Milliken v. Davis

Wait, J. This action was begun by an indorsee of a promissory note against his indorser who was also the payee; and is now prosecuted by his executor. The note was dated April 4, 1924, and promised payment of $1,100 on demand “with payments of Fifty Dollars ($50) on interest days, with interest Monthly at the rate of nine per centum per annum for such time as the principal sum or any part thereof shall remain unpaid” to Sarah Davis or order. On July.28, 1924, Sarah Davis indorsed it to the order of Shaw, the testator. At that time $1,100 was due. No payments of the monthly $50 had been made. The rate of interest was reduced to eight per cent. No payment either of interest or principal was thereafter made. May 5, 1925, demand was made on the makers for payment of principal and interest, and a new notice of nonpayment was given Sarah Davis as indorser. She waived demand and notice for payment on May 5, but did not waive any presentment or notice which might have been required at any time before May 5. The note was secured by a mortgage of real estate, which was assigned to Shaw when the note was indorsed, and which was foreclosed on June 8, 1925. It was admitted that “it is customary for demand mortgage notes, so long as there is no default, to run for an indefinite time without a demand being made for the payment of the principal.” The defendant contended that she was discharged from liability by failure to make a presentment and to give notice. The judge so ruled, found for the defendant, and reported the case. If demand and notice were given within a reasonable time, the findings are to be set aside and judgment in proper amount to be entered for the plaintiff; if not, judgment is to be entered on the findings. . The fact that this note was secured by a mortgage does not affect the rules of law applicable to it as a demand note. Hale v. Rider, 5 Cush. 231. Ely v. Ely, 6 Gray, 439. Colt [183] v. Barnard, 18 Pick. 260. See Strong v. Jackson, 123 Mass. 60. Murphy v. Barnard, 162 Mass. 72, 79. To render an indorser-of such a note liable, demand within a reasonable time and notice of nonpayment are essential, unless they have been waived. G. L. c. 107, § 94. The custom proved does not affect this note; because there had been default, and failure to notify for an indefinite time is unimportant only where there has been no default. This note provides for payments of $50 on each interest day. It imports an obligation on the maker to make the payment. Beaman v. Gerrish, 235 Mass. 79. On failure to pay the $50 the note was dishonored. Fitchburg Mutual Fire Ins. Co. v. Davis, 121 Mass. 121. Vinton v. King, 4 Allen, 562. Delay for nine months to give notice of this failure may well be found to be unreasonable. The case of National Bank of North America v. Kirby, 108 Mass. 497, relates to nonpayment of interest and is not authority controlling here. There was no error in the findings and the order will be Judgment for defendant.