Schultz v. Howard

• Decision Date: 13 December 1895
• Citation: 65 N.W. 363,63 Minn. 196
• Parties: SCHULTZ ET AL. v. HOWARD ET AL. (TWO CASES). SAME v. WORLD'S FAIR MASONIC HOTEL CO. ET AL. (TWO CASES).
• Court: Minnesota Supreme Court

63 Minn. 196

65 N.W. 363

SCHULTZ ET AL.

v.HOWARD ET AL. (TWO CASES).

SAME

v.WORLD'S FAIR MASONIC HOTEL CO. ET AL. (TWO CASES).

Supreme Court of Minnesota.

Dec. 13, 1895.

(Syllabus by the Court.)

The obligation of “irregular indorsers” of a promissory note, who are liable as original promisors or makers, is joint and several, and not joint, with the obligation of the makers who sign their names at the foot of the note, although the instrument is in form in other respects joint.

Appeals from district court, Hennepin county; Robert D. Russell, Judge.

Action by James M. Schultz and Alexander J. Schultz, partners under the firm name of Schultz Bros., against John C. Howard and others, on notes made by the World's Fair Masonic Hotel Company, on which notes the above-named defendants were indorsers. From an order sustaining a demurrer to defendants' answer, they appeal. Affirmed.

Louis A. Reed, for appellants.

James O. Pierce, for respondents.

MITCHELL, J.

This was an action on two promissory notes, upon which defendant Lynn was guarantor, and the other defendants makers. The case comes here on appeal from an order sustaining a demurrer to defendants' second defense, by which they claim that they were released by reason of the plaintiffs having previously obtained judgment upon the notes against another maker alone, who is not a party to this action. The principle sought to be invoked is that joint contractors must all be sued together; that, if one is omitted, the nonjoinder may be pleaded in abatement. Hence, if the cause of action against one of the joint contractors is merged in a judgment, the others are released, because it is then impossible to maintain a joint action against all. We nowhere find in the pleadings anything to show that the notes sued on were in form joint, and not joint and several; and on that ground alone the order appealed from might be affirmed. But both sides have argued the case on the assumption that the notes are of the following tenor:

“$7,000.00. Chicago, March 20th, 1893. April first, after date, for value received, we promise to pay to the order of Schultz Bros. seven thousand and no 100 dollars, at the Globe National Bank, with interest at - per cent. per annum, after -, until paid. World's Fair Masonic Hotel Co., by J. C. Howard, President.”

Indorsed: “J. C. Howard, J. W. Nash, W. M. Brackett, J. W. Stone.

“I hereby guaranty the collection of the within note, if not paid at maturity. Value rec'd. W. H. Lynn.”

The other note is of like tenor, except as to amount and time of payment. The judgment alleged in the answer to have been obtained on the notes in the state of Illinois was against the World's Fair Masonic Hotel Company, an Illinois corporation. It stands admitted that those whose names are written on the back of the notes signed them at the date of their execution for the purpose of giving credit to the hotel company with the plaintiffs, and as security for the payment of the notes. Hence, according to the law of this state,-and, in the absence of an allegation to the contrary, we must assume that the law of Illinois is the same,-the defendants Howard, Nash, Brackett, and Stone were original promisors or makers, although, as between themselves and the hotel company, they were mere sureties for the latter. Counsel for plaintiff cites in his brief the statute of Illinois, to the effect that “all joint obligations and covenants shall be taken and held to be joint and several obligations and covenants.” Assuming that the Globe National Bank, at which the notes were payable, is in Illinois, this statute, if pleaded, would have been decisive of the case, for it is settled law that the place of the contract regulates its validity, interpretation, and the nature of its obligation. By “nature” is meant those qualities which inhere in and pertain to it; as whether it is...