Smith v. Myers

• Decision Date: 17 February 1904
• Citation: 207 Ill. 126,69 N.E. 858
• Parties: SMITH v. MYERS.
• Court: Illinois Supreme Court

207 Ill. 126

69 N.E. 858

SMITH

v.MYERS.

Supreme Court of Illinois.

Feb. 17, 1904.

Appeal from Appellate Court, First District.

Action by Dwight L. Smith against Johnston Myers. From a judgment of the Appellate Court (107 Ill. App. 410) affirming a judgment for defendant, plaintiff appeals. Affirmed.

Hoyne, O'Connor & Hoyne, for appellant,

Blewett Lee, for appellee.

RICKS, J.

This is an appeal from the Appellate Court for the First District affirming a judgment of the circuit court of Cook county against appellant for costs in a suit brought by appellant against appellee in an action of assumpsit. The action was upon the following instrument in writing:

‘Waterbury, Conn., Aug. 1, 1893. One year after date I promise to pay to the order of Norman D. Grannis thirty-five hundred dollars at the Fourth National Bank. Value received, with interest at six per cent. per annum and taxes. Due August 1, 1894. W. C. Myers.’

Indorsed on the back as follows:

‘Feb. 8, 1894, rec'd $532.87 on within note.

‘Dec. 3, 1894, rec'd on within note $49.23.

‘Dwight L. Smith, Aug. 3d, 1893.

‘Rev. Johnston Myers, Cin., O., July 31, 1893.

‘N. D. Grannis.’

The declaration contained two special counts and the common counts. The first special count was by appellant as second indorser, and against appellee as first indorser. The second special count was by appellant, as indorser or assignee of the note, against appellee as indorser. The averment in each count was that the indorsement was made before the delivery of the note; that the contract was made and delivered at Waterbury, Conn., and that by the laws of that state the blank indorsement of a negotiable or nonnegotiable note by a person who is neither its maker nor its payee, before or after its indorsement by the payee, shall import the contract of an ordinary indorsement of negotiable paper, as between such indorser and the payee or subsequent holder of such paper.

When the instrument and the indorsements sued on were offered in evidence, objection thereto was made by counsel for appellee, first, on the ground of variance between the instrument and the declaration; second, because a material alteration appears to have been made by adding the words ‘Aug. 3d, 1893,’ after the signature ‘Dwight L. Smith’; third, because it appears from the note that Smith is a prior indorser, and therefore cannot recover from Myers, a subsequent indorser; and, fourth, because the words ‘and taxes' make the amount due uncertain, and deprive the note of negotiability. A specific objection was made to the words ‘Aug. 3d, 1893,’ after the signature of Dwight L. Smith, upon the ground that such words were, in effect, the offering of parol evidence to change or vary the effect of Smith's indorsement. To these objections the court ruled, ‘For the present, I will admit the note in evidence.’ Appellant then proved, by depositions, that the payee and maker of the note, as well as appellant, all lived, at the time of the execution and delivery of the instrument, in Waterbury, Conn., and also proved that, after the time of payment arrived, payment was not made by the maker, and protest was had for nonpayment; that the amounts appearing as credits upon the instrument were paid by the trustees of the maker, the latter having become insolvent; and that appellant paid the balance due thereon at the time he received the note. There was no proof of any consideration having been paid appellee for his indorsement.

Appellee introduced in evidence sections 1860 and 3828 of the General Statutes of Connecticut in force January 1, 1888, as follows:

‘Sec. 1860. The blank endorsement of a negotiable or non-negotiable note by a person who is neither its maker nor its payee, before or after the endorsement of such note by the payee, shall import the contract of ordinary endorsement of negotiable paper, as between such endorser and the payee or subsequent holders of such paper.’

‘Sec. 3828. Personal property in this state or elsewhere, not exempt by its title, shall, for the purpose of taxation, include all notes, bonds and stocks,’ etc.

Appellant offered to prove a certain conversation between him and the maker of the note at the time he became an indorser, for the alleged purpose of showing that it was a condition of his indorsement that appellee should also indorse, and further offered to prove by certain alleged letters of appellee that appellee had recognized or admitted some liability to appellant by reason of having indorsed the instrument, and had made certain offers of settlement. This evidence was excluded by the court.

The trial was before a jury, and appellant asked the court to instruct the jury to find a verdict for him. This instruction the court refused, and, at the request of appellee, gave an instruction to find the issues for the defendant, which was done, and judgment for defendant for costs was accordingly entered.

Numerous errors are assigned, among which are the refusal of the court to admit the excluded evidence mentioned, and the admission of certain evidence on behalf of appellee, and the refusal of the court to give the instruction asked by appellant, directing a verdict in his behalf, and the giving of the instruction as requested by appellee.

The contention of appellant is that the instrument sued on is a promissory note, carrying with it all the legal effects and incidents of such writing, while the appellee contends that said instrument is only an ordinary contract for the payment of money, and not a promissory note, because of the addition of the words ‘and taxes,’ following the provision for interest, and preceding the name of the maker.

If the instrument sued on is a promissory note, we think the clear legal inference from the facts shown by the record is that it was delivered at Waterbury, Conn.; and the rule seems to be that, in an action upon a negotiable instrument, the law of the place where the same is delivered and negotiated is to control in determining the liability, if any, thereon. Gay v. Rainey, 89 Ill. 221, 31 Am. Rep. 76. And the place where a contract is made depends, not upon the place where it is actually written, but on the place where it is delivered, as consummating a bargain. 1 Daniel on Neg. Inst. 660. Under the statute of Connecticut, as introduced in evidence, if the instrument in question can be held to be a promissory note, the relationbetween appellant and appellee to the same was that of indorsers, and not of guarantors (Spencer v. Allerton, 60 Conn. 410, 22 Atl. 778,13 L. R. A. 806), as the statute declares that, whether the indorsement be before or after the indorsement by the payee, it shall import the contract of an ordinary indorsement. If the instrument is not a promissory note, then it is clear that appellee bore no such relation to it as would render him liable under the proof disclosed in this record.

Upon a mere contract for the payment of money or the performance of any other covenant, where the instrument is not such as comes within the definition of a negotiable instrument, one by merely signing his name upon the back thereof does not become either a guarantor or an indorser, within the law merchant. There are many instruments that may be transferred by assignment of the holder or payee, and which are sometimes called ‘negotiable instruments,’ such as bills of lading, warehouse receipts, and other assignable contracts, for the performance of the terms or covenants of which one may become a guarantor; but the contract of guaranty on such instrument will not arise by the mere signing of the name of a person, not a party thereto, on the back thereof. We take it the only possible relation between the parties here, under the law, if it could be held that the instrument in question is a negotiable instrument, would be that of indorsers; and the relation of indorsers, which appellee and appellant must have borne to the instrument in question, is, in a technical sense, applicable only to a relation touching negotiable paper. While to write one's name on the back of a writing is literally to indorse it, in its technical sense, and in the sense in which it is used when applied to negotiable paper, it means writing one's name thereon with intent to incur the liability of a party who warrants payment of the instrument, provided it is duly presented to the principal at maturity, and is not paid by him, and such fact is duly notified to the indorser. 1 Daniel on Neg. Inst. 667. Such was the rule of the law merchant, which has been modified to some extent in this state, where such instruments are controlled by the laws of this state, by requiring that suit be timely brought, or that it be shown that suit would be unavailing.

A promissory note, as defined by the English bills of exchange act (section 83), is ‘an unconditional promise in writing made by one person to another, signed by the maker, engaging to pay on demand, or at a fixed or determinable future time, a certain sum in money to, or to the order of, a...