Herrick v. Edwards
| Decision Date | 30 May 1904 |
| Parties | EMERY HERRICK, Appellant, v. W. J. EDWARDS, Executor of J. R. EDWARDS, Respondent |
| Court | Kansas Court of Appeals |
Appeal from Cole Circuit Court.--Hon. James E. Hazell, Judge.
Judgment reversed and cause remanded.
Silver & Brown for appellant.
(1) The court committed error in permitting the witness, W. J Edwards, to testify as to conversations between Joseph R Edwards and plaintiff, Herrick. "Parol evidence is not admissible to vary the meaning of a note." Henshaw v. Dutton, 59 Mo. 139; Smith v. Thomas, 29 Mo 307; Jones v. Shaw, 67 Mo. 667. So permitting the witness, Edwards, to testify that his father, J. R. Edwards, had told him that Herrick had placed the note at the bank as collateral was likewise error. Whitaker v. Whitaker, 157 Mo. 354; McLean v. Rutherford, 8 Mo. 110; Diel v. Stegner, 56 Mo.App. 535; Holmes v. Farris, 97 Mo.App. 305; 1 Jones on Evidence, sec. 236. (2) The court committed error in refusing declaration of law No. 3 asked by plaintiff. The note sued on being non-negotiable by the provisions of the memoranda thereon, no demand of payment at its maturity on the makers was required; hence no notice to the "indorsers" was necessary. Pococke v. Blount, 6 Mo. 338; Stix v. Matthews, 75 Mo. 96; McMullen v. Rafferty, 89 N.Y. 456; Cromwell v. Hewitt, 40 N.Y. 491; Seymour v. VanSlick, 8 Wend. 404; Peddicord v. Whitten, 9 Iowa 472; Pimley v. Westley, 2 Scott (Eng.) 423. (3) The note was made not only non-negotiable, but likewise non-transferable, by the memoranda at foot and on back of same. These memoranda are to be taken as parts of the note. Black v. Eppestein, 93 Mo.App. 457. (4) The court committed error in denying plaintiff's declaration of law numbered 7. The fact that plaintiff did not use what is termed "due diligence" constitutes no defense to an action on the non-negotiable note in controversy. "The indorsement in such case (i. e., of a non-negotiable note) is equivalent to the making of a new note; nor is it necessary to aver the use of diligence by instituting suit, nor that defendants had suffered no injury." Peddicord v. Whitten, 9 Iowa 473; Long v. Myzer, 3 Iowa 266; Wilson v. Ralph, 3 Iowa 450.
Robert Walker for respondent.
(1) The suit in this case, having been between original parties to the note, it was entirely proper for the court to look into the real transaction occurring between the parties at the time the note was given, and the testimony of W. J. Edwards was entirely relevant and proper. Schneider v. Schiffmann, 20 Mo. 571; Beidman v. Gray, 35 Mo. 282; Kuntz v. Temple, 48 Mo. 71; Seymour v. Farrell, 51 Mo. 95; Mammon v. Hartman, 51 Mo. 168; Cahn v. Dutton, 60 Mo. 297; Malting Co. v. Miller, 38 Mo.App. 251; Bank v. Dunklin, 29 Mo.App. 442; Barnett v. Nolte, 55 Mo.App. 184. (2) Parol testimony is always admissible to show that an indorser received no consideration or that the person receiving the benefit of an indorsement was trustee for the same purpose. (3) The proof submitted in showing the real transaction of the parties, and the real consideration for the note, as well as the note itself, showed that defendant was to be an "indorser" of the paper, which by its own terms was not negotiable or transferable. Under repeated adjudication in our State, a person signing paper in a certain capacity assumes the liability which he contracts. Bank v. Dunklin, 29 Mo.App. 442; Malting Co. v. Miller, 38 Mo.App. 251; Kuntz v. Temple, 48 Mo. 71; Boyer v. Boogher, 11 Mo.App. 130. (3) And in contracting as an indorser of non-negotiable paper, defendant contracted nothing more nor less than the liability of an indorser of such paper who likewise was payee. In Missouri an "indorser" of a note is an indorser in fact, if he so contracts, and nothing else, whether the note be negotiable or non-negotiable. Powell v. Thomas, 7 Mo. 440; Lewis v. Harvey, 18 Mo. 74; Cromwell v. Hewitt, 40 N.Y. 491. (4) An irregular indorser as defendant in this case must be considered to be, expects the protection of the law merchant and should be protected. Tiedeman on Commercial Paper, sec. 271. (5) And plaintiff having failed to make any effort to collect from, or to bring a seasonable suit against the Marks while they were solvent, can not now recover against the defendant. Samstag v. Conley, 64 Mo. 476. (6) The case was tried very fully, even to the extent that the court heard the evidence of plaintiff touching conversations which he had with the deceased defendant. The finding and judgment of the court being clearly right, the same should not be disturbed. Hall v. Goodnight, 138 Mo. 576; Cass County v. Bank, 157 Mo. 133; Wagner v. Edison Co., 82 Mo.App. 287; Redman v. Adams, 165 Mo. 60.
The plaintiff brought his action on a promissory note. The trial was before the court without a jury. The finding and judgment were for defendant. The following is a copy of the note:
On the back thereof are the following indorsements:
The note considered disconnected from the memoranda appearing on its face and back, would be an ordinary negotiable instrument. But in our opinion such memoranda destroys its negotiability, from the fact that it amounts to notice that the parties do not intend that it shall be used as commercial paper. Negotiable commercial notes represent money and they are intended to pass from hand to hand as money. 1 Parsons Notes and Bills, 30, 37; Story Prom. Notes, 41; People v. Bates, 120 U.S. 556, 30 L.Ed. 754, 7 S.Ct. 679. We regard the memoranda aforesaid as negativing and restraining such function and therefore rendering the note non-negotiable.
But we believe it was nevertheless assignable and transferable as any other non-negotiable paper. Weber v. Rosenbaum, 37 Ill.App. 72. It is not within the power of a person executing a promissory note to another to take from it one of the principal rights of property, viz: the right of disposal. We therefore regard defendant's undertaking to prohibit its transfer, either absolutely or as collateral, as non-effective. Merely as illustrative of this view of the law we quote the following from 2 Coke 21, viz:
The question then remains: what obligation did defendant assume? It will be noticed that he signed his name on the face of the note at the place usually occupied by makers; but he added to his signature the word "indorser." Now, the law is that, while regularly, the name of an indorser should appear on the back of a note, yet it is not necessary that it should. It may appear even on the face. 1 Daniels Neg. Insts., section 688; Gibson v. Powell, 6 How. (Miss.) 60.
When one not the payee of a note indorses it before delivery, it will be presumed that he is a maker. But evidence is admissible to show in what character he really signed, unless the note is in the hands of a purchaser without notice. Powell v. Thomas, 7 Mo. 440; Lewis v. Harvey, 18 Mo. 74; Schneider v. Schiffman, 20 Mo. 571.
But in this case there is no room for presumption, or evidence aliunde, since deceased designated the character in which he signed to be that of indorser. What, therefore, are the rights and liabilities of an indorser of a non-negotiable promissory note? In the first place, he is not entitled to have demand and protest made, or notice of non-payment. Pococke v. Blount, 6 Mo. 338; Stix v Matthews, 75 Mo. 96. Though he termed himself "indorser," yet he is not the indorser known to the...
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