Dorsey v. Wolff

• Decision Date: 02 November 1892
• Citation: 142 Ill. 589,32 N.E. 495
• Parties: DORSEY v. WOLFF.
• Court: Illinois Supreme Court

142 Ill. 589

32 N.E. 495

DORSEY

v.WOLFF.¹

Supreme Court of Illinois.

Nov. 2, 1892.

Appeal from appellate court, third district.

Assumpsit by Marcus A. Wolff against William M. Dorsey. Plaintiff obtained judgment, which was affirmed by the appellate court. Pending appeal, plaintiff died, and Eliza Wolff, his administratrix, was substituted as appellee. Defendant appeals. Affirmed.

Palmers & Shutt, for appellant.

A. N. Yancey, for appellee.

MAGRUDER, J.

This is an action of assumpsit begun in the circuit court of Macoupin county on May 16, 1889, by Marcus A. Wolff against the appellant, Dorsey, to recover, as attorney's fees, the sum of 10 per cent. upon the amount found to be due upon the promissory notes hereinafter mentioned, in a suit theretofore brought upon said notes. The defendant demurred to the declaration. The demurrer was overruled. The defendant excepted to the order overruling the demurrer, and elected to stand by his demurrer. Thereupon plaintiff's damages were assessed at $1,619, and judgment was rendered in his favor for that amount. The judgment has been affirmed by the appellate court, from which latter court the case is brought here by appeal.

The declaration sets up three notes, executed by the defendant, William M. Dorsey, dated December 31, 1885, payable to the order of George W. Belt, at the banking house of Belt Bros. & Co., in Bunker Hill, Ill.,-the first for $13,586.84, on or before two years after date; the second for $543.47, on or before eighteen months after date; and the third for $543.47, on or before two years after date,-each of which notes, after the maker promises for value received to pay the amount therein named to the order of said Belt, contains the following words: ‘With eight per cent. interest per annum after maturity, and, if not paid when due and suit is brought thereon, then we promise to pay ten per cent. on the amount due hereon in addition as an attorney's fee, and to be recovered as part of this note, or by separate suit.’ By the terms of each note, also, the makers and indorsees waive presentment for payment, protest, and notice, etc. The declaration then avers that Dorsey delivered said notes to Belt, and Belt indorsed the same to plaintiff, etc.; that said notes were not paid when due; that suit was brought thereon; that the said 10 per cent. was not paid before or after said suit was brought, and was not recovered in said suit so brought upon said notes as a part thereof, etc. One of the counts, in addition to the foregoing averments, alleges that, after the maturity of the notes, they were placed in the hands of an attorney for suit; that suit was brought thereon, and, the 10 per cent. attorney's fee not having been recovered therein, the plaintiff, before the bringing of the present suit, paid his attorney for his services in said former suit the said sum of $1,619.20.

The main question presented by the assignments of error is whether or not the notes described in the declaration are negotiable instruments. It is claimed by the appellant that the notes are made nonnegotiable by the insertion therein of the written promise of the maker that, if they were not paid when due and suit was brought thereon, he would pay 10 per cent. on the amount due thereon in addition, as an attorney's fee, and to be recovered as a part of the notes, or by separate suit; that the indorsements by the payee did not confer the right upon the indorsee to bring suit in his own name upon the notes; that, even if such indorsements should be held to have conferred upon the assignee the right to bring suit upon the notes in his own name, it did not confer upon such assignee the right to bring a separate suit upon the stipulations or promises as to the attorneys' fees.

Various definitions have been given of a ‘promissory note.’ In general terms, it may be defined to be a written promise by one person to pay to another person therein named or order a fixed sum of money, at all events, and at a time specified therein, or at a time which must certainly arrive. Lowe v. Bliss, 24 Ill. 168;Chicago Ry. Equipment Co. v. Merchants' Bank, 136 U. S. 268, 10 Sup. Ct. Rep. 999; Story, Prom. Notes, p. 2; 3 Kent, Comm. 74; 2 Amer. & Eng. Enc. Law, p. 314. A note is none the less negotiable because it is made payable on or before a named date. Chicago Ry. Equipment Co. v. Merchants' Bank, supra; Cisne v. Chidester, 85 Ill. 523; Ernst v. Steckman, 74 Pa. St. 13. An instrument for a specified sum of money, and also for the payment of something else, the value of which is not ascertained, but depends upon extrinsic evidence, is not a note. Lowe v. Bliss, supra. A note which provides for the payment, after the maturity thereof, of a certain rate of interest per annum, not exceeding the legal rate, is not made conditional by such provision. Houghton v. Francis, 29 Ill. 244;Reeves v. Stipp, 91 Ill. 609;Laird v. Warren, 92 Ill. 204.

Applying these definitions to the notes mentioned in the declaration in this case, we find that each note is ‘a note for a sum certain, payable at a fixed date.’ Dietrich v. Bayhi, 23 La. Ann 767. The notes are not payable on a contingency, because the maker has the option of paying on or before a certain date; nor are they conditional instruments because they contain the words, ‘with eight per cent. interest per annum after maturity.’ The portion of each note which precedes the stipulation or promise as to the attorney's fee is in itself a complete promissory note. For example, the part of the first note that goes before the provision for the fee is as follows: ‘$13,586.84. Bunker Hill, Ills., Dec. 31st, 1885. On or before two years after date, for value received, we or either of us promise to pay to the order of George W. Belt, thirteen thousand five hundred eighty-six and 84-100 dollars, payable at the banking house of Belt Bros. & Co. in Bunker Hill, Illinois, with eight per cent. interest per annum after maturity,’ etc. ‘Here the sum, time of payment, and payee are certain, and these are the essential characteristics of a promissory note.’ Houghton v. Francis, supra. The promise to pay the attorney's fee is a promise to do something after the note matures. It does not affect the character of the note before or up to the time of its maturity, either as to certainty in the amount to be paid, or fixedness in the date of payment, or definiteness in the description of the person to whom the payment is to be made. The stipulation or promise as to the attorney's fee cannot, therefore, affect the negotiability of the note, because the negotiability of a promissory note is, for all practical purposes, at an end when it matures. Parties taking it after its maturity cannot claim to be innocent holders without notice of defenses which may be set up by the maker against its collection. If the stipulation for an attorney's fee is of such a character as to make the amount to be paid at maturity uncertain or indefinite, the note cannot be regarded as negotiable so as to authorize a suit upon it by the indorsee; but, where the stipulation does not have such an effect, its insertion in the note does not destroy the negotiability of the note.

When the amount to be paid at maturity is certain and fixed, the maker knows what he is to pay, and the holder knows what he is to receive, from the face of the note itself. Commercial paper is expected to be paid promptly when it is due. A stipulation for an attorney's fee, which is only to be recovered if the note is not paid when due and suit is brought upon it, can have no force except upon the maker's default. If he keeps his contract by paying his note at its maturity, he will not be obliged to pay the additional amount; and no element of uncertainty enters into the contract. By the stipulation, the maker offers to the holder an assurance of his own confidence in his ability to pay without suit, and thereby adds to the value of the paper as promising less expense in its collection. It has been said that ‘the additional agreement relates rather to the remedy upon the note, if a legal remedy be pursued, than to the sum which the maker is bound to pay; and that it is not different in its character from a cognovit, which, when attached to promissory notes, does not destroy their negotiability. Daniel, Neg. Inst. (4th Ed.) §§ 62, 62 a. We do not think that the negotiability of the notes in this case was destroyed by the stipulations therein as to attorneys' fees.

The view here expressed is sustained by the authorities. In Nickerson v. Sheldon, 33 Ill. 372, the note contained this provision: ‘And we further agree, if the above note is not paid without suit, to pay ten dollars, in addition to the above, for attorneys' fees.’ In that case the plaintiff did not declare for the $10, and hence the recovery was only for the principal and interest due on the note, but we held the note to be negotiable under the statute, and said: ‘The amount due by this note is absolutely certain, and it possesses all the requisites of a negotiable instrument under the statute. Stewart v. Smith, 28 Ill. 397. There is no uncertainty as to the precise sum of money to be paid on the maturity of the note.’ Bane v. Gridley, 67 Ill. 388;Gobble v. Linder, 76 Ill. 157;Barton v. Bank, 122 Ill. 352, 13 N. E. Rep. 503. In Stoneman v. Pyle, 35 Ind. 103, the note contained a stipulation for the payment of...