Ency. of Law, (1 Ed.), 407; 7 Cyc. 1070-71, par. B; Graul v. Strutzel, 36 Am. Rep. 250; Beer v. Clifton, 35 Am. St. Rep. 174; Colt v. Bernard, 29 Am. Dec. 584; Poole v. Tolleston, 10 Am. Dec. 663; Jones v. Robinson, 54 Am. Dec. 216.

A demand upon the principal debtor is just as essential as the notice to the endorser. There is no proof in the record tending to show any demand was ever made upon the principal defendant here. On the contrary he stated most positively that no demand was ever made upon him to pay the Archie Harris note, and nothing ever said to him in reference to payment.

The rule as laid down by practically all the authorities is that where a note is payable on a fixed date, demand must be made on that date, and where it is a demand note, presentment and demand for payment must be made upon the principal debtor promptly, or within a reasonable time, and immediate notice given to the party secondarily liable in order to charge him. Negotiable Instrument Law, Acts 1916, 366, secs. 70-71; 7 Cyc. 962-963; 3 R. C. L. 1191, sec. 413; Jones v. Robinson, 54 Am. Dec. 212; Smith v. Gibbs, 2 S. and M. 479.

Instead of pursuing the principal debtor by making prompt demand upon him, as he should have done, he contents himself by holding on to all the property under his trust deed, making no demand and giving no notice to the endorser that he was holding him liable, for about four months, and until death had sealed the lips of Archie Harris, and then proceeds to exact payment from his estate.

We desire to call the attention of the court to Nash v. Harrington, 16 Am. Dec. 674; Benjamin Fortner v. Parham & Gibson, et al., 2 S. and M. 151; Planters Bank v. Downs et al., 1 S. and M. 261.

While some of the authorities hold that there must be a consideration for the extension of time, our Negotiable Instruments Law does not require a consideration. Negotiable Instruments Law, Acts 1916, 372, sec. 6; 21 R. C. L. 1018, sec. 66; Powell v. Tomlinson, 92 So. 226.

The court in this case also holds that a sub-tenant, by reason of the liability of his crops to such lien, occupies the relation of a mere surety for the debt due by the original tenant to the landlord. An endorser of a promissory note occupies the relation of a mere surety, and it seems that the case above cited is on all fours with the case at bar.

Montgomery & McClure, for appellee.

Appellant's counsel cite numerous cases holding that an endorsee of overdue paper is not excused from making a demand in a reasonable time, of the maker, and giving notice of the dishonor of the paper to the endorser in order to charge him under the law; that, therefore, appellee must allege these facts in his declaration and prove them. We frankly admit that a majority of the courts so hold, and therefore shall not undertake to answer the cases cited by appellant on this proposition.

But at the time this demurrer was heard by the lower court, on this question, the case of Taylor v. Ross, 92 So. (Miss.), 637, had just appeared. We earnestly submit that this appellee made the proof in the same manner as if this burden was originally placed on him by the declaration, and appellant could not have been prejudiced thereby.

Now in view of the proof set out by the plaintiff, how was the appellant prejudiced by the court below in overruling his demurrer on these grounds. The plaintiff made the proof in the same manner as if the declaration alleged these issues and it did not prejudice the appellant's rights in the slightest degree.

This court has held in the case of Planters Lumber Company v. Sibley, 93 So. 440 that: "In passing on a ruling of a lower court, the supreme court will look to the whole record, and if in the light thereof no harm appears to have resulted to the appellant from the ruling complained of, the judgment will be affirmed, even though the ruling may have been erroneous when made."

We refer the court to the following cases in relation to this point: Houston v. Smythe, 66 Miss. 118; 5 So. 520; Insurance Co. v. Jones, 49 Miss. 80; Insurance Co. v. Francis, 52 Miss. 547; A. and V. Ry. Co. v. Brooks, 69 Miss. 168; Montgomery v. Dillingham, 3 S. and M. 647; Kehlar Flour Mills v. Reeves Grocery, 113 M. 30. But did the court commit any error on this account?

The decisions of the various states are in hopeless conflict. Our N. I. L., section 7, declares that an overdue note, so endorsed, is as regards the person so issuing, accepting or endorsing it, payable on demand. Some courts have held that demand paper, without making reference to whether such paper is a note written payable on demand, or a bill of exchange payable on demand, as regards one that is overdue and made demand paper by law, that an endorser on the same, in order to be charged with payment, has a right to demand on the maker notice of dishonor.

Others have held it is settled that the endorser of an overdue note has as much right to demand and notice as the endorser of a note has before maturity, the only difference being as to the time when the demand and notice must be made and given. We are not prepared to say that the weight of authority does not so hold, and in frankness to this court we make this statement.

Still other cases have announced the doctrine with much force and reason that the endorser of a note after its maturity is absolutely liable thereon, without regard to any right to have a demand made upon the maker, and notice to the endorser on non-payment. We recommend this line of decisions to this court, and if the same be adopted by you, then the court correctly sustained this demurrer.

The following courts so hold: Chadwick v. Jeffers, 1 Rich L. (S. C.) 397; 44 Am. Dec. 260; Nash v. Harrington, 2 Aikens (Vt.) 9, 16 Am. Dec. 697; W. S. Merril Co. v. Roth, 152 N.Y.S. 368; Havelin v. Continental Nat. Bank, 161 S.W. 743.

On this proposition the following cases hold that an endorser who endorses overdue paper is deemed and treated as a joint maker of the note, and for this reason becomes primarily liable thereon, and demand and notice of dishonor is not necessary. Bishop v. Dexter, 2 Conn. 419; Mudd v. Harper, 1 Md. 110. We are not unmindful of the Shields-Hawkins case, 100 Miss. 739, and this court's holding therein.

We agree with counsel for appellant that under the law a promissory note endorsed after maturity is demand paper, but disagree with them on the broad principles laid down by them that demand must be made promptly in all cases, and unless demand be made and notice is given to the endorser, that he is discharged. Section 2649, Hemingway's Code; Section 2771, Hemingway's Code; Section 81 of The N. I. L.; Section 82 of The N. I. L.; Section 112 of The N. I. L.; Section 113 of The N. I. L.

Counsel for appellant argue in their brief that demand was not made on the maker, Tup Hall, and therefore it was impossible to give notice to the endorser of the dishonor of the note. We answer that it is not necessary under Sections 81 and 82 of N. I. L. in all cases to make demand of the maker for payment, for the law expressly holds that delay in making presentment is excused, when it is due to circumstances beyond the control of the holder, and not imputable to his default, misconduct or negligence.

It was held in the case of Schlesinger v. Schultz, 110 A.D 356, 96 N.Y.S. 383. "That presentment for payment within ten months was sufficient to hold the...