State Bank & Trust Co. of Los Angeles v. Evans

Hammond, J. Upon this report only two questions are raised, of which the first is one of evidence and the second one of agency. 1. As to the question of evidence. For reasons hereinafter stated we are of opinion that the form of the note of the Columbia Mining and Milling Company and of the indorsement on the back thereof were admissible. The note and indorsement were a part of the circumstances affecting the situation at the time the telegrams were sent to Allen, and may properly be taken into consideration in interpreting them. The note had been paid and the chances were that it had been destroyed, but, even if it were in existence, the power of the plaintiff to produce it was not shown; and since it was beyond the jurisdiction of the court there was no power in the court to cause its production. Under the circumstances disclosed in this case the trial judge was justified in finding that the plaintiff had made reasonable efforts to procure the original, and, having so found, in receiving secondary evidence of its contents. Binney v. Russell, 109 Mass. 55. Williamson v. Cambridge Railroad, 144 Mass. 148. L'Herbette v. Pittsfield National Bank, 162 Mass. 137, at p. 141. 2. As to the question of agency. Upon this question there was evidence tending to show the following facts: “ That prior to the giving of the note in suit, a promissory note for two thousand three hundred and two dollars and fifty cents ($2,302.50) was made and dated Los Angeles, California, May 2nd, 1902, payable four months after date to the State Bank & Trust Company of Los Angeles or order by the Columbia Mining & Milling Company, hereinafter called Columbia Company, and personally endorsed on the back thereof at said Los Angeles by H. P. Hunt, R. J. Dyas, W. A. Boeck, and by these defendants James D. Evans and Homer F. Hunt: That immediately under said indorsements were the following words, impressed by a rubber stamp: ‘I hereby guarantee the payment of the within [16] note, waiving demand, presentment for payment, protest and notice of protest,’ and below this stamped impression, the same parties personally indorsed their names again: That the note was then delivered to the plaintiff and a legal consideration therefor given: That the defendants were stockholders of said. Columbia Company and financially interested in the scheme in which said money was used: That this Columbia Company note became due September 2nd, 1902: That in the meantime, the Macedonia Mining & Milling Company, hereinafter called the Macedonia Company, had taken over the assets of the Columbia Company, and the stockholders of the Columbia Company including these defendants, had given up their stock to the Macedonia Company and taken therefor stock of the latter Company on the basis of 7½ shares of the Macedonia Company stock for one share of the Columbia Company stock. . . . That shortly before September 2nd, 1902, the President of the Macedonia Company, who was the said indorser R. J. Dyas, wished to renew the Columbia Company note: That as a result of communications received by the defendants while in the East, from said Carroll Allen, who shortly before had represented the defendants in some litigation in Los Angeles and who was one of the attorneys of the plaintiff bank, but who was at this time acting as Treasurer of the Macedonia Company to represent the defendants’ interest therein, the defendant Homer F. Hunt and one H. P. Hunt, his brother, on whom no service was obtained in this case, on August 80th, 1902, and the defendant Evans on September 2nd, 1902, telegraphed to said Allen authority to endorse in their names the note here sued on.” The evidence tended further to show that these telegrams were received by Allen on September 2, and on the same day were shown by him to the plaintiff’s cashier. Allen then indorsed the names of the defendants on the back of the note here in suit. At the request of the cashier, who objected to the note on the ground that there should be a guarantee and waiver of demand similar to that on the Columbia Company note, Allen then affixed, by means of a rubber stamp, at the upper right-side of the back of the note, the words: “I hereby guarantee the payment of the within note, waiving demand, presentment for payment, protest and notice of protest,” intending such waiver [17] to be in behalf of each of these defendants. That Allen intended to bind the defendants by this writing and that they were bound if he had such authority, there can be no doubt. Was he authorized to do it? The trial judge might properly have regarded the second note as in substance a renewal of the first. The first note was coming due and the defendants were liable upon it without demand, notice, protest or waiver of protest; and the judge properly may have found that at the time of the telegrams it was neither the expectation nor the purpose of the defendants that it should be paid when due, and that they desired simply an extension of time by the way of a renewal, and not a change in their liability to the payee. The judge might have found further that the defendants supposed that the second note was to be made in the same general form as the first, namely, that it should be made directly to the plaintiff and that all the names should be placed on the note before its delivery to the payee, or in other words, that their names were not to go on as indorsers in the strict sense of the term. Interpreting the brief telegrams in the light of these findings and other circumstances set forth upon the record, we are of opinion that they justify the conclusion that the word “ indorse ” is not therein used in its strictly technical sense, but is to be interpreted as authorizing the placing of the names on the back of the note before its delivery in the same way in which they stood upon the note which was to be renewed and with the same legal effect, and consequently that the defendants are bound as though they personally had done what Allen did for them. It follows that the finding for the plaintiff must stand. It becomes unnecessary to inquire into the soundness of another ground upon which the plaintiff contends that the defendants were liable, namely, that by the common law of this State (presumably the same in California), as it existed until changed by St. 1874, c. 404, the defendants having allowed their names to go on this note before its delivery to the payee were liable as joint promisors, and so were not entitled in any event to demand or notice. See Cherry v. Sprague, 187 Mass. 113, and cases there cited. Judgment on the finding.