May v. Dyer

• Decision Date: 25 March 1893
• Parties: MAY v. DYER
• Court: Arkansas Supreme Court

21 S.W. 1064

57 Ark. 441

MAY v. DYER

Supreme Court of Arkansas

March 25, 1893

Appeal from Yell Circuit Court, Dardanelle District, JEREMIAH G WALLACE, Judge.

Judgment reversed and cause remanded.

W. D Jacoway for appellant.

1. In order to charge May as an assignor or indorser, demand notice and protest should have been alleged and proved. 2 Dan. Neg. Inst. secs. 1319, 717, 719, 929, 1101, 1109; Story, Prom. Notes, secs. 198, 200, 211, 235, 322, 348, 366; 37 Ark. 276; 33 id. 33.

2. But May was not liable on the note; he did not endorse it at all, but merely assigned his interest in the mortgage title. Jones, Mortg. secs. 787, 823, 824, 830, 831.

H. S. Carter and Robert Toomer for appellee.

1. May is shown to have waived formal notice of non-payment and protest -- whether he did waive it or not was for the jury. 13 Ark. 401; 15 id. 415; 27 id. 34; 33 id. 771; Story, Prom. Notes, sec. 364-8; 2 Gr. Ev. sec. 190.

2. The evidence makes out a clear case of false representations and deceit. 38 Ark. 334; 44 id. 216; 30 id. 362; 47 id. 148; 12 S.E. 647. Suppression of the truth is equivalent to a falsehood when the vendor is under obligations to speak. 35 Ark. 483; 17 A. p. 252; 35 N.Y. S. R. 529.

OPINION

BATTLE, J.

The allegations of the complaint in this action are substantially as follows: On the 2nd day of October, 1883, John T. Massey executed a promissory note to the defendant, William N. May, for $ 200 and ten per cent. per annum interest thereon from date until paid, and, to secure the payment thereof, a mortgage conveying to him a tract of land and two horses. On the 5th of November, 1883, May offered to sell the note and mortgage to the plaintiff, A. J. Dyer, and falsely and fraudulently represented to him that the tract of land embraced nearly all the improvements of Massey, and that 25 acres of it was in cultivation, and that the horses were valuable. Relying on these representations and believing them to be true, plaintiff purchased from him the note and mortgage, and paid for the same $ 200; and the defendant transferred them to him. Massey is insolvent, and nothing can be collected on a judgment against him. Two hundred and seventeen dollars and fifty cents still remain due and unpaid on the note.

Dyer sought to hold the defendant liable for the balance due on the note, (1) on the ground May was indorser, and (2) because the representations were false, and he was injured thereby.

The defendant denied endorsing the note, and making the representations and the sale, and also the insolvency of Massey.

May did not endorse the note. He transferred it and the mortgage by a writing on the mortgage in the words and figures following: "For value received I assign and transfer the within note and mortgage unto A. J. Dyer, as administrator of the estate of Robert Fulton, deceased, and authorize him to collect and receive the proceeds thereof the same as I could do. This November 5, 1883.

WILLIAM N. MAY."

This evidence was insufficient to hold him liable. By delivering the note without writing his name on it, he incurred none of the liabilities for it which attach to an indorser. He did not do the act by which the law provides that if he did he shall be liable as an indorser. His failure to do so signified an intention not to assume the liability. He only became liable as a vendor of such paper. Biscoe v. Sneed, 11 Ark. 104; Smith v. Corege, 53 Ark. 295, 14 S.W. 93; Challiss v. McCrum, 22 Kan. 157; French v. Turner, 15 Ind. 59; Story on Promissory Notes, secs. 117, 118, 120; 2 Parsons on Bills and Notes (2d ed.), pp. 15, 37; Chitty on Bills, 246; 1 Daniel on Negotiable Instruments, secs. 689a, 729, 741.

As to the second cause of action, the evidence adduced at the trial tended to prove that the representations were made by May and that they were false, and that Dyer relied upon them when he purchased the note and mortgage. But the extent of the injury suffered thereby, if any, was not shown. It was alleged by the plaintiff, and denied by the defendant, that Massey was insolvent, and that nothing could be collected on a judgment against him. The abstracts of both parties fail to show that any evidence was adduced to prove that this allegation was true. This failure necessarily affected the extent of plaintiff's right of recovery; for it is obvious the solvency or insolvency of Massey, as the truth was, affected the value of the note. If Massey was solvent, the value of the property mortgaged to secure it may have not affected its value materially, and the false...