Peale v. Addicks

• Decision Date: 30 March 1896
• Docket Number: 209
• Citation: 174 Pa. 543,34 A. 201
• Parties: John W. Peale v. J. Edward Addicks, Appellant
• Court: Pennsylvania Supreme Court

34 A. 201

174 Pa. 543

John W. Peale v. J. Edward Addicks, Appellant

No. 209

Supreme Court of Pennsylvania

March 30, 1896

Argued January 27, 1896

Appeal No. 209, July T., 1895, by defendant, from order of C.P. No 1, Phila. Co., March T., 1895, No. 1061, making absolute a rule for judgment for want of a sufficient affidavit of defense. Reversed. DEAN, J., dissents.

Assumpsit on a promissory note.

Plaintiff's statement was as follows:

Plaintiff claims of defendant the sum of $2,138.54, together with interest thereon from March 27, 1895, all of which is justly due from the defendant to the plaintiff as follows:

Defendant is an indorser upon a promissory note dated December 24 1894, payable three months after date, for the sum of $2,136.90, drawn by Staten Island Terra Cotta Lumber Company to the order of "Ourselves" and by it indorsed. The following is a copy of said promissory note:

"WOODBRIDGE, N.J., December 24, 1894.

"Three months after date the Staten Island Terra Cotta Lumber Co. promises to pay to the order of Ourselves Twenty-one hundred and thirty-six 90/100 dollars at The First National Bank, Jersey City, N.J.

"STATEN ISLAND TERRA COTTA LUMBER CO.

"by GEO. A. KELLY, Treasurer.

"(Countersigned) T. EDWARD ADDICKS, President.

"(Indorsed)

"STATEN ISLAND TERRA COTTA LUMBER CO.

"GEORGE A. KELLY, Treas.

"J. EDWARD ADDICKS."

Said note is now due and unpaid and is in the possession and ownership of the plaintiff. Plaintiff received the same for a valuable consideration before maturity. Said note was duly protested for nonpayment, the cost of the protest being $1.64.

Plaintiff therefore claims of defendant the said sum of $2,138.54, together with the interest thereon from March 27, 1895.

Defendant's affidavit of defense was as follows:

J. Edward Addicks, the defendant in the above cause, being duly sworn, deposes and says, that he has a just and true defense to the cause of action set forth in the plaintiff's statement in the above cause, the nature and character of which is as follows:

That the note upon which the suit was brought was made by the Staten Island Terra Cotta Lumber Company for coal furnished by the plaintiff but indorsed by this deponent without consideration for the accommodation solely of John W. Peale, who knew that the same was so indorsed without consideration, and who requested that this be done so that he might use it with his banks.

All of which facts this deponent avers to be true, and believes and expects to be able to prove on the trial of the above cause.

The court made absolute a rule for judgment for want of a sufficient affidavit of defense.

Error assigned was above order.

Judgment reversed and a procedendo awarded.

C. Berkeley Taylor, for appellant. -- Paper indorsed for the accommodation of a party so as to assist that party in raising money upon it cannot be enforced against the accommodating party while it still remains in the hands of the party accommodated: Story on Promissory Notes, sec. 190; Daniels on Negotiable Instruments, sec. 189; Byles on Bills, Wood ed. 1891, p. 223; 2 Am. & Eng. Ency. of Law, 364; Thompson v. Clubley, 1 M. & W. 212; Patten v. Pearson, 55 Me. 39; Larned v. Ogilby, 20 Iowa 410; Moore v. Baird, 30 Pa. 138; Philler v. Patterson, 168 Pa. 468; Bower v. Hastings, 36 Pa. 285; Small v. Smith, 1 Denio, 583.

John G. Johnson, for appellee. -- An accommodation note is one given by a maker or indorser to another, without a consideration moving either to himself or to some person he wishes to oblige. In the present case the party benefited by the note was the lumber company, of which Addicks was president. Full consideration for the note was given by Peale. In consequence of the indorsement he might have been able to have made a use of the note in bank which was not otherwise possible, but such possibility of use did not impair the legal effect, generally, of the indorsement.

Before STERRETT, C.J., GREEN, WILLIAMS, MITCHELL and DEAN, JJ.

OPINION

MR. CHIEF JUSTICE STERRETT:

In several recent cases we have held that to entitle a plaintiff to judgment for want of a sufficient affidavit of defense his statement under the act of 1887 must set forth, in clear and concise terms, a good cause of action, by which is meant such averments of fact as would, if not controverted, entitle him to a verdict for the amount of his claim. In that respect, there is no substantial difference between a special count in a declaration under the time-honored system of pleading and its legislative substitute enacted in 1887: Bank v. Ellis, 161 Pa. 241; Newbold v. Pennock, 154 Pa. 591. Under the former, it was necessary, as a general rule, in an action against an indorser to aver in the declaration and prove on the trial, presentation of the note to the maker at maturity, demand of payment and notice to the indorser of his default or refusal to pay. This was necessary because indorsement of a negotiable note, without more, creates merely a contingent liability which becomes absolute only when the maker, upon proper presentation at maturity, fails to pay, and notice thereof is given to the indorser, unless the latter has in due form waived demand and notice. An exception to the general practice under the old system existed under the act relating to the district court of Philadelphia, and its supplements extended to several counties. Under that act when a copy of the indorsed instrument was filed, as therein provided, it was not necessary to aver that all the preliminary steps, such as presentment, demand, etc., necessary to fix the indorser, had been taken. If they had not been taken, the defendant was bound to say so in his affidavit of defense: McConeghy v. Kirk, 68 Pa. 200. But, in Newbold v. Pennock, 154 Pa. 591, this court held that the act referred to, and others of same import, come under the operation of the repealing clause in section nine of the act of May 25, 1887; that "they (the district court act and the act of 1887) embrace the same subject, -- the filing of affidavits of defense and entering judgments for default thereof, -- and their provisions cannot stand together without establishing two methods of practice for reaching precisely the same result, or making a mongrel method which is not the one prescribed by either statute." It follows, therefore, that in an action against an indorser, the plaintiff's statement under the act of 1887 must contain averments of presentation, demand, notice, etc., necessary to fix the indorser.

In the case at bar, the statement contains no such averments. The nearest approach thereto is the following clause, referring to the note in suit: "Said note was duly protested for nonpayment, the costs of protest being $1.64." This averment is a conclusion of law rather than a statement of facts from which the conclusion may be...