Continental Oil Co. v. Horsey

• Decision Date: 29 November 1939
• Docket Number: 61.
• Citation: 9 A.2d 607,177 Md. 383
• Parties: CONTINENTAL OIL CO. v. HORSEY et al.
• Court: Maryland Court of Appeals

9 A.2d 607

177 Md. 383

CONTINENTAL OIL CO. v. HORSEY et al.

No. 61.

Court of Appeals of Maryland

November 29, 1939

Appeal from Circuit Court, Queen Anne's County; Wm. Mason Shehan, Judge.

Action by the Continental Oil Company against T. Clayton Horsey and another on a guaranty of payment of any shortage due to fault of one contracting to sell plaintiff's wares at a filling station. From a judgment on a directed verdict for defendants, plaintiff appeals.

Reversed and new trial awarded.

Edward T. Miller and Harry E. Clark, Jr., both of Easton, and John Palmer Smith, of Centerville, for appellant.

J DeWeese Carter, of Denton (Thomas J. Keating, Jr., of Centerville, on the brief), for appellees.

Argued before BOND, C.J., and OFFUTT, PARKE, SLOAN, MITCHELL JOHNSON, and DELAPLAINE, JJ.

BOND Chief Judge.

The parties to this appeal present the single question whether the giving of a note payable on demand after date for a pre-existing debt discharged guarantors of that debt. In a suit by a creditor against the guarantors, a verdict for the defendants was directed at the close of testimony on the plaintiff's behalf, and from the judgment entered accordingly the plaintiff appeals.

The plaintiff is a dealer in gasoline, oils and other merchandise, and in consideration of making a contract with William E. Cohee to sell its wares at a filling station received from the defendants on March 15, 1934, a written agreement guaranteeing payment to the plaintiff of 'any sum of money which may become due on account of stock shortage, cash shortage, or any form of shortage that might occur due to the fault of William E. Cohee'. The money limit of the liability was to be $1,000. There was evidence of a shortage of $665.42 in the early part of the year 1937. The record contains a written statement by William E. Cohee admitting the shortage, and a note for the amount was given by him the same day, March 26, 1937. The note is in a common form, reading that, 'On Demand after date,' the maker promises to pay the amount; and it provides for confession of a judgment.

The contention of the defendants and appellees is that by the taking of the note in this form there was a suspension of enforcement of the obligation for one day, until 'after date' and that this was a material alteration of the debt guaranteed which must release the guarantors. But that form, usually, and perhaps always, the result of writing the note on a printed blank, has been dealt with in a large number of cases in recent years, and there has been an almost unanimous opinion that the words 'after date' do not give an extension of credit until the next day, and that a demand is not required to mature the note; in other words, that it is not to be distinguished at all from a note reading payable on demand simply. Hitchings v. Edmands, 132 Mass. 338; Fenno v. Gay, 146 Mass. 118, 15 N.E. 87; City Nat. Bank v. Adams, 266 Mass. 239, 165 N.E. 470; Homewood People's Bank v. Hastings, 263 Pa. 260, 106 A. 308; Miners' State Bank v. Auksztokalnis, 283 Pa. 18, 128 A. 726; Webber v. Webber, 146 Mich. 31, 109 N.W. 50; Peninsular Sav. Bank v. Hosie, 112 Mich. 351, 70 N.W. 890; Fifth Nat. Bank v. Woolsey, 31 A.D. 61, 52 N.Y.S. 827; Schlesinger v. Schultz, 110 A.D. 356, 96 N.Y.S. 383; Johnson v. Learie, 100 Vt. 308, 137 A. 205; Turner v. Mining Co. 74 Wis. 355, 43 N.W. 149, 5 L.R.A. 533, 17 Am.St.Rep. 168; In re Hoagland's Estate, 128 Neb. 219, 258 N.W. 538; Spragins v. McCaleb, 237 Ala. 658, 188 So. 251; Hotel Lanier Co. v. Johnson, 103 Ga. 604, 30 S.E. 558; O'Neil v. Magner, 81 Cal. 631, 22 P. 876, 15 Am.St.Rep. 88; Kenyon v. Youngman, 59 App.D.C. 300, 40 F.2d 812; Daniell, Negotiable Instr., 7th Ed., sec. 102; Crawford, Negotiable Instr. Law, 140. 'An instrument payable 'on demand after date' is payable on demand.' 4 Williston, Contracts, 2d Ed., 3267. Uniformity of Maryland decisions with those applying the same law in other states is generally to be sought. Whitcomb v. Nat. Exchange Bank, 123 Md. 612, 616, 91 A. 689. And the authorities cited may be taken to have fixed the interpretation for commerce as well as for the law.

A note payable on demand is immediately, without demand. Blick v. Cockins, 131 Md. 625, 630, 102 A. 1022; First Nat Bank v. Blackman, 249 N.Y. 322, 330, 164 N.E. 113; Dominion Trust Co. v. Hildner, 243 Pa. 253, 90 A. 69; Shuman v. Citizens' State Bank, 27 N.

Dak. 599, 147 N.W. 388, L.R.A.1915A, 728; First State Bank v. Utman, 136 Minn. 103, 161 N.W. 398; Citizens' Sav. Bank v. Vaughan, 115 Mich. 156, 73 N.W. 143; 2 Daniell, Negotiable Instr., 7th Ed., sec. 673. Limitations begin to run on the day of execution of such an instrument. Darnall's Ex'rs v. Magruder, 1 Har. & G. 439; Fells Point Sav. Bank v. Weedon, 18 Md. 320, 81 Am.Dec. 603. Review of decisions in note: 44 A.L.R. 397. And on that first day, it has been held, a bank receiving such a note may set it off against its liability on a deposit of the maker's. Citizens' Sav. Bank v. Vaughan, 115 Mich. 156, 73 N.W. 143.

For these reasons it...