Salisbury v. First National Bank of Cambridge City

• Citation: 56 N.W. 727,37 Neb. 872
• Decision Date: 17 October 1893
• Docket Number: 4962
• Parties: JOHN G. SALISBURY ET AL. v. FIRST NATIONAL BANK OF CAMBRIDGE CITY ET AL
• Court: Supreme Court of Nebraska

56 N.W. 727

37 Neb. 872

JOHN G. SALISBURY ET AL. v. FIRST NATIONAL BANK OF CAMBRIDGE CITY ET AL

No. 4962

Supreme Court of Nebraska

October 17, 1893

ERROR from the district court of Douglas county. Tried below before HOPEWELL, J.

AFFIRMED.

Brome Andrews & Sheean, for plaintiffs in error:

The plaintiffs in error are liable upon the note as indorsers only. (Ellis v. Brown, 6 Barb. [N.Y.] 282; Spies v. Gilmore, 1 Comst. [N.Y.] 321; Cottrell v Conklin, 4 Duer [N.Y.] 45; Moore v. Cross, 19 N.Y. 227; Bacon v. Burnham, 37 N.Y. 614; Phelps v. Vischer, 50 N.Y. 69; Slack v. Kirk, 67 Pa 380; Clouston v. Barbiere, 4 Sneed [Tenn.] 336; Fear v. Dunlap, 1 Greene [Iowa] 331; Pierce v. Kennedy, 5 Cal. 138; Jones v. Goodwin, 39 Cal. 493; Jennings v. Thomas, 13 Smedes & M. [Miss.] 617; Coulter v. Richmond, 59 N.Y. 479; Jaffray v. Brown, 74 N.Y. 394; Lynch v. Levy, 11 Hun [N.Y.] 145; Paine v. Noelke, 53 How. Pr. Rep. [N.Y.] 273; Whiting v. Pittsburgh Opera House Co., 88 Pa. 101.) The plaintiffs in error are not liable as makers. (Webster v. Cobb, 17 Ill. 459; Blatchford v. Milliken, 35 Ill. 434; Greenough v. Smead, 3 Ohio St. 415; Seymour v. Leyman, 10 Ohio St. 283; Sturtevant v. Randall, 53 Me. 154; Lowell v. Gage, 38 Me. 36; Cook v. Southwick, 9 Tex. 615; Carr v. Rowland, 14 Tex. 275; Chandler v. Westfall, 30 Tex. 477; McGwire v. Bosworth, 1 La. Ann. 248; Chorn v. Merrill, 9 La. Ann. 533; Killian v. Ashley, 24 Ark. 511.) The court below should have permitted oral testimony on the part of plaintiffs in error, showing the intent with which they indorsed the note and the fact that they were not interested in the consideration. Where a stranger signs a note on the back before delivery to the payee he is only prima facie liable as an original promisor. (Sylvester v. Downer, 20 Vt. 355; Schneider v. Schiffman, 20 Mo. 571; Childs v. Wyman, 44 Me. 433; Perkins v. Barstow, 6 R.I. 505; Currier v. Fellows, 7 Fost. [N. H.] 366; Carpenter v. Oaks, 10 Rich. [S. Car.] 17; Cecil v. Mix, 6 Ind. 478; Peckham v. Gilman, 7 Minn. 446; Vore v. Hurst, 13 Ind. 555; Orrick v. Colston, 7 Gratt. [Va.] 189.)

Congdon & Clarkson, contra:

It being admitted that the names were upon the back of the note at its delivery to the payee, the liability of the irregular indorsers is fixed presumptively as that of joint makers, and in the absence of an allegation to support parol evidence combating the presumption, parol evidence is inadmissible, particularly against a bona fide holder for value before maturity. (Robinson v. Bartlett, 11 Minn. 410; Cayuga County National Bank v. Dunkin, 29 Mo.App. 442; Melton v. Brown, 6 So. Rep. [Fla.] 211; Rothschild v. Grix, 31 Mich. 150; Weatherwax v. Paine, 2 Mich. 555; Sibley v. Muskegon Nat. Bank, 41 Mich. 196; Derry Bank v. Baldwin, 41 N.H. 434; Schroeder v. Turner, 13 A. 331 [Md.]; Stevens v. Parsons, 14 A. 741 [Me.]; Bellows Falls Nat. Bank v. Dorset Marble Co., 61 Vt. 106; Cahn v. Dutton, 60 Mo. 297; Schmidt v. Schmaelter, 45 Mo. 502; Bradford v. Martin, 3 Sand. [N.Y.] 647; Western Boatman's Benevolent Association v. Wolff, 45 Mo. 104; Lowell v. Gage, 38 Me. 35; Woods v. Woods, 127 Mass. 141; Spaulding v. Putnam, 128 Mass. 363; Austin v. Boyd, 24 Pick. [Mass.] 64; Hawks v. Phillips, 7 Gray [Mass.] 284; Semple v. Turner, 65 Mo. 696; Buchner v. Liebig, 38 Mo. 188; Leonard v. Wildes, 36 Me. 265; Schley v. Merrit, 37 Md. 352; Nathan v. Sloan, 34 Ark. 524; Chandler v. Westfall, 30 Tex. 477; Syme v. Brown, 19 La. Ann. 147; Burton v. Hansford, 10 W.Va. 470; Way v. Butterworth, 108 Mass. 512; Union Bank of Weymouth v. Wills, 8 Met. [Mass.] 504; Brown v. Butler, 99 Mass. 179; Good v. Martin, 95 U.S. 90; Draper v. Weld, 13 Gray [Mass.] 580; Herbage v. McEntee, 40 Mich. 337; Pearson v. Stoddard, 9 Gray [Mass.] 199; Clapp v. Rice, 13 Gray 403; Woodman v. Boothby, 66 Me. 389; Third National Bank of Baltimore v. Lange, 51 Md. 138; Hoffman v. Moore, 82 N.C. 313; Tiedeman, Commercial Paper, sec. 271.)

OPINION

The facts are stated in the opinion.

NORVAL, J.

This action was brought in the court below by the First National Bank of Cambridge City, Indiana, against the plaintiffs in error and one Cora H. Sloman as makers, and the Bank of Omaha as indorser, of a promissory note, of which the following is a copy:

"$ 2,500.00. OMAHA, NEB., Feb. 15, 1889.

"Ninety days after date, we, or either of us, promise to pay to the Bank of Omaha, or order, twenty-five hundred and no/100 dollars, for value received, payable at the Bank of Omaha Omaha, Neb. with interest at the rate of ten per cent per annum from maturity until paid.

"C. H. SLOMAN."

At the time of the making of said note and its delivery to the payee the names of J. G. Salisbury and S. A. Sloman appeared upon the back thereof. Subsequently, but before the maturity of the note, it was indorsed and transferred by the Bank of Omaha to the defendant in error, The First National Bank of Cambridge City. No notice of non-payment was given to J. G. Salisbury and S. A. Sloman at maturity. The note was sent by the plaintiff below to the Bank of Omaha for collection prior to its maturity, where it remained until after the same fell due. The Bank of Omaha made no defense. Cora H. Sloman set up two defenses: First, payment; and second, coverture. The former she withdrew upon the trial. Salisbury and S. A. Sloman each filed a separate answer, which "denies that he executed and delivered the promissory note described in the petition, but avers and charges the fact to be that the defendant, at the time of the delivery of said note to the Bank of Omaha, was simply accommodation indorser thereon, the name of this defendant being written across the back of said note. Nor did said defendant receive any part of the consideration for which said note was given." Each answer further alleged that the note was not protested for non-payment, nor was notice of non-payment given to the defendants at the time of the maturity thereof.

Plaintiff replied by a general denial.

Upon the trial the jury, under the instructions of the court, returned a verdict in favor of the plaintiff, and against all the defendants for the full amount of the note and interest. Separate motions for a new trial were filed by plaintiffs in error and Cora A. Sloman, which were overruled, and judgment entered on the verdict.

The question to be considered by this court is this: Were plaintiffs in error liable as makers of said note, or were they chargeable as accommodation indorsers, merely? If the obligation they assumed by indorsing their names upon the back of the note, before its delivery to the payee, was that of maker, the judgment under review was right; otherwise, not, inasmuch as no notice of non-payment at maturity was given to plaintiffs in error. The kind of liability that the law presumes is assumed by one who signs his name in blank upon the back of a negotiable promissory note at the time of its execution, and before its delivery to the payee, has never been passed upon or decided by this court, and there is a great diversity of holding upon the question by text writers and courts in this country.

Several courts of high standing sustain the doctrine for which plaintiffs in error contend, namely, that, where a stranger writes his name across the back of a note before its delivery to the payee, he is liable thereon as an indorser. (Moore v. Cross, 19 N.Y. 227; Phelps v. Vischer, 50 N.Y. 69; Slack v. Kirk, 67 Pa. 380; Clouston v. Barbiere, 4 Sneed [Tenn.] 336; Jennings v. Thomas, 13 Smedes & M. [Miss.] 617; Jones v. Goodwin, 39 Cal. 493.)

There is another line of decisions which hold that a person so indorsing a note is chargeable, prima facie, as a grantor. (Webster v. Cobb, 17 Ill. 459; Blatchford v. Milliken, 35 Ill. 434; Lowell v. Gage, 38 Me. 35; Sturtevant v. Randall, 53 Me. 149; Cook v. Southwick, 9 Tex. 615; Killian v. Ashley, 24 Ark. 511.)

The decided weight of authority supports the rule adopted by the trial court in this case, and that is that plaintiffs in error are liable as joint makers. (Story, Promissory Notes, secs. 468, 469; Good v. Martin, 95 U.S. 90, 24 L.Ed. 341; First Nat. Bank of Worcester v. Lock-Stitch Fence Co., 24 F. 221; Bendey v. Townsend, 109 U.S. 665, 3 S.Ct. 482, 27 L.Ed. 1065; Chaddock v. Vanness, 35 N.J.L. 517; Quin v. Sterne, 26 Ga. 223; Sylvester v. Downer, 20 Vt. 355; National Bank v. Dorset Marble Co., 61 Vt. 106, 17 A. 42; Robinson v. Bartlett, 11 Minn. 410; Peckham v. Gilman, 7 Minn. 446; Schmidt v. Schmaelter, 45 Mo. 502; Cahn v. Dutton, 60 Mo. 297; Melton v. Brown, 25 Fla. 461, 6 So. 211; Wetherwax v. Paine, 2 Mich. 555; Sibley v. Muskegon Nat. Bank, 41 Mich. 196, 1 N.W. 930; Moynahan v. Hanaford, 42 Mich. 329, 3 N.W. 944; Flint v. Day, 9 Vt. 345; Sandford v. Norton, 14 Vt. 228; Stevens v. Parsons, 80 Me. 351, 14 A. 741; Schroeder v. Turner, 68 Md. 506, 13 A. 331; Bright v. Carpenter, 9 Ohio 139; Derry Bank v. Baldwin, 41 N.H. 434; Perkins v. Barstow, 6 R.I. 505; Baker v. Robinson, 63 N.C. 191; Hoffman v. Moore, 82 N.C. 313; Brown v. Butler, 99 Mass. 179; Way v. Butterworth, 108 Mass. 509.) Many other authorities to the same effect could be cited.

In Bright v. Carpenter, supra, Lane, C. J., observes: "If a person, not a party, give his name to a note already existing, his engagement is collateral only, and he is to be held as guarantor; but if such a person sign his name to such a paper at the time of its execution, without prescribing the limits of his responsibility, he authorizes the holder to treat him as a maker, and is as much bound as if his name was written under that of the principal."

Judge Story, in discussing the question in his valuable work on Promissory Notes at section 469, says: "The principle upon which all these cases turn is the same; and that is, to...