Peters v. Nolan Coal Co.

• Decision Date: 26 February 1907
• Citation: 61 W.Va. 392
• Court: West Virginia Supreme Court
• Parties: Peters v. Nolan Coal Company et nl.

61 W.Va. 392

Peters

v.Nolan Coal Company et nl.

Supreme Court of Appeals of West Virginia.

Submitted January 22, 1907.

Decided February 26, 1907.

1. Bills and Notes Indorsement Before Delivery Rights of Payee.

The law respecting the right of election by the payee of negotiable paper to hold irregular indorsers thereof as joint makers, or as guarantors or indorsers, as declared in Oolding Sons Go. v. Cameron Pottery Company, decided at the October term, 1906, and in Miller v. Clendennin, 42 W. Va. 416, and Long v. Campbell, 37 W. Va. 665, re-affirmed and applied to this case. (p. 393.)

2. Same.

The right of election by the payee in such cases is determined by the contrast made before or at the time of the making and delivery of the paper to the payee, unaffected by the subsequent dealings of the payee with the paper; and such right extends to renewals of such paper by the same parties, unless a new contract is shown, (p. 393.)

3. Evidence Admissions Recitals in Deed Admissibility.

A deed containing admissions of facts generally conclusive between parties and their privies, amounting to declarations of a pecuniary or proprietary nature against their interest, is admissible in evidence by a stranger, whether plaintiff or defendant, against all the other parties to the suit who have a joint interest in the matter of it with the party making the admission, (p. 896,)

4. Bills and Notes Actions Instructions.

Instructions to juries on the trial of actions by payees against the maker and the irregular indorsers of such paper, which ignore the element of contract between payee and such indorsers necessary to deprive him of such prima facie right of election are properly refused (p. 398.)

5. Same.

The law of such contracts applied, to a case in which the evidence was not sufficient to overcome the prima facie right of election by the payee of such irregularly indorsed paper. (p. 398.)

Error to Circuit Court, Mercer County.

Action by W. J. Peters against the Nolan Coal Company and others. From a judgment in favor of plaintiff, defendants B. Moore and another bring error.

Affirmed.

H. A. Ritz, for plaintiffs in error.

James II. Gollehon and Hale & Pendleton, for defendants in error.

Miller, Judge:

In the circuit court there was a verdict and judgment thereon in favor of the plaintiff, W. J. Peters, against B. Moore and T. L. Henritze for $1061.17. The usual motions to set aside the verdict, to arrest judgment thereon, and for a new trial, were overruled. The declaration was debt, in five counts, to which and to each count a demurrer was interposed and overruled. While the petition for the writ of error makes this ruling of the court one of its points of objection to the judgment, the point seems to be abandoned in the briefs and arguments of counsel; for it is not mentioned therein, and no grounds therefor are assigned. As we do not perceive any material objection to the declaration, so that a judgment thereon according to the very rights of the case may not stand, we will take no further notice of the point.

The immediate cause of action was a negotiable note dated January 19, 1905, purporting to have been made and signed by the Nolan Coal Company by B. Moore, treasurer, whereby one hundred and twenty days after date iiwe promise to pay to the order of W. J. Peters one thousand dollars, negotiable and payable at the Bank of Bramwell, Brctmtvell, W. Va. Homestead ami all other exemptions waived by the maker and each indorsee. Value received." At the time the note was made, and before it was delivered to the payee, it was indorsed by B. Moore and T. L. Henritze, and the pleading's and proof show that it wras thus made and indorsed and delivered in renewal of a previous note of like amount, made and indorsed and delivered to the plaintiff by the same maker and indorsers, in consideration of $1000 advanced by him by his check to the defendant Henritze, as attorney for the coal company, to pay on the debts of that company in accordance with an agreement with creditors previously negotiated by Moore and Henritze on behalf of the company.

The plaintiff, who advanced the money on the original note, some fourteen days afterwards indorsed his own name before the names of Moore and Henritze, and negotiated it at the Bank of Bramwell. Afterwards he accepted the said renewal note so made, on the same terms of security, and used it in the bank to take up the old note. He has elected to treat these irregular indorsers as makers, and as primarily liable to him, and has sued them as such.

Our previous decisions, and the authorities therein cited as binding us, so clearly state the law respecting the rights of the holder and the liabilities of such irregular indorsers of negotiable paper, that we need only refer to them. As there stated, the law is that when one makes a negotiable note to a payee, and others put their name on the back of it, the payee not indorsing it, and it is then delivered to the payee, he may treat them all as joint makers, or he may treat those putting their names on the back of the paper as indorsers or guarantors, at his election, unless he agrees before or on the delivery of the paper to treat them in a particular one of those characters. Burton v. Hansford, 10 W. Va. 481; Long v. Campbell, 37 W. Va. 665, and cases cited; Roanoke G. & M. Co. v. Watkins, 41 W. Va 787; Miller v. Glendennin, 42 W. Va. 416; Golding Sons Co. v. Cameron Pottery Co., opinion by Judge Sanders, de- cided at the October term of this Court. The rule stated above is substantially in the language of Judge Brannon in Miller v. Clendennin, and of Judge Sanders in the last case decided by this Court. While the words "indorser" and "security," used by the witnesses in this case, have ordinary, legal and technical meanings, yet, as Judge Brannon says in Miller v. Clendennin, supra, with reference to the evidence in that case, "even if 'indorser' were used it would not alone tie Miller down to regard the parties as such, as it would be construed only in the general sense of surety."

The point is made in this case that the note sued on, the renewal note, and also the original note, after they were made and the money was advanced by the payee, Peters, he indorsed his name ahead of Moore and Henritze, and discounted the same in the bank, thereby evidencing an agreement to be either held first liable, or bound jointly with the other indorsers. This would be true as to the bank that discounted the note for Peters; but as between Peters, and the maker and indorsers, they are bound according to the original contract at or before the time the paper was made and delivered to Peters, and the right of election of the payee would not be destroyed by any subsequent disposition of the paper by him. In the case of Orriek v. Colston, 7 Grat. 189, the payee, after the note was made and delivered to him, and before he sued the maker and indorser, wrote above the name of the indorser:" In consideration of the loan of $1000 by the payee, I guarantee the payment of the within sum of money." The declaration in the case charged Colston both as original surety for the debt and also guarantor, and the court held it was competent for the payee to make his election at any time. In Miller v. Clendennin, the evidence was that the payee, Miller, some four years after the note matured, and after Clendennin, the maker, had become insolvent, asked him to give him a new note, saying that he had no security on that note at all; that he could not hold Barbee and Mossman any longer; and that he had also said to Mossman that he wanted him and Barbee to give a new note, that he could no longer hold them, the time having expired. Judge Brannon, commenting on this evidence, says:" What does this talk mean? Not a release, for he still claimed the debt, and there was no consideration for a release. But it is not relied upon as a release, but as showing that from the beginning Miller regarded Barbee and Mossman as indorsers. Unless such was the agreement, he could change his mind at any time, even if he so intended, or, through ignorance of law, knew no better, for, as said in Hansford v. Burton, supra, the payee may exercise the option to treat those who put their names on the note in one character or another at any time, and so long as he holds the note it may be changed at his pleasure, even after suit."

These authorities clearly indicate that the rights and liabilities of the parties to such paper are to be determined by the facts existing at the time of the original transaction. The indorser Moore in his testimony says, it was his understanding that the note was to have been discounted in the Bank of Bramwell to meet Peters' check, but he is not supported in this by the evidence of either Peters or Henritze. The cases of Miller v. Clendennin, pp. 481, 419, and Long v. Campbell, there cited, decide that all such agreements or understandings affecting the prima facie rights of the payee of such irregularly indorsed paper must be shown to have been had or made with the payee in order to deprive him of such rights.

The questions of fact, whether by the agreement between the maker and the indorsers, and the payee of the original and the renewal note sued on, the indorsers were to be treated as joint makers, or as guarantors or indorsers, were all in issue before the jury; and we can not fdisturb their verdict, except upon the well settled rules of law.

But preliminary to that subject, and as...