Hoffman v. Hollingsworth

• Decision Date: 06 June 1894
• Parties: HOFFMAN v. HOLLINGSWORTH.
• Court: Indiana Appellate Court

10 Ind.App. 353

37 N.E. 960

HOFFMAN

v.HOLLINGSWORTH.

Appellate Court of Indiana.

June 6, 1894.

Appeal from circuit court, Knox county; G. W. Shaw, Judge.

Action by Spear S. Hollingsworth against Christian Hoffman. From a judgment for plaintiff, defendant appeals. Affirmed.

O. H. Cobb, for appellant. John T. Goodman and Townsend & Wilhelm, for appellee.

ROSS, J.

The appellee sued the appellant upon his indorsement of a promissory note, alleging in his complaint the execution of the note, 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 2d, 4th, 5th, and 6th paragraphs of the answer. The demurrers to the 2d, 4th, and 6th paragraphs were overruled, and the demurrer to the 5th 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 60 days after date. “One who transfers a negotiable instrument by indorsement warrants the title and genuineness of the paper he transfers, and when prosecuted upon his contract of indorsement he is estopped from denying the existence, legality, or validity of the contract which he transfers, for the purpose of defeating his own liability thereon. He warrants that the instrument is not forged, and is liable upon that warranty if any of the names prior to his own be not genuine.” Edw. Bills & N. § 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, 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. Bank, 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 therefore negotiable as an inland bill of exchange under section 7520, Rev. St. 1894, and section 5506, Rev. St. 1881. De Pauw v. Bank, 126 Ind. 553, 25 N. E. 705, and 26 N. E. 151. 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 the settled law everywhere that upon the presentment for acceptance or payment of a foreign bill of exchange, where 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. 2 Daniel, Neg. Inst. § 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: “The last objection urged to the complaint is that it does not appear therefrom that the note was protested and due notice thereof given to the indorsers. No protest of the note was necessary. All that was required to fix the liability of those secondarily liable was a demand of payment and notice of nonpayment.” 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; De Pauw v. Bank, 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, cannot 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, 1 N. E. 63, and cases cited. An action upon a contract partially in writing and partially in parol is barred by the six-years statute of limitations. 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...