State v. Foley

• Decision Date: 21 February 1898
• Citation: 39 A. 650,61 N.J.L. 428
• Parties: STATE (EMERALD & PHENIX BREWING CO., Prosecutor), v. FOLEY.
• Court: New Jersey Supreme Court

39 A. 650

61 N.J.L. 428

STATE (EMERALD & PHENIX BREWING CO., Prosecutor),

v. FOLEY.

Supreme Court of New Jersey.

Feb. 21, 1898.

(Syllabus by the Court.)

Certiorari to court of common pleas, Essex county; Fort, Judge.

Suit by the Emerald & Phenix Brewing Company against Patrick Foley as an indorser on a note. Plaintiff had judgment, and defendant brings certiorari. Reversed.

Argued November term, 1897, before VAN SYCKEL, COLLINS, and DIXON, JJ.

William C. Nicoll, for prosecutor.

Thomas J. Lintott, for defendant.

DIXON, J. The transaction shown by the testimony in the court of common pleas was as follows: The plaintiff's agent, Foley, the defendant, and one Kelly, orally agreed together, on September 4, 1895, that the plaintiff should lend Kelly $250, for which Kelly should give the plaintiff his note, payable at a bank in Newark, "on demand after date," to the order of Foley, indorsed by Foley as surety, and that Kelly should pay $5 a week until the note was satisfied; that thereupon the note was so drawn, signed by Kelly, and indorsed in blank by Foley, and delivered to the agent, and then the plaintiff paid Kelly the $250; that Kelly afterwards paid weekly installments of $5 each until $180 were paid, and then ceased; that on June 10, 1896, the plaintiff demanded payment of the note at the bank, and, payment being refused, gave immediate notice thereof to Foley, the indorser. On these proofs the common pleas decided that the indorser was responsible for the balance of the note. The indorser contends that such decision is erroneous.

It seems proper, in dealing with this controversy, first to consider the effect of the writing, irrespective of the oral agreement. At the time when the defendant placed his name upon the back of the instrument, and it was delivered to the plaintiff, the writing had no legal validity; and hence it was not a negotiable promissory note owned by the payee, and by him transferred by indorsement to a third party. Its legal validity came into existence only when, on the strength of it, the plaintiff advanced the $250 to Kelly. The signature of the defendant, therefore, lacked this ingredient of a strict indorsement under the law merchant. Nevertheless it seems that the defendant must be regarded as a commercial indorser. Smith v. Becket, 13 Bast, 187; Field v. Nickerson, 13 Mass. 131; Merritt v. Todd, 23 N. Y. 28; Jones v. Bank (Pa. Sup.) 13 Atl. 84; Perry v. Green, 19 N. J. Law, 61; Johnson v. Ramsey, 43 N. J. Law, 279. Consequently his obligation to pay, as evidenced by his indorsement, was conditioned upon due demand for payment being first made in accordance with the terms of the note. The note was payable "on demand after date." In Hitchings v. Edmands, 132 Mass. 338, this expression was deemed equivalent to "on demand"; but in Crim v. Starkweather, 88 N. Y. 340, a distinction was noted, the words "on demand" rendering the note immediately due, while the words "on demand after date" required that some time should elapse before demand could be made, and therefore before the note became due. The New York case comports more exactly with the terms used, but plainly a demand forthwith after the day of the date would be in accordance with the contract.

The question, therefore, on this note, is, when, after its date should the holder make demand of payment, and give notice of default to the indorser, in order to make his obligation to pay...