D. I. Grapes v. C. E. Willoughby

• Decision Date: 09 October 1919
• Parties: D. I. GRAPES v. C. E. WILLOUGHBY
• Court: Vermont Supreme Court

108 A. 421

93 Vt. 458

D. I. GRAPES v. C. E. WILLOUGHBY

Supreme Court of Vermont

October 9, 1919

February Term, 1919.

ACTION OF CONTRACT to recover upon a promissory note indorsed by the defendant above the name of the plaintiff. Plea, the general issue. Trial by jury at the June Term, 1918, Caledonia County, Slack, J., presiding. At the close of the plaintiff's evidence the Court directed a verdict for the defendant. The plaintiff excepted. The opinion states the case.

Judgment affirmed.

Cook & Norton for the plaintiff.

Searles & Graves for the defendant.

Present WATSON, C. J., POWERS, TAYLOR, and MILES, JJ., and FISH SUPR. J.

OPINION

POWERS

B. O. Cote bought of this plaintiff a stock of merchandise, giving as part payment therefor his promissory note for $ 1,000 payable at and to the order of the Lyndonville National Bank at a time stated. Before this note was delivered to the plaintiff the defendant, Willoughby, had written his name across the back of it. The plaintiff took the note to the bank and, having written his name across the back of it, under that of the defendant, received the avails of it by way of credit or otherwise. This note was renewed from time to time, and the note in suit fell due on January 29, 1918. On all these notes Cote was the primary debtor, and the parties here were only liable secondarily. On the day the note in suit fell due, the defendant paid $ 500 thereon, and an indorsement showing that fact was made on the back of the note. Later in the day, the plaintiff, being informed by the cashier of the bank that this payment had been made and that the bank would look to him for the balance, paid the amount remaining due on the note and took it up. Still later in the day this suit was brought to recover of the defendant the amount so paid by the plaintiff. At the trial below, a verdict was, on motion therefor, ordered for the defendant, and the plaintiff excepted. The only ground of this motion that merits consideration is that there was no evidence tending to show due presentment, dishonor and notice, without which there could be no recovery.

The rights of these parties are controlled by the Negotiable Instruments Act (Chapter 140 of the General Laws). As to the bank, their relation is a matter of express definition. They are indorsers (G. L. 2932, 2933), and parol evidence is not admissible to show otherwise. Neosho Milling Co. v. Farmers', etc., Co., 130 La. 949, 58 So. 825; Lightner v. Roach, 126 Md. 474, 95 A. 62. An indorser's engagement is to pay, provided the paper is seasonably presented to the maker, and he is seasonably notified of the latter's default. G. L. 2935. His undertaking, then, is not absolute, but conditional; it is not primary, but secondary; and a cause of action does not accrue against him until and unless the condition of his engagement has been fulfilled, or dispensed with. Ordinarily, a demand and notice are conditions precedent to a right of action against him; and without these, no recovery can be had against him (G. L. 2940, 2958), though protest is not necessary. G. L. 2987.

Other questions aside, then, the motion for a verdict was properly granted, if, as claimed, there was no evidence of presentment and notice. Mechanics', etc., Bank v. Katterjohn, 137 Ky. 427, 125 S.W. 1071, Ann. Cas. 1912A, 439; Lightner v. Roach, supra; Gibbs v. Guaraglia, 75 N.J.L. 168, 67 A. 81. And the subsequent payment by the plaintiff could not revive a liability once discharged. 2 Daniels, § 1224; Story, Bills, § 423; Turner v. Leach, 6 E.C.L. 556.

As between themselves, however, the rights and liabilities of these indorsers were open to explanation and proof. Prima facie, they were liable in the order in which they indorsed; but parol evidence was admissible to show just what the agreement was....