Oyler v. McMurray
| Decision Date | 13 October 1893 |
| Docket Number | 841 |
| Citation | 34 N.E. 1004,7 Ind.App. 645 |
| Parties | OYLER ET AL. v. MCMURRAY |
| Court | Indiana Appellate Court |
From the Clinton Circuit Court.
D. W Howe, W. A. Johnson, J. C. Suit and F. F. Moore, for appellants.
W. R Moon, O. E. Brumbaugh and J. Claybaugh, for appellee.
The appellee instituted this action in the court below against the appellants, Samuel P. Oyler, Allen Sexson and Greenup Sexson. The complaint was upon a promissory note and the indorsement thereon, of which the following is a copy:
The complaint proceeds on the theory that all the appellants executed the note as joint promisors.
Appellant Oyler filed a separate answer in four paragraphs, but, so far as the questions presented for our consideration are concerned, it is not necessary to notice either the first or fourth paragraph.
The second paragraph alleged that appellant Oyler executed the note sued on, as surety only, for his co-defendants, Greenup Sexson and Allen Sexson, the principals, and that the payee (the appellee) had afterwards, pursuant to an agreement between him and said Greenup Sexson (the consideration and terms of which are fully set forth), and without the knowledge or consent of appellant Oyler, extended the time of the payment of said note for one year.
The third paragraph alleged that appellant Oyler executed the note sued on as accommodation indorser only, for his co-defendants, and that the payee had afterwards, pursuant to three several agreements made between him and said Greenup Sexson (the consideration and terms of which are fully set forth), and, without the knowledge or consent of appellant Oyler, extended the time for the payment of said note three several times--first, from January 1, 1888, to January 1, 1889; second, from January 1, 1889, to January 1, 1890; third, from January 1, 1890, to January 1, 1891. Demurrers, alleging insufficiency of facts, were sustained to each of said paragraphs of answer, appellant Oyler excepting. There was a trial resulting in a judgment against all the defendants, from which all prayed an appeal.
The errors assigned by Oyler are that the court erred in sustaining demurrers to the second and third paragraphs of his answer. The errors assigned by the other appellants have been waived by failure to discuss them.
The first question to determine is whether the note is negotiable as an inland bill of exchange. The statute provides that "notes payable to order or bearer in a bank in this State shall be negotiable as inland bills of exchange, and the payees and indorsers thereof may recover as in case of such bills." Section 5506, R. S. 1881.
The statute does not provide what shall constitute a note, but the term, as used in the section quoted, must be understood in the sense it was then used and defined under the law merchant in the commercial world. Melton v. Gibson, 97 Ind. 158; Glidden v. Henry, 104 Ind. 278, 1 N.E. 369.
One of the essentials of a negotiable promissory note is certainty as to the time when payment is to be made. 1 Parsons on Notes and Bills, p. 30; Glidden v. Henry, supra.
The stipulation in this note is in these words:
"The drawers and indorsers severally waive presentment for payment, protest and notice of protest, and non-payment of this note, and all defenses on the ground of any extension of the time of its payment that may be given by the holder or holders to them or either of them."
This language evidently means that "the holder or holders of this note may, before or after January 1, 1888, extend the time of its payment so as to make it payable at a later date, and the drawers and endorsers severally waive * * * all defenses on the ground of any extension of the time of its payment that may be given by the holder or holders to them or either of them."
The stipulation is binding on the parties thereto, and is enforceable, but necessarily, under the authorities, destroys the negotiability of the note as an inland bill of exchange. Daniel on Neg. Inst., section 62; Glidden v. Henry, supra; Coffin v. Spencer, 39 F. 262; Second Nat'l Bank v. Wheeler, 75 Mich. 546, 42 N.W. 963; Woodbury v. Roberts, 59 Iowa 348, 13 N.W. 312; Smith v. Van Blarcom, 45 Mich. 371, 8 N.W. 90; Hodge v. Farmers' Bank, 7 Ind.App. 94, 34 N.E. 123.
It is contended, however, by counsel for appellee, on the authority of Brown v. First Nat'l Bank, 115 Ind. 572, 18 N.E. 56, that the stipulation in the note in suit is distinguishable and materially different from that in the note on which the decision in Glidden v. Henry is based.
It is true the notes are different in form, but they are not, so far as this question is concerned, different in principle. The holder was not bound, by the stipulation in either case, to extend the time of payment. The material and controlling fact is that the holder had the option, at any time before, as well as after, the time of payment stated in the note, to extend to the drawers and endorsers, or either of them, the time of payment. The principle which underlies the rule enunciated in the cases cited is well stated by Judge ZOLLARS, in Glidden v. Henry, supra, as follows: "The condition is not that something may happen, or be done, that will mature the note before the time named, thus leaving that time as fixed and certain, if the thing do not happen, or be not done; but the condition is that the time named may be displaced by another, uncertain and indefinite time, as the parties may agree."
It is earnestly contended by counsel for appellant, inasmuch as the note is not negotiable by the law merchant, that said Oyler can not be regarded as an indorser, but that he is a surety who has been discharged from liability by the one extension of time pleaded in the second paragraph of his answer.
It is true that, strictly speaking, Oyler, under the circumstances disclosed in the present case, does not stand in the relation of an indorser, under the law merchant. Pool v. Anderson, 116 Ind. 88, 18 N.E. 445.
The word "drawers" appears to have been used in the note in suit as synonymous with the word "makers." The allegations in the complaint, in connection with the copy of the note and indorsement therewith filed, show that Oyler signed his name across the back of the note, at or before the delivery thereof, as one of the makers. This is not...
To continue reading
Request your trial