Cooke v. Pomeroy

• Decision Date: 18 January 1895
• Citation: 32 A. 935,65 Conn. 466
• Court: Connecticut Supreme Court
• Parties: COOKE et al. v. POMEROY.

32 A. 935

65 Conn. 466

COOKE et al.

v. POMEROY.

Supreme Court of Errors of Connecticut.

Jan. 18, 1895.

Appeal from superior court, Hartford county; Shumway, Judge.

Action by Lorrin A. Cooke and others, as receivers of the Continental Life Insurance Company, against Mary J. Pomeroy, to recover the amount of two stock notes. Plaintiffs had judgment, and defendant appeals. Affirmed.

Defendant, on June 1, 1874, purchased 80 shares of stock in the Continental Insurance Company of Hartford, and, in part payment thereof, executed her promissory note, indorsed by another, and payable 30 days after demand. On the same day she indorsed a note for another, payable at the same time, knowing that such note was also executed in part payment of stock in the same company. Waiver of protest was indorsed on each note. The said company was adjudged insolvent in 1887, and on March 9, 1888, the plaintiffs, as receivers thereof, demanded payment of each note, and, payment being refused, afterwards brought this action. The statute of limitations was pleaded in defense.

E. Livingston Wells, for appellant.

John R. Buck and John H. Buck, for appellees.

BALDWIN, J. When the defendant signed one of the notes in suit, and indorsed the other, she did so knowing that they represented the amount unpaid upon the original subscriptions to certain shares of stock in the Continental Life Insurance Company. Part of that stock she then owned herself, and upon it she subsequently received dividends. The corporation retained the notes, without making any demand upon them, for 13 years, and until it became insolvent. During this time they constituted part of its assets, and must have been returned as such in its annual statements to the insurance commissioner. Gen. St. 1875, p. 304, art. 3. They were, in form, negotiable promissory notes, payable upon a contingency which was under the control of the holder. Insurance Co. v. Bill, 31 Conn. 534. That contingency was the making of a proper demand upon the maker, and no action could lie upon the notes until 30 days thereafter. Where a note is payable on demand, no demand is necessary before suit; but, if payable a certain time after demand, no right of action can arise until a demand, and the subsequent lapse of the time specified. Thorpe v. Booth, Ryan & M. 388; Holmes v. Kerrison, 2 Taunt. 323; Taylor v. Whitman, 3 Grant, Cas. 138, 139. Until demand and refusal of payment, such a note cannot ordinarily be considered dishonored, as regards either maker or indorser. Gen. St. § 1859, applies only to notes payable on demand, and upon which, therefore, suit can be brought as soon as they are given. There are authorities which hold that, in the case of a note payable at the expiration of a certain time after demand, the statute of limitations begins to run...