Peter v. Finzer, No. 25196.

• Court: Supreme Court of Nebraska
• Writing for the Court: EBERLY
• Citation: 217 N.W. 612,116 Neb. 380
• Docket Number: No. 25196.
• Decision Date: 24 January 1928
• Parties: PETER ET AL. v. FINZER.

116 Neb. 380
217 N.W. 612

PETER ET AL.
v.
FINZER.

No. 25196.

Supreme Court of Nebraska.

Jan. 24, 1928.

Syllabus by the Court.

The Negotiable Instruments Act (Comp. St. 1922, §§ 4612-4809) having been adopted by this state and others of the federal union for the purpose of securing uniformity and certainty in the laws throughout the country, should be so construed as to give effect to this design, words being given their natural and ordinary meaning, and the obvious meaning of the act being adhered to as closely as possible without reference to the law as previously existing in this state, unless necessary to dissolve obscurity or doubt, especially in instances where there was a difference in the law of the different states prior to such act.

Under the Negotiable Instruments Act (Comp. St. 1922, §§ 4671, 4801), providing: “The maker of a negotiable instrument * * * engages that he will pay it according to its tenor,” and “the person ‘primarily’ liable on an instrument is the person who by the terms of the instrument is absolutely required to pay the same”--the defendant herein is primarily liable on the instrument in suit, and cannot, in view of this case, be deemed secondarily liable thereon.

The mere fact of the making of a lawful agreement, binding upon the holder of a negotiable instrument to extend time of payment, or to postpone the holder's right to enforce such instrument, is not, of itself, a defense in favor of a person primarily liable thereon who may not have consented to such agreement of extension.

In construing our Negotiable Instruments Act adopted by the Legislature of this state, and also widely adopted by the Legislatures of different states, for the express purpose of securing uniformity, great weight will be given to the harmonious decisions of the courts of other states.

Merriam v. Miles, 54 Neb. 566, 74 N. W. 861, 69 Am. St. Rep. 731, examined, and held to be superseded by the provisions of the Negotiable Instruments Act.

Huber Mfg. Co. v. Silvers, 85 Neb. 760, 124 N. W. 148, 133 Am. St. Rep. 689, distinguished.

Appeal from District Court, Johnson County; Raper, Judge.

Action by Gustave Peter, Henry Peter, and others against Jacob Finzer on a note. On the death of plaintiff Henry Peter, the cause as to him was revived in the name of Emil Beethe, special administrator of the deceased's estate. From a judgment for defendant, plaintiffs appeal. Reversed.

[217 N.W. 612]

L. C. Chapman, F. C. Radke, and Magdelene C. Radke, all of Tecumseh, for appellants.

Jay C. Moore and Dafoe & Dafoe, all of Tecumseh, for appellee.

Heard before GOSS, C. J., ROSE, DEAN, DAY, GOOD, THOMPSON, and EBERLY, JJ., and REDICK, District Judge.

EBERLY, J.

This is an action at law upon a promissory note. The defense was, that at the time the action was instituted, the defendant's actual relation to the paper sued upon was that of a surety who had been discharged by reason of a lawful extension of the time of maturity, without his consent, made by the holder, to the then principal upon the obligation. Trial was had to a jury,

[217 N.W. 613]

resulting in a verdict for the defendant, from which plaintiff appeals.

The essential facts out of which this action arose, as disclosed by the record, are as follows: On March 2, 1918, defendant Finzer, for a valuable consideration, made and delivered to one Robert Sieber, as guardian for Charlotte Peter, his promissory note, negotiable in form, and, also, to secure the payment of the same, executed and delivered to said guardian a certain real estate mortgage covering certain real estate then owned by the mortgagor. The plaintiffs in this action lawfully derive their title to the note from Sieber, the guardian. They elected to bring an action at law upon the note alone, claiming, in this action, no rights under the terms of the mortgage given to secure the same. Defendant Finzer filed an answer: (1) Admitted the execution of the note sued upon; (2) alleged the contemporaneous execution and delivery of the mortgage to secure the same; (3) that subsequently, by mesne conveyances, the mortgaged premises were conveyed by the mortgagor to Bodie, by Bodie to Jobes, and by Jobes to Cayou, and by Cayou to Rapp; that, as parts of each of the transactions above referred to, there was, for a valuable consideration, an assumption of the mortgage indebtedness by each of the grantees above set forth, and in each deed of conveyance, above referred to, appears the recital of such assumption as part of the consideration of such conveyance by the respective grantees therein named; that Sieber, as guardian, had actual knowledge of all the facts set forth, and with such knowledge, upon maturity of the note evidencing the obligation in suit, without the consent of the defendant, made certain valid agreements of extension of the time of maturity of indebtedness with certain of the grantees above named who had previously assumed and agreed to pay the same.

On the basis of the facts set forth in his answer, the defendant, in the court below, as a matter of law, contended that, where one buys land incumbered by a mortgage debt and, as part of the consideration of purchase, assumes the payment thereof, his promise creates a principal obligation which the mortgagee may enforce against him; that the maker of the note and mortgage thereafter, between the parties, sustains the relation of surety only; that a subsequent agreement by the mortgagee and payee with such subsequent grantee, without the assent of the grantor and mortgagor, extending time of payment of the debt, evidenced by the note and mortgage which has been assumed by such grantee, discharges the maker and mortgagor from all personal liability thereon. This conclusion seems fully supported by the doctrine announced by this court in Merriam v. Miles, 54 Neb. 566, 74 N. W. 861, 69 Am. St. Rep. 731, determined in 1898.

The controlling question now presented is, to what extent, if any, has the doctrine thus announced been modified or affected...