O'Fallon v. Kerr

• Decision Date: 31 March 1847
• Citation: 10 Mo. 553
• Parties: O'FALLON, EX'R OF DELANEY, v. KERR.
• Court: Missouri Supreme Court

10 Mo. 553

O'FALLON, EX'R OF DELANEY,

v.KERR.

Supreme Court of Missouri.

March Term, 1847.

ERROR TO ST. LOUIS COURT OF COMMON PLEAS.

GAMBLE & BATES, for Plaintiff. 1st. The note being a common note, not negotiable, payable at no particular day, but on demand, no action could arise from it, until demand made. 2nd. As between the makers and the payee, the credit may be infinite, without impairing the obligation to pay; and the contract of the assignor is only necessary to, and consequential upon the note, and most follow its nature, and share its fate. 3rd. The assignment in this case (the object and design of it being fully explained in the testimony), is a mere security for the debt; and a security is not discharged by a failure to demand payment or bring suit. See 8 Mo. R. 318, Marks v. Bank of Missouri. 4th. The note, bearing interest at 10 per cent. and no day fixed for payment, and the indorsement not being in the course of trade, but for the drawee's accommodation only-- i. e. as a security--the holder was warranted in treating it as an investment of capital, to be continued as long as he pleased, and to be determined only by his demand of payment.

SPALDING, for Defendant. 1st. The defendant was not liable on the note sued on, till due diligence used against the makers by suit, or proof that such suit would have been unavailing, and due diligence was not used; nor is there proof of such facts as dispense with the same. See statute on Bonds and Notes; 4 Peters, 366; 3 Dana, 596; 3 A. K. Marsh. 59; 3 Bibb, 6; 1 Bibb, 542; 2 Marsh. 255; 2 Peters, 338. 2nd. The note was due at once without demand and an action lies immediately against the maker (13 Mass. 131, 137; 2 McCord, 246; 3 Wend. 213; 8 Johns. 189, 574; Chitty on Bills, and Story on Promissory Notes), and the same diligence was necessary on it, as on any other note when due. Rev. Code, 1835, p. 105, § 9; 7 Mo. R. 417; 9 Dana R. 45. 3rd. The requisite diligence was also due by the law merchant on notes indorsed after due. 2 McCord, 398; 8 Serg. & Rawle, 351; 1 McCord, 199; 9 Johns. R. 121. 4th. By the law merchant the indorsers of notes payable on demand were discharged, unless they were presented for payment in a reasonable time. Bailey on Bills, 221, 135; 13 Mass. 131; 1 Cowen, 397; 2 Mason, 241; Chitty on Bills, 410, 412, 418; Story on Bills, § 325; 8 Greenleaf, 198; Story on Prom. Notes, 207. 5th. The judgment is right on the whole. This note could not have been evidence on the money counts, 2 Bibb, 424; and there could be no recovery on the special count, or if there had been, judgment would have been arrested. 7 Mo. R. 266.

NAPTON, J.

This was an action of assumpsit brought by Delaney in his life-time against Matthew Kerr, upon the following note:

“$2,080 01. St. Louis, August 17, 1842. On demand we promise to pay to M. Kerr or order, two thousand and eighty dollars and one cent, without defalcation or discount, and for value received, with interest from date at the rate of ten per cent. per annum. J. & A. Kerr.” It was assigned in the following words: “Pay to D. Delaney. Matthew Kerr.”

On the trial the plaintiff proved a demand upon Beverly Allen, the assignee of Augustus Kerr, surviving partner of the firm of J. & A. Kerr, on the 15th of July, 1844, and a notice to Matthew Kerr, on the following day. It appeared, that all the parties resided in St. Louis--that J. & A. Kerr were in mercantile business, and in excellent credit up to the death of J. Kerr, which took place in December, 1843--that Matthew Kerr was the uncle of J. & A. Kerr, not engaged in any business, but was a mere accomodation indorser. No doubt was entertained, but that J. & A. Kerr would have paid the note, if it had been presented at any time before J. Kerr's death. At that time it was discovered that they were largely insolvent, and their assets would pay about 33 1/3 per cent. John Kerr's estate would not pay 3 per cent. On this state of facts, the court (to whom the case was submitted) was of opinion, that the plaintiff could not recover. A motion for a new trial was made and overruled.

The only question presented by the record is, whether the facts in proof made out a case of sufficient diligence on the part of the holder against the makers of the note, to authorize a recovery against the assignor. The note is not so framed as to be a negotiable note within the meaning of our statute. The rights of the parties to the instrument have therefore to be regulated by our act concerning Bonds and Notes. The sixth section of that act declares that an action can be maintained by an assignee against an assignor, only where due diligence has been used in prosecuting a suit against the maker, or when the insolvency or non-residence of the maker renders such a suit unnecessary or unavailing. Has due diligence been used in this case?

This note is payable on demand. It is conceded and all the authorities concur, that a note payable on demand is due immediately, that is, is payable on presentment--and suit may be instituted the...