Overland Auto Company v. Winters

• Decision Date: 17 March 1919
• Citation: 210 S.W. 1,277 Mo. 425
• Parties: OVERLAND AUTO COMPANY v. C. F. WINTERS et al.; W. B. STRANG, Appellant
• Court: Missouri Supreme Court

210 S.W. 1

277 Mo. 425

OVERLAND AUTO COMPANY v. C. F. WINTERS et al.; W. B. STRANG, Appellant

Supreme Court of Missouri, Second Division

March 17, 1919

Appeal from Jackson Circuit Court. -- Hon. Allen C. Southern, Judge.

Reversed.

Bowersock & Fizzell for appellant.

(1) The usual requirements of presentment and notice are limited in the case of an accommodated indorser by Sec. 10050 and 10085 R. S. 1909. If, therefore, Winters made the note in question for Strang's accommodation, Strang, an accommodated indorser, would not be entitled to have the note presented to Winters for payment, if he had reason to expect that the note would not have been paid if presented, and he would not be entitled to notice of dishonor. Strang was not an accommodated indorser, but occupied the position of an ordinary indorser entitled to the rights of presentment and notice. There is not in the evidence the slightest ground for saying that Winters made the note in question for Strang's accommodation. The matter of accommodation is carefully dealt with by the Negotiable Instruments Act. Sec 10000, R. S. 1909. Can it possibly be said that Winters signed this note "without receiving value therefor and for the purpose of lending his name to some other person," i. e., Strang? The testimony of Dougherty, the payee, is directly to the contrary. Dougherty did not desire Winters' name on the note in order to make the paper good. He did want Strang's name on the instrument for that very reason. Winters did not sign as an accommodation maker for Strang, and Strang was not an accommodated indorser. Both Winters and Strang signed the note because they were interested in the deal, but neither signed "without receiving value therefor, and for the purpose of lending his name" to the other. The evidence not only fails to show that Strang was an accommodated indorser, but it is inconsistent with any such showing. Dougherty testifies with particularity that he sold the car to Winters and Strang and received the note in part payment. If that is a fact then Strang was not an accommodated party, and evidence that he was would contradict the only testimony introduced by plaintiff on the trial.

Jas. C. Rieger for respondent.

(1) The Negotiable Instrument Act excuses both presentment and notice where the indorser is a primary obligor; this was the rule of the Law Merchant, under which law proof of the fact constituting the excuse could be made aliunde the note; the statute having adopted the rule of the law merchant as to the excuse will, in the absence of an expression of a contrary intention, be presumed to have adopted along with the rule the right to make the proof aliunde the note. Story on Promissory Notes (7 Ed.), sec. 268; Edwards on Bills, p. 638; Daniels on Neg. Inst. (6 Ed.), sec. 1085; Randolph on Com. Paper, sec. 1354; Blanderman v. Price, 50 N.J.L. 296; Donnell v. Lewis County Savings Bank, 80 Mo. 165; Webster v. Mitchell, 22 F. 869; First Natl. Bank v. Ryerson, 23 Iowa 508; Fulton v. Maccracken, 18 Md. 528; Shriner v. Keller, 25 Pa. 61; American Natl. Bank v. Junk Bros., 94 Tenn. 624. The fact excusing presentment and protest could be shown aliunde the note; it was not necessary for the fact to appear upon the note. Churchill v. Grocer Co. 164 S.W. (Ark.), 283; Sweetser v. Jordan, 216 Mass. 350; Donnell v. Lewis County Savings Bank, 80 Mo. 165; Webster v. Mitchell, 22 F. 869. This statute clearly shows that it contemplated an indorser may be accommodated by the maker as well as accommodating the maker, and it adopts the rule of the Law Merchant excusing presentment and notice where the indorser is himself the accommodated party. Now, in adopting this rule of law, the Legislature also adopted the rule of evidence of the Law Merchant. This uniform Negotiable Instrument Act permits proof outside of the instrument to show the existence of the fact on account of which the statute makes it unnecessary to make presentment and give notice. Such proof does not show that the indorser was a maker. It simply shows that though indorser and not maker, the note was for his accommodation. This does not change or alter the note in any particular. It simply shows what kind of an indorser he is. Bank v. Bickel, 143 Ky. 754; In re Alldred's Estate, 229 Pa. 627; Baumeister v. Kuntz, 53 Fla. 340; Hardwick v. Hardwick, 192 N.Y. 499, 19 L. R. A. (N. S.) 136 and note; Cox v. Henry, 184 S.W. 495; Rodgers v. Slavens, 101 Kans. 4; State Bank v. Pangest, 165 N.W. 479, and Lehigh Trust Co. v. Strause, 258 Pa. 382; Morgan v. Thompson, 72 N.J.L. 244. (2) The case is still stronger where the maker and indorser are partners and execute the note in the partnership business. 2 Daniels on Neg. Inst. (6 Ed.), sec. 1086; Harwood v. Jarvis, 15 Sneed, 375; Story on Bills (Bennett's Ed.), 313 (a); Rhett v. Poe, 2 How. 457; Hays v. Citizens Sav. Bank, 101 Ky. 201. Rhett v. Poe, 2 How. (U.S.) 457, 483. (3) The evidence proved that the note was made for the accommodation of Strang. The evidence clearly proved that Winters & Strang together bought the car for their joint use in their joint business, and gave the note in part payment for the car. This made the note for Strang's accommodation as much as it was for the accommodation of Winters. It was Strang's debt as much as it was the debt of Winters. It was a partnership transaction. This was the view taken of the facts in the court's former opinion, and is the correct view. (4) No presentment is required where the indorser and maker are both primary obligors. This appears from the authorities hereinbefore cited. This is expressly declared in the act (R. S. 1909, sec. 10040). This was the rule of the Law Merchant, and this rule has been adopted by the statute.

WHITE C. Roy, C., absent.

OPINION

WHITE, C. --

This suit is on a promissory note. The judgment in the circuit court of Jackson County was for the plaintiff; the case was appealed to the Kansas City Court of Appeals, where the judgment of the circuit court was reversed in a majority opinion written by Judge Trimble; Judge Ellison dissented and caused the case to be certified to this court for final determination.

We cannot do better than to adopt the statement of the facts and in the main the exposition of the law by the majority opinion of the Kansas City Court of Appeals:

"Plaintiff, as assignee for value before maturity of a negotiable promissory note, brought suit thereon against C. F. Winters and W. B. Strang. While the petition alleged that 'defendants by their promissory note herewith filed, dated May 1, 1911, for value received, promised to pay,' etc., yet it also set out the note on the face of the petition in words and figures as follows:

"$ 460.00 Kansas City, Mo., May 1, 1911.

"'Ninety days after date we promise to pay to the order of H. A. Dougherty, four hundred sixty and no-100 dollars, at Kansis City, Mo. Value received with interest at eight per cent. per annum.

C. F. Winters.

"'W B. Strang (on back).'"

"The petition then alleged the assignment of the note to plaintiff before maturity; that $ 50 had been paid thereon February 23, 1912; and that the remainder was due and unpaid, for which judgment was asked. Defendant Winters filed an answer admitting the execution of the note, but denied that there was any consideration therefor between him and the plaintiff. Plaintiff filed a reply to this answer in which the plea of no consideration was denied. Defendant Strang filed a separate answer in which he denied, under oath, the execution of the note sued on, and also denied generally all the allegations of the petition.

"At the trial a jury was waived. The note was introduced showing Winters' signature at the bottom, in the usual place for the payor's name, and the name of W. B. Strang on the back. This was admitted to be Mr. Strang's signature. The plaintiff then introduced Dougherty, the payee of the note, who testified, without objection from either defendant, that the note was given under the following circumstances: Dougherty was agent for the Overland Auto Company and was selling automobiles for said company. Winters came to him and said he and Mr. Strang wanted to buy an automobile for use in the land business of Overland Park, and he asked Dougherty if he would take a note for part payment of the machine. Dougherty replied that he would look up the matter and let him know. Dougherty further testified that his company would not allow him to take notes directly to it in payment of machines, but, owing to Strang's financial standing, he concluded to take the note himself and give his personal check to the company for that amount. Dougherty then notified. Winters that they could buy a machine in the way they proposed if he had one that suited them. Winters and Strang then came to Dougherty's place of business, where Dougherty told the latter of his decision to accept the note and pay the cash therefor to the company himself in view of Strang's standing. Strang and Winters then picked out a car, and Dougherty drove it about for them, demonstrating it and otherwise going through the preliminaries necessary to make a sale. Strang at first objected to the color of the car, saying he wanted a gray car, while this was blue. But he finally decided to take it, saying, 'We will take this one.' Thereupon Dougherty drew up the note and handed it to them. There were some alterations to be made in the car, so that it was not ready for delivery until the next day. When it was ready, the money due on the car was paid, and the note, signed as above shown, was delivered, and the car turned over to defendants. No understanding was had between Dougherty and Strang as to how the note should be signed, that is, nothing was said about it, though Dougherty wrote the note 'We...