Hoffman v. Hollingsworth
| Decision Date | 06 June 1894 |
| Docket Number | 1,155 |
| Citation | 37 N.E. 960,10 Ind.App. 353 |
| Parties | HOFFMAN v. HOLLINGSWORTH |
| Court | Indiana Appellate Court |
Appeal from the Knox Circuit Court.
Judgment affirmed.
O. H Cobb, for appellant.
J. T Goodman, W. F. Townsend and J. Wilhelm, for appellee.
The appellee sued the appellant upon his indorsement of a promissory note, alleging in his complaint the execution of the note, the indorsement by appellant, a demand upon the maker, a refusal to pay, and notice to the appellant of the nonpayment, and a request to appellee by appellant not to sue the maker because he was insolvent, and that he had no property subject to execution. It is also alleged that the maker died in the year 1882. To the complaint the appellant filed an answer in six paragraphs. The first paragraph is a general denial; the second, want of consideration for the indorsement; the third, payment; the fourth, an agreement not to sue the appellant on his indorsement; the fifth, the six years' statute of limitations; and the sixth, that the appellee had extended the time of payment without the knowledge of appellant.
The appellant demurred to the second, fourth, fifth, and sixth paragraphs of the answer. The demurrers to the second, fourth, and sixth paragraphs were overruled, and the demurrer to the fifth sustained, to which latter ruling appellant excepted.
Two alleged errors are assigned in this court, namely: First, that the court erred in sustaining the demurrer to the fifth paragraph of answer; and second, that the court erred in overruling the motion for a new trial.
The note sued on was dated November 15, 1882, was payable in bank, and became due sixty days after date.
Edwards Bills and Notes, section 274. Alleman v. Wheeler, 101 Ind. 141.
If the instrument indorsed is invalid as to the parties purporting to have executed it, suit may be brought against the indorser without first having sued the makers. Tam v. Shaw, 10 Ind. 469; Davis v. Doherty, 69 Ind. 11; Willson v. Binford, Admr., 81 Ind. 588.
The indorser of a negotiable instrument warrants the liability of the maker and his ability to pay. Earnest v. Barrett, 6 Ind.App. 371, 33 N.E. 635; Tam v. Shaw, supra; Grimes v. Piersol, 25 Ind. 246; Ward v. Haggard, 75 Ind. 381; Huston v. First Nat'l Bank, etc., 85 Ind. 21; Pool v. Anderson, 116 Ind. 88, 18 N.E. 445. Hence, the contract of the indorser is that he will pay the obligation if the maker fails.
The note sued on is payable at a bank in this State, and is, therefore, negotiable as an inland bill of exchange under section 7520, R. S. 1894. DePauw v. Bank, etc., 126 Ind. 553. The indorser of such a note undertakes, unless his liability is expressly qualified by the indorsement, that if the note is not paid at maturity, and he has due notice of its dishonor, he will pay it.
It seems to be settled law everywhere that upon the presentment for acceptance or payment of a foreign bill of exchange, and acceptance or payment is refused, the holder must protest it in order to charge the indorser. But as to inland bills of exchange the rule is different, and protest is not necessary except when specially provided for by statute. Daniel on Negotiable Instruments, section 926, and cases cited.
In the case of Green v. Louthain, 49 Ind. 139, which was an action against the indorsers on a promissory note payable at a bank in this State, an objection was made to the sufficiency of the complaint, and the court says:
Notice of the nonacceptance or nonpayment is necessary to make the indorser liable, and in default of such notice, the party entitled thereto is discharged. Bronson v. Alexander, 48 Ind. 244; DePauw v. Bank, etc., supra.
It is alleged in the complaint under consideration, that the note was presented for payment when due, payment refused and notice of nonpayment given appellant. This is all that was necessary to fix the appellant's liability under the authorities above cited. But counsel insist that appellant's liability as an indorser, under the allegations of the complaint, can not be determined from the blank indorsement for the reason that it is alleged that the appellee refrained from proceeding against the maker at the request of appellant, and that this request became a part of his contract of indorsement; that oral evidence was necessary to establish such request, hence the entire contract became a mere verbal contract, and an action thereon would not lie after six years.
When it is necessary to resort to oral evidence to establish a contract, although a part of the contract be in writing, the entire contract is regarded as a verbal one. Tomlinson v. Briles, 101 Ind. 538, and cases cited.
An action upon a contract partially in writing and partially in parol, is barred by the six years' statute of limitations. Falmouth, etc., Turnpike Co. v. Shawhan, 107 Ind. 47, 5 N.E. 408.
The cause of action alleged in the complaint is not predicated upon the allegation that the maker was not sued on account of, and pursuant to, the request of the appellant, but is based upon his indorsement, unconnected with such request. The failure of the maker to pay the note at maturity, and notice of such nonpayment, created appellant's liability. The request not to sue the maker created no other or greater liability on appellant's part than if the request had not been made. There was no error in sustaining the demurrer to this paragraph of the answer.
It is next urged that the court erred in overruling the appellant's motion for a new trial. With this motion appellant filed many reasons upon which the motion was based, but as counsel have argued only the statutory causes, those only need be considered, the others being waived.
The question now presented, and which we are called upon to decide, is what is meant by a demand of payment and notice of nonpayment that fix the liability of the...
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