Newton Wagon Co. v. Diers
| Decision Date | 18 March 1880 |
| Citation | 4 N.W. 995,10 Neb. 284 |
| Parties | THE NEWTON WAGON CO., PLAINTIFF IN ERROR, v. HERMAN DIERS, DEFENDANT IN ERROR |
| Court | Nebraska Supreme Court |
ERROR to the district court for Seward county. Tried below before POST, J.
REVERSED AND REMANDED.
Norval Brothers, for plaintiff in error, cited Brandt on Guaranty secs. 147, 170. Firman v. Blood, 2 Kan. 525. Fuller v. Scott, 8 Kan. 32. Robinson v Abell, 17 Ohio 42. Seymour v. Mickey, 15 Ohio St. 519. Crosier v. Chambers, 1 Spencer (N. J.), 256. Cushman v. Dement, 3 Scam., 498. Parkhurst v. Vail, 73 Ill. 345. Boynton v. Pierce, 79 Ill. 145. Chandler v. Westfall, 30 Texas, 475. Horton v. Manning, 37 Texas, 23. Van Doren v Tjader, 1 Nevada, 380. Watson v. Hunt, 6 Gratt (Va.), 633. Clark v. Merriam, 25 Conn. 576. Heard v. Dubuque Co. Bank, 8 Neb. 10. Farmers' Bank v. Reynolds, 13 Ohio 104. Fuller v. Scolt, 8 Kan. 32.
C. L. Lewis and Edward Crane, for defendant in error, cited Brandt on Guaranty, sec. 153, and cases cited. Hall v. Newcomb, 3 Hill, 233. S. C., 7 Hill, 416. Miller v. Gaston, 2 Hill, 188. Edwards on Bills, 459. Seymour v. Mickey, 15 Ohio St. 515. Parker v. Riddle, 11 Ohio 102. Robinson v. Abell, 17 Ohio 42. Hough v. Gray, 19 Wend. 202. Sturtevant v. Randall, 53 Me. 149. Gaff v. Sims, 45 Ind. 262.
It is advisable, first, to determine the character of the two instruments on which the action in the court below was brought. They were alike, and in these words, viz.:
Indorsed on the back.
The action was instituted, and has been conducted by the plaintiff on the theory of these being negotiable promissory notes, in the payment of which the makers were entitled to the three days of grace accorded to commercial paper. The question of negotiability is important from the fact that, if non-negotiable, the statute of limitation had fully run before the action was commenced, but otherwise if negotiable.
A promissory note is defined to be "A plain and direct engagement in writing, to pay a specified sum, at the time therein limited, to a person therein named, or sufficiently indicated, or to his order, or to bearer." 2 Broom & Hadley's Commentaries, Am. Ed., 163. Substantially the same definition is found in 3 Kent's Commentaries, 9th ed., 92, note 1. These instruments certainly answer all of these requirements. They are in writing. In each there is an unconditional promise by the makers to pay the sum of forty dollars with interest to the Newton Wagon Co., or order, on a day certain. That this promise is all that is required in a promissory note we believe is not questioned by defendant's counsel, but they claim that what follows therein is fatal to its negotiability.
If the mere fact of stating in a promissory note its consideration deprives it of its otherwise negotiable quality, then these notes were not negotiable, for that which follows the promise of payment is but a recital at length of facts, showing particularly for what the notes were given. No promise or undertaking on the part of the payees is included, which, had there been, we concede would have rendered them unnegotiable. In effect this recital is not different from what would be a statement in a note that it was given for a house purchased, or for money borrowed from the payee, which surely would not have the effect here contended for. We are of the opinion that the notes were negotiable, and that the statute of limitations, therefore, had not fully run when the action was commenced.
In the assignment of errors, two questions are raised concerning the pleadings. They relate to the third and fourth counts of the answer, to which the plaintiff filed general demurrers, which were overruled and exceptions taken. As to the ruling upon the third count we think it was right, for in the last clause thereof it is distinctly and unequivocally alleged that the indorsement of the notes by the defendant "was made without any consideration, either legal or equitable, coming to him or to any other person, from the said plaintiff, or said J. C. Clark & Co., or from any other person or persons." As the action is in the name of the payee of the notes, a total want of consideration for the indorsement, if shown, would be fatal to a recovery. 1 Parsons on Contracts, 496. Seymour & Co. v. Mickey, 15 Ohio St. 515. There is no admission in the preceding portion of this count, as suggested by plaintiff's counsel, which absolutely destroys the effect of this denial of consideration.
In the fourth count it is alleged, in substance, that the defendant indorsed said notes with the "intent," on his part, to become liable only as an indorser of commercial paper, and was therefore in an attitude requiring demand and due notice of non-payment by the makers, to fix his liability. And, as applicable to the claim of the plaintiff that the defendant's undertaking was that of guarantor, other facts are alleged with the view of showing that, in consequence of the neglect to enforce payment from the makers, the defendant will be prejudiced if now he be held liable.
As to the "intent" with which the defendant signed his name to the notes we think this answer was bad. What he may have intended is of no consequence, if not in harmony with what he did, unless the payee of the notes was a party to it. It does not appear that this intention was ever made known until disclosed by the answer, and therefore constituted no defense.
But as to the residue of this count, if what is averred be true, we think it sufficient evidence of laches on the part of the payee in not proceeding to make collection from the makers, to release the defendant from his engagement, whether he be treated as indorser or as guarantor. It is there charged that the defendant was not notified of the default of the makers, nor was payment demanded of him "until the day when the action was commenced." And further, "that the said Wilson and Russell," the principals, "were, for several years after said notes became due and payable, solvent, and residents of the county of York, and able to pay all demands against them; that said Russell and Wilson are now both insolvent."
It is also alleged "that by reason of the plaintiff's failing to demand the payment of said notes from him, or notify him of their non-payment, he was led to believe, and did believe, that the same were paid." The rule applicable to this state of facts seems to be that, unless a demand be made upon the principal within a reasonable time, and notice given in case of non-payment, the guarantor is discharged to the extent that he may be damaged by the delay. 2 Daniel on Negotiable Instruments, 638. And if it appear that the principal was solvent at the maturity of the obligation, but became insolvent before demand was made or notice given, except under special and peculiar circumstances, damage will be presumed. Oxford Bank v. Haynes, 25 Mass. 423, 8 Pick. 423. Talbot v. Gay, 35 Mass. 534, 18 Pick. 534. The demurrer to this count also was properly overruled.
On the trial the defendant was examined as a witness in his own behalf, and, against the objection of the plaintiff, was permitted to answer two questions, which it is claimed were improper. The first of these questions was as to his understanding of the object for which he indorsed the...
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Newton Wagon Co. v. Dier
... ... [Signed]F. W. WILSON, ... +-----------------------+ ... T. J. RUSSELL.+------------------------------------+ ... Indorsed on the back.HERMAN DIERS, ... +------------------------------------+ ... J. C. CLARK & Co.The action was instituted and has been conducted by the plaintiff on the theory of these being negotiable promissory notes, in the payment of which the makers were entitled to the three days of grace accorded to commercial paper. The ... ...