Schwartz v. Wilmer

• Decision Date: 24 November 1899
• Citation: Schwartz v. Wilmer, 90 Md. 136, 44 A. 1059 (Md. 1899)
• Parties: SCHWARTZ et al. v. WILMER.
• Court: Maryland Court of Appeals

44 A. 1059

90 Md. 136

SCHWARTZ et al. v. WILMER.

Court of Appeals of Maryland

November 24, 1899

Appeal from court of common pleas; Henry D. Harlan, Judge.

Suit by Edwin M. Wilmer against M. Schwartz & Sons. Judgment for plaintiff. Defendants appeal. Reversed.

Argued before MCSHERRY, C.J., and PAGE, PEARCE, FOWLER, BOYD BRISCOE, and SCHMUCKER, JJ.

Simon & Godwin and Steiner & Putzel, for appellants. D. Eldridge Monroe, for appellee.

PAGE J.

This suit was brought by the appellee to recover against the appellants as indorsers of a note drawn by one Dorf to the appellants. It was received and indorsed by the appellants for the accommodation of the maker. It was then indorsed by the latter, and sold to the appellee for a valuable consideration. At the time it passed into the hands of the appellee, the words "Protest waived" appeared on the back, above the names of the several indorsers. The appellee testified the words were on the back of the note when it was first presented to him, but that he did not know when or how the words got there; that they did not seem to be in the handwriting of the appellants, and he then thought they were in the handwriting of Dorf; that he did not know it was accommodation paper, and had no knowledge concerning it other than what appeared upon the face of it and the indorsements thereon; and that he had relied upon the effect of the words waiving protest. He further testified that about 10 days after the maturity of the note he went to Mendel Schwartz and Jacob Schwartz two of the three members of the firm of M. Schwartz & Sons and asked them whether or not the signature of M. Schwartz & Sons on the back of the note was genuine, and told them the amount due upon it was unpaid, and that "he had exhausted every effort to get Mr. Dorf to pay it, and that unless it was paid he would reduce it to judgment," to which they replied that the signature was genuine, and that, "if Mr. Dorf did not pay it, they were able, and would pay it for him," and that the witness must "go ahead and sue" on it. This conversation was denied, however, by the two Schwartzes referred to, who testified, substantially, that they did tell him that the signature was genuine, and made with the authority of the firm, but that neither of them said that the firm would pay the note if Dorf did not; that the firm, nor any member thereof, had not received notice before that time that the note had not been paid; that the firm had passed and indorsed notes for Dorf frequently; that the words "Protest waived" were not on the back of the note when it left their hands, and had been put there without the knowledge or authority of the firm or of any member of it.

During the cross-examination of the appellee he was asked what, in his opinion, was the effect of the words "Protest waived." On objection, the court refused to allow the question. This ruling was clearly without error. The effect of the words was matter of law, to be determined by the court; and the opinion of the witness was not admissible, as an expert, to vary the terms of a written instrument. Artz v. Grove, 21 Md. 474.

While the cross-examination of the appellee was being further continued, the appellants offered to read in evidence a letter written by the appellee to the maker of the note, bearing date two days before the time of the maturity of the note. It contained a statement of the time when the note would mature, a statement of the amount, and requested payment by the substitution of a new note. Appended thereto was a blank note, indorsed with the form in blank of a waiver of protest. This note was never executed, and there was no offer to show any connection with the transaction forming the subject of the present controversy. The court refused to allow it to go to the jury, and this action constitutes the appellants' second exception. The proposed evidence was irrelevant to any of the issues in the case, and was properly rejected.

The third exception was to the refusal of the court to allow the counsel for the appellants to ask the appellee, on cross-examination, whether Dorf told him it was accommodation paper. The appellee was a purchaser of the note in due course, and a holder for value; and in such case the accommodation party is liable, whether such holder at the time of taking the instrument knew him to be only an accommodation party or not. Rhinehart v. Schall, 69 Md. 356, 16 A. 126.

The fourth exception was to the overruling of a motion of the defendants to exclude from the evidence the cause of action because of a material alteration therein; and the fifth was to the rejection of the six prayers of the defendants, and the granting of the plaintiff's prayer. The prayer granted was to the effect that if the jury find that, at the time the note was indorsed to the appellee, the words "Protest waived" were written above the name of M Schwartz & Sons, and that after the maturity of the note, and the failure of Dorf to pay the same, the appellee presented it to the appellants, and that "two members of the firm acknowledged the genuineness of the firm name thereon, and promised and declared to the plaintiff that if the maker, Dorf, did not pay the said note, the indorsers, M. Schwartz & Sons, would pay the same, then their verdict must be for the plaintiff." It has been well settled for a long time that failure to give notice of dishonor of a bill may be waived, either before the time of giving notice has arrived, or after the omission to give the notice, and the waiver may be express or implied. This general principle, since the maturity of the note in question, has been formally incorporated in our statutes (Negotiable Instrument Act, c. 119, subc. 8, § 128); but it was long established, before the passage of that act. It also seems to be well settled that a promise by the indorser to pay the note, after there has been a failure to give due notice of its dishonor, will bind the indorser, provided he had full knowledge of the laches when the promise was made. The authorities to sustain this statement are set out in 4 Am. & Eng. Enc. Law (2d Ed.) p. 463, tit. "Bills and Notes," but we deem it unnecessary to refer to them more particularly, from the fact that our own court has clearly announced the same principle. In Turnbull v. Maddux, 68 Md. 587, 13 A. 334, the note was not protested at maturity, but the "plaintiff based his right of recovery upon the fact that the defendant promised to pay the note after its maturity, and with full knowledge of the fact that the note had not been presented for payment at maturity, and that no notice had been given him of its nonpayment." "Notice," the court proceeds to say, "of the nonpayment of a note at its maturity, is the privilege of the indorser, but it is a right which he may waive, and he is considered to have waived his privilege, if, with the knowledge of that fact, he promises to pay the note." This prayer is, however, defective, in that it fails to require the jury to find as a fact that, at the time of the alleged promise, Schwartz & Sons had knowledge...