Murray v. Anderson

Citation38 S.E.2d 131
PartiesMURRAY. v. ANDERSON.
Decision Date11 April 1946
CourtUnited States Court of Appeals (Georgia)

Rehearing Denied May 3, 1946.

Syllabus by the Court.

1. "A person placing his signature upon an instrument other than as maker, drawer, or acceptor is deemed to be an indorser, unless he clearly indicates by appropriate words his intention to be bound in some other capacity."

2. As a general rule, presentment for payment to the maker must be made andnotice of dishonor of a negotiable instrument must be given to an indorser to charge him with liability on the instrument

3. Presentment and notice of dishonor of a negotiable instrument may be dispensed with or waived under certain conditions, under the provisions of the Negotiable Instruments Law of this State.

4. An indorser of a promissory note executed by a corporation, who, at the time he indorsed the instrument, was president of the corporation and as such executed the note for the maker, and who was the acting managing officer of the business of the corporation and the majority stockholder therein, and who had under his own control and management all the assets and all the business of the corporation, and whose duty it was to see that funds were provided for its payment and the note paid, and where the note was payable on demand and several credits had been made on the note within less than a year after its execution, held to have been charged with such knowledge of presentment and notice of dishonor as to render him liable on said instrument as an indorser.

5. The Negotiable Instruments Law of this State does not require that notice of presentment and dishonor of a negotiable instrument be given to an indorser in order to charge him with liability, where he already has knowledge of such matters.

6. The petition as amended showed an implied waiver by the indorser of presentment and notice of dishonor of the note sued on, and the trial judge erred in sustaining the demurrer thereto and dismissing the action.

FELTON, J., dissenting.

Error from City Court of Macon; Cecil A. Baldwin, Judge.

Suit by Mrs. Mamie Adams Murray, as administratrix of the estate of E. B. Murray, against R. L. Anderson, Sr., as guardian of J. T. Adams, to recover balance due on a promissory note indorsed by defendant's ward. A demurrer to the petition was sustained and the petition dismissed, and plaintiff brings error.

Judgment reversed.

Statement of facts by SUTTON, Presiding Judge.

Mrs. Mamie Adams Murray, as administratrix of the estate of E. B. Murray, sued R. L. Anderson, Sr., as guardian of J. T. Adams, in the City Court of Macon; and her petition alleged, in substance, that, on September 30, 1929, Adams-Swirles Cotton Mills, a corporation of Bibb County, Georgia, executed and delivered to E. B. Murray its promissory note for $15,000, with interest from date at the rate of eight per cent per annum, and the note was indorsed by J. T. Adams; that, prior to the filing of the suit, J. T. Adams had been adjudicated a person of unsound mind and R. L. Anderson, Sr., had been appointed guardian of his person and property and was acting as such; that certain specified payments had been made on the note, leaving a balance due of $6,725.77, principal, besides interest; that Adams-Swirles Cotton Mills had surrendered its charter to the State of Georgia; that petitioner was entitled to recover, in addition to principal and interest due on said note, fifteen per cent as attorney's fee, due notice to fix the liability for same having been given to the defendant. A copy of the note was attached to the petition and recited it was due on demand and it was payable at Continental Trust Company, Macon, Georgia. The note was under seal and was signed "Adams-Swirles Cotton Mills, by J. T. Adams, Pres., " and was signed on the back "J. T. Adams."

The defendant demurred to the petition upon the grounds that: (1) It appeared from the petition that the AdamsSwirles Cotton Mills, a corporation of Bibb County, was the person primarily liable on said note and that the defendant's ward, J. T. Adams, if liable at all, was only liable as indorser; that the Adams-Swirles Cotton Mills was a necessary party to the action and had not been made a party thereto; (2) that no cause of action was set out in the petition against the defendant; and (3) because it ap-peared from the petition that the liability of J. T. Adams on said note was only that of an indorser and it did not appear that the note had been presented to Adams-Swirles Cotton Mills, the maker thereof, for payment, payment thereof refused, and notice of the dishonor of the note given to defendant's ward, as required by law, to bind the indorser.

The plaintiff amended her petition by setting out that the charter of Adams-Swirles Cotton Mills was surrendered to the State of Georgia more than three years prior to the institution of the suit, to-wit, on January 8, 1936; and added a new paragraph to her petition, as follows: "At the time of J. T. Adams' indorsement of the note described in paragraph two of the petition, he was president of the maker of the note, Adams-Swirles Cotton Mills, a corporation of Bibb County, Georgia. He was the active managing officer of the said business and a majority stockholder of the corporation. He had under his own control and management all the assets and business of Adams-Swirles Cotton Mills. It was his duty to see that funds were provided for the payment of the aforesaid note, and the note paid. So it is, therefore, that he was not entitled to notice of the dishonor of the said note. Under the circumstances stated, there was an implied waiver on his part of notice of dishonor of the note by the maker thereof."

The defendant renewed his demurrer to the petition as amended. The trial judge sustained the demurrer and dismissed the petition, and the exception here is to that ruling and judgment.

Hall & Bloch, of Macon, for plaintiff in error.

Anderson, Anderson & Walker, of Macon, for defendant in error.

SUTTON, Presiding Judge (after stating the above facts).

1. The note sued on in the present case is made payable to the order of E. B. Murray and is signed "Adams-Swirles Cotton Mills, by J. T. Adams, Pres., " on the front of the note, and the name "J. T. Adams" is written across the back of the note. Under the provisions of the Nego tiable Instruments Law, Code, § 14-604, "A person placing his signature upon an instrument other than as maker, drawer, or acceptor is deemed to be an indorser, unless he clearly indicates by appropriate words his intention to be bound in some other capacity." J. T. Adams in signing his name across the back of the note did not indicate by appropriate words his intention to be bound thereon in some other capacity than as indorser, and, under the law and the facts appearing from the plaintiff's petition, the defendant Adams is to be deemed an indorser and will be dealt with as such in determining this case.

2. Code, § 14-605, provides, "Where a person, not otherwise a party to an instrument, places thereon his signature in blank before delivering, he is liable as indorser, in accordance with the following rules: (1) If the instrument is payable to the order of a third person, he is liable to the payee and to all subsequent parties. * * * " It appears from the petition that E. B. Murray, the payee of the note, is dead, and the suit is by the administratrix of his estate against the guardian of J. T. Adams. The Adams-Swirles Cotton Mills, a corporation, had been dissolved and its charter surrendered to the State more than three years before the filing of the petition in this case and that is the reason alleged in the petition for not making the corporation a party defendant. "Presentment for payment is not necessary in order to charge the person primarily liable on the instrument; but if the instrument is, by its terms, payable at a special place, and he is able and willing to pay it there at maturity, such ability and willingness are equivalent to a tender of payment upon his part. Except as herein otherwise provided, presentment for payment is necessary in order to charge the drawer and indorsers." Code, § 14-701. The note sued on is due on demand, and Code, § 14-702, provides: "Where it is payable on demand, presentment must be made within a reasonable time after its issue, except that in case of a bill of exchange, presentment for payment will be sufficient if made within a reasonable time after the last negotiation thereof." Code, §§ 14-703, 14-704, 14-705, and 14-706, provide by whom, when, where and how pre-sentment must be made. Code, § 14-801, declares: "Except as herein otherwise provided, when a negotiable instrument has been dishonored by nonacceptance or nonpayment, notice of dishonor must be given to the drawer and to each indorser, and any drawer or indorser to whom such notice is not given is discharged."

The defendant in error contends that it does not appear anywhere in the plaintiff's petition, that the note was presented for payment to the Adams-Swirles Cotton Mills, the maker of the same, that payment was refused, and that notice of dishonor of the note was given to the defendant's ward, as required by law, in order to bind him as indorser thereon; and, therefore, his demurrer to the petition to this effect was properly sustained by the court. The defendant's contention in this respect, under the general rules set forth in the Negotiable Instruments Law relative thereto, is sound and the judgment sustaining the demurrer and dismissing the action should be affirmed, unless the facts alleged in the petition and what appears therefrom, take the case without these general rules.

3. The plaintiff in error contends that her petition shows that presentment and notice of dishonor were waived by the defendant and that the case made by her petition comes squarely within the principle ruled by the Supreme Court in the case of Hull v. Myers, 90 Ga. 674, 16 S.E. 653, and within the...

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