Pattillo v. Alexander
| Decision Date | 01 April 1895 |
| Citation | 22 S.E. 646,96 Ga. 60 |
| Parties | PATTILLO v. ALEXANDER. |
| Court | Georgia Supreme Court |
Syllabus by the Court.
1. In a suit upon a contract made and to be executed in the state of Tennessee, in the absence of any evidence to the contrary this court will presume that the rules of the common law prevail there.
2. According to the rules of the common law, the indorser of a promissory note is entitled to have the same duly presented for payment, and of a failure or refusal to pay he is entitled to notice; and a failure of the holder to present for payment, or to give notice of nonpayment, discharges the indorser from liability.
3. Where, upon a promissory note executed and payable in the state of Tennessee to a named payee, or order, and containing no stipulation for the payment of attorney's fees, suit was brought by a holder against the payee, who had indorsed upon the note the following undertaking, signed by him "I guaranty attorney's fees up to ten percent. if this note has to be collected by law, on (and?) its prompt payment,"--there being no other indorsement of the paper by the payee: Held, that by the terms of this agreement, it having been made for the purpose and in the course of negotiation, the payee became and was an indorser thereof, and liable as such, with a superadded liability for such reasonable sums, not exceeding 10 per cent., as might be expended for attorney's fees by the holder in the collection of the note. Held, further, that, in order to bind the payee for the payment of the note, it was incumbent upon the plaintiff to prove presentment and notice of nonpayment. Held, further, that, in order to charge the payee with the payment of attorney's fees, it must appear that in the effort to recover from the maker the sums due on the note the holder had incurred a liability, or had expended, for attorney's fees, the amount sought to be recovered from the payee, not exceeding 10 per cent. of the debt due.
Error from superior court, Bartow county; T. W. Milner, Judge.
Action by W. I. Alexander against R. M. Pattillo. Brought forward from the last term. Code, § 4271a-4271c. Judgment for plaintiff, and defendant brings error. Reversed.
J.W Akin, for plaintiff in error.
J. B. Conyers and Graham T. Holtzclaw, for defendant in error.
Except as controlling those matters which are so essentially local in their nature as to be at all times the subject of special statutory regulation, and which, by reason of this peculiar characteristic, are embraced within the term "local idiosyncrasies" of the law, the rules of the common law have been adopted in most of the states of the Union; and the property rights of the citizens of such states have been adjusted with reference to, and the laws governing the same administered in accordance with, its doctrines. This is the reason of the rule that, as to such matters concerning which there is no such recognized variance between the laws of another state and that law which is the common source of all our jurisprudence as will afford to the courts of different states a basis for judicial cognizance of such difference, the courts of one state will presume, in the construction of contracts executed and to be performed in another, that the rules of the common law prevail there, and will determine the rights of litigants accordingly. This is a salutary rule, and one which has been adopted in this state (see Woodruff v. Saul, 70 Ga. 271), and is one of such general acceptance as to be recognized by the courts of last resort in most of the states of the Union (1 Whart. Ev. § 314 et seq.; Rape v. Heaton, 9 Wis. 328; Sherrill v. Hopkins, 1 Cow. 103; Monroe v. Douglass, 5 N.Y. 447; Brimhall v. Van Campen, 8 Minn. 13 [Gil. 1]; Newton v. Cocke, 10 Ark. 169; Seaborn v. Henry, 30 Ark. 469; Martin v. Powder Co., 2 Colo. 596; Johnson v. Chambers, 12 Ind. 102; McAnally v. O'Neal, 56 Ala. 299).
2. The contract of the indorser is not that he will at all events pay a bill which he has by the act of his indorsement transferred to another, but his agreement, by the common law, is to pay upon demand by the holder upon the drawer, and notice of nonpayment or of dishonor to him. The rule which requires notice to the indorser of nonpayment, as a prerequisite to his liability, is based upon the implied undertaking of the indorsee that he will use due diligence in the prosecution of his demand against the maker; that he will present the paper for payment immediately upon its maturity, and will not, by his negligence, expose the indorser to a hazard of loss, against which he, in case of notice of dishonor, might be able otherwise to protect himself. And, if he fail to perform this duty to give timely notice of nonpayment, the law presumes injury to the indorser, and discharges him. A formal protest for nonpayment, though now, in this and many other states, required by statute, in certain cases, was not necessary by the law merchant, save only as to foreign bills of exchange; and as the present case involves only the application of the rules of the law merchant to the contract now under consideration, formal protest for nonpayment was not necessary here in order to bind the indorser. Protest was deemed necessary only as a certain and simple means of proving presentment of the paper, and the fact that the same was dishonored, and the rule requiring it was applicable only to foreign bills of exchange; and, as we have seen, except where required by statute, this formality is not requisite in order to bind an indorser. Notice to him of nonpayment, however, is nevertheless indispensable, as that is one of the conditions upon which he becomes liable upon his contract of indorsement. The time within which such notice was to be given was not fixed by any unvarying rule, under the common law. It was only requisite that demand be made immediately upon maturity of the paper, and that notice of nonpayment should be given within a reasonable time; and a reasonable time would depend to a great extent upon the means of transportation, and the facilities existing at the point where the paper was presented for payment for the transmission of that class of intelligence. In most of the states of the Union, by adjudged cases, where no statute prescribes the time within which notice shall be given, the term "reasonable time" has been defined with such certainty and precision as to afford almost a fixed rule upon that subject. This case being referable to common-law principles for its solution, as to whether or not this indorser received notice at all, and, if so, whether he received it within a reasonable time, taking into consideration the means of communication between the places where the paper was presented for payment and the residence of the indorser, would, if at all doubtful, present questions of fact for a jury, it being borne in mind that notice itself was indispensable to his liability. Chit. Bills, star page 443; Daniel, Neg. Inst.§§ 970, 971, 1035 et seq. But where the matter of fact, in the very nature of things, is not doubtful, the court may adjudge, as a matter of law, that in the particular case the notice is not given within such a time as legally to impose a liability upon the indorser. Of course, no rule can be framed by which it can be stated, as a matter of law, within what time, generally, a notice of nonpayment must be given in order to bind an indorser, for that would depend upon the particular facts of each case; but where the facts are undisputed, and the time allowed to elapse is manifestly unreasonable, it may be pronounced with perfect confidence that in a certain case the notice was not timely given. The question then becomes one of law, and not of fact, and the court may and should pronounce thereon without submitting it to a jury. Whitaker v. Morrison, 1 Fla. 25; Van Hoesen v. Van Alstyne, 3 Wend. 75; Sice v. Cunningham, 1 Cow. 397, 1 Term R. 167; Furman v. Haskin, 2 Caines, 369. In the present case, according to the evidence in the record, some four months elapsed after the note became due before it was presented for payment, and a half a month more elapsed before notice of nonpayment was given. Surely, in this day of fast mails, instant communication by telegraph, and other equally effective means for transmitting intelligence, it can be with certainty said that a delay of 4 1/2 months in giving notice of nonpayment upon a demand which should have been made, both maker and indorser living in populous cities, between which there is daily communication by telegraph and by mail, with a distance of not more than 100 miles intervening, is unreasonable, as a matter of law. The trial judge should have so directed the jury, and if they, though not so instructed, found to the contrary, the verdict was wrong.
3. The note sued upon in this case was executed in the state of Tennessee, and was made payable to the order of the present defendant, at the city of Chattanooga, in said state. Upon it the defendant made the following indorsement: Afterwards, suit was brought by the plaintiff, as the holder, upon this note, against the payee alone, upon this indorsement, as a contract of guaranty; and the defendant answered that, if liable at all his liability was that of an indorser, and not as a guarantor, merely, and the holder having failed to demand payment promptly at maturity, and give him notice of dishonor, he was therefore discharged. The court ruled the contract of the payee not to be one of indorsement, and a verdict was rendered for the plaintiff. In order to determine the liability of the payee to the holder,--he being the only person...
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