Keyser v. Warfield

• Decision Date: 30 November 1904
• Citation: 59 A. 189,100 Md. 72
• Parties: KEYSER et al. v. WARFIELD.
• Court: Maryland Court of Appeals

59 A. 189

100 Md. 72

KEYSER et al. v. WARFIELD.

Court of Appeals of Maryland

November 30, 1904

Appeal from Superior Court of Baltimore City; Pere L. Wickes, Judge.

Suit by S. Davies Warfield against Henry B. Keyser, continued in name of Irvine Keyser and another, as administrators of Henry B Keyser, on his decease. From a judgment for plaintiff defendants appeal. Reversed.

Argued before McSHERRY, C.J., and FOWLER, BOYD, and SCHMUCKER, JJ.

James M. Ambler and Randolph Barton, for appellants.

W Irvine Cross, for appellee.

BOYD J.

The appellee sued the appellants' intestate to recover one-half of the amounts paid by the appellee on two promissory notes discounted by the Merchants' National Bank of Baltimore. Each of the notes was originally in this form:

"$2500.00. July 31st, 1896.

"On demand after date Maryland Mnfg. and Construction Co. promise to pay to the order of ------- twenty-five hundred dollars at Merchants' National Bank. Value received. S. Davies Warfield, President, "Henry B. Keyser, Treasurer.

Indorsed: "S. Davies Warfield, "Henry B. Keyser."

Mr. Warfield was president and Mr. Keyser treasurer of the Maryland Manufacturing & Construction Company. The two notes were taken to Mr. Thomas, the president of the Merchants' Bank, without any security on them. He declined to discount them unless they were indorsed by Messrs. Warfield and Keyser and they signed their names on the backs of them. They were subsequently paid by Mr. Warfield, who sued Mr. Keyser for the one-half so paid by him, and he obtained judgment for $2,836.34. Afterwards Mr. Keyser departed this life, and the appellants were appointed administrators of his estate. There are three bills of exception in the record. The first exception was to the ruling of the court in permitting the plaintiff, after offering his oral testimony, to insert the name of the Merchants' National Bank of Baltimore as payee of the said notes; the second was to the refusal to grant two prayers offered by the defendant at the conclusion of the plaintiff's testimony to take the case from the jury; and the third was to the granting of the plaintiff's prayer and the rejection of the defendant's first, second, third, and fourth prayers, offered at the end of the case.

As the defendant proceeded with his testimony after the action of the court at the conclusion of the plaintiff's case, the prayers embodied in the second bill of exceptions are not open for review by us. Barabasz v. Kabat, 91 Md. 53, 46 A. 337. As the principal question is the effect of the evidence as to whether Messrs. Warfield and Keyser were joint makers or indorsers (it being conceded that no notice of protest or nonpayment of the notes was given), and the prayers involve that, it will be more convenient to first consider the rulings presented by the third bill of exceptions.

There have been a number of cases decided by this court involving what are usually spoken of as "irregular indorsements." The liability of such indorser is not determined by the fixed rules of the law merchant, but it depends upon the relation he bears to the instrument, and the intention of the parties thereto. 4 Am. & Eng.Ency. of Law (2d Ed.) 488; 7 Cyc. 669. Courts have differed as to the presumption of such indorsements. Some have held the signers to be liable as indorsers; others as makers, sureties, or guarantors; although the result of each case is largely dependent upon its own particular facts. An early case in this state was that of Sullivan v. Violett, 6 Gill, 181, in which one who had written his name on the back of a note payable to the plaintiffs or order was held to be liable as maker, but no opinion was filed. In Ives v Bosley, 35 Md. 262, 6 Am.Rep. 411, the note sued on was payable to the order of Bosley, signed by Elisha J. Guyton, and indorsed in blank by Charles T. Guyton and William M. Ives, the appellant. The plaintiff proved that the signatures were all upon the note when it was delivered to him by E.J. Guyton for the payment of the money which he then loaned to him. The defendant, Ives, offered to prove that at the time he placed his name upon the back of the note he signed it as indorser. Upon objection the court ruled the testimony inadmissible, and that ruling was affirmed. This court said, "The obligation of Ives, as established by the proof of the plaintiff, is clearly that of an original promisor;" and, after stating the facts which are, in substance, above mentioned, added: "These facts established by conclusion of law the responsibility of Ives as a joint maker or original promisor. *** It is true, as was urged in the argument, that the contract entered into by a blank indorsement will generally receive such a construction as will give effect to the intention of the parties, and that parol evidence will be admitted to show and explain what liabilities were intended to be assumed at the time of the transaction. *** If, however, the contract set up is different from that which attaches by presumption of law, it must be established by proof, showing that both parties, promisor and promisee, so intended and agreed." After quoting from Rey v. Simpson, 22 How. 341, 16 L.Ed. 260, the court added: "Applying these principles to the present case, it is clear that the defendant cannot avoid the liability of a joint promisor, which the law has attached to his blank indorsement, unless he proves a different understanding of all the parties." That case was followed in Walz v. Alback, 37 Md. 404; Owings v. Baker, 54 Md. 82, 39 Am.Rep. 353; Sohroeder v. Turner, 68 Md. 506, 13 A. 331; Gisriel v. Burrows, 72 Md. 366, 20 A. 240; Thompson v. Young, 90 Md. 75, 44 A. 1037; and other cases. In those cases the names of the payees were in the notes, all of the signatures were on them before they were delivered to the payees, and the parties were held liable as joint makers, excepting in Owings v. Baker and Gisriel v. Burrows, where the testimony showed that it was the understanding and agreement of all the parties to the notes that those writing their names on the backs should only be held to the liability of indorsers. In Sittig v. Birkestack, 38 Md. 158, the form of the note sued on differed from those in the above-mentioned cases in that the name of the payee was left blank. It was signed by H. Austermuhle, and on the back were the names of Catharine Austermuhle, Henry Sittig, and Henry Birkestack. The latter was the holder, and had loaned H. Austermuhle the money represented by the note. The case had been previously tried, and the judgment then obtained by the plaintiff was reversed by this court, and a new trial awarded, as is shown by the report of the case in 35 Md. 273. At the first trial the attorney for Birkestack, the holder, inserted his name as payee. In speaking of that in 38 Md. the court said: "The question whether the appellant signed his name on the note as maker was submitted to the jury by the instructions granted and conceded; and, if that was the nature of the contract between the parties, the appellee, as holder of the note, acting in good faith, had authority to insert his name as payee." In Dunham v. Clogg, 30 Md. 284, the note was payable to blank order, and given by the maker to one G.D. Vaughn. The blank was filled by making it payable to the order of Stetson Vaughn, who, before maturity, indorsed it, and the plaintiff in that case became the owner. In the course of the opinion it was said: "In the absence of fraud, the appellee having signed the note, leaving a blank for the name of the payee, the holder could fill the blank with his own name, and indorse it in blank, as it was payable to order, which would give it currency, by simple delivery, and the possession of it in such case would be prima facie evidence of title, enabling the holder to sue in his own name. The same effect is given to the note, under such circumstances, as if it had been made payable to bearer." In Boyd v. McCann, 10 Md. 118, it was said that the holder of a note payable to blank order could fill it up with his own name as payee; and other cases might be cited to show how such a note is regarded in this state. So far as the prayers are concerned (which we are now considering), we do not think the fact that the name of the payee in these notes was left blank...