Clarke v. Stumpf

Putnam, J.: Although the first note had been renewed, and defendant Stumpf had written to plaintiff to wire and have the note recalled, it appears that in the channels of bank collection it reached Milwaukee, but was not properly presented, the demand being by telephone only. This, however, did not affect the defendants’ liability, since acceptance of such a renewal note is a waiver of any further step to hold the indorsers of the original note. (Leffingwell v. White, 1 Johns. Cas. 99; Leonard v. Gary, 10 Wend. 504; Sheldon v. Horton, 53 Barb. 23; affd., 43 N. Y. 93; Cady v. Bradshaw, 116 id. 188; National Hudson River Bank v. Reynolds, 57 Hun, 307, 309.) Inasmuch as the fact that this second note was taken in renewal was not only set up in the complaint, but admitted in [541] the answer, no point of pleading arises. This waiver was not a matter of excuse by special circumstances, but was by the indorsers’ formal act that extended the debt so that thereafter presentment and protest of a note thus superseded would be not only vain, but improper. Indeed, it is to avoid just such apparent dishonor of the original paper that renewal notes are given. (Leary v. Miller, 61 N. Y. 488, 491.) We are agreed that in this form of action, these appellants are indorsers, and cannot be found to be primarily liable. The notes were for the debt of a corporation; and though appellants may have expected to pay them, that was not enough to make them primarily liable. We are also in accord that the renewal note did not discharge the first note, but became only a means of payment. We differ as to the effect of non-presentment of the second note upon the defendants’ liability as indorsers of the first note. Whether such defendants were injured by the failure to present and demand payment of the renewal note is a question of fact, namely, whether if such note had been so presented, the maker, the Social Centres Corporation, would have paid it, and so relieved the indorsers. In the absence of evidence, the legal presumption is that it would have been so paid. (Hayward v. Empire State Sugar Co., 105 App. Div. 21, 23.) The plaintiff here, however, undertook to show by inquiry of the defendant Stumpf that at the date of maturity the Social Centres Corporation had no money in the German-American Bank of Milwaukee, where this note was payable, but this was excluded. This obviously requires a new trial. It may be urged that these requests and promises were on the part of Stumpf alone, without concurrent action of defendant Langhoff, whose partnership with Stumpf apparently was only in the clothing trade. This might raise a question for the jury on the new trial. I advise, therefore, to affirm the order setting aside the verdict and for a new trial. As these are cross-appeals, such affirmance is without costs. Mills and Rich, JJ., concur; Blackmar, J., reads to modify the order by dismissing the complaint, with whom Jenks, P. J., concurs.