Bank of Bishop & Co. v. Hawaii Soap Co.

[538] OPINION OP THE COURT BY PERRY, J. (Peters, C. J., dissenting.) This is an action of assumpsit upon a note for f>9000. The defendants are The Hawaii Soap Company, Limited, the maker, and K. Akira, an endorser. In obedience to the direction of the presiding judge, the jury rendered a verdict in favor of the plaintiff and against both defendants for the full amount of the principal of the note and for interest. The cause comes to this court upon exceptions. The note was signed as follows: “The Hawaii Soap Company, Limited, T. Ono, Treasurer.” A witness for the plaintiff testified to the genuineness of the signature of T. Ono; but it is contended in support of the exceptions that there was no evidence tending to show that T. Ono was the treasurer of The Hawaii Soap Company, Limited, or that, as treasurer, he had been authorized to sign the note. Evidence was unnecessary, of course, to show that The Hawaii Soap Company, Limited, was a corporation. The defendant filed an answer of general denial and did not plead any lack of corporate capacity on the part of this defendant or any lack of power to be sued. “The use of the word ‘limited’ naturally imports a corporation and renders further proof unnecessary.” Gonsalves & Company, Limited, v. Watson, 16 Haw. 256, 257. See also Hawaii Mill Company, Limited, v. Andrade, 14 Haw. 500. The note teller of the bank testified that the note sued on had been delivered to him by “the makers, — by Mr. Akira acting for The Hawaii Soap Company” and that at the time of the delivery of the note the |9000 therein referred to was by the plaintiff “deposited to the credit of The Hawaii Soap Company, Limited”; that the note was made and dated on June 10, 1921; and that on June 10, 1921, “there were other notes of the company” (the defendant corporation) “paid by check,causing an overdraft, and this note was taken to offset this overdraft.” There is evidence, in other words, to the effect that the defendant [539] corporation delivered to the plaintiff the promissory note in question as the note of the corporation and that upon the strength of the note the corporation was given and accepted the sum of $9000, being the loan mentioned in the note. This is a sufficient prima facie showing that T. Ono was in fact the treasurer of the corporation and that he was duly authorized by the corporation to sign as treasurer. No evidence was adduced by the corporation tending to show that it did not receive the loan or that T. Ono was unauthorized to sign the note. The defendant K. Akira offered at the trial to prove that after the delivery of the promissory note the plaintiff accepted two mortgages on certain property of the defendant corporation and that “one of the considerations for the execution of the mortgages Avas an extension of time for. the payment of the promissory note” by the corporation for one year and that this extension of time was without the consent of the endorsers and without any reservation by the plaintiff of its right of recourse against them; and also made a separate offer to prove that subsequent to the delivery of the note, “as a consideration for the execution of these mortgages the endorsers upon the promissory note * * * were released and discharged from all further or future liability.” Whether the two mortgages, which were marked as exhibits for identification and were made a part of the record now before us, of themselves constituted an extension of time by the payee in favor of the maker need not be now determined. It is sufficient to say that the offer as noted in the record was broader and was an offer to prove an express release and discharge of the endorsers as a consideration for the execution and delivery of the mortgages and also to prove an express agreement by the bank that the time for the payment of the note should be extended, and this without the consent of the endorsers. [540] The defendant K. Akira while on the witness-stand was asked by his attorney whether or not, when the two mortgages were delivered to the plaintiff, any such agreement of extension of time was made and was not permitted to answer the question. Under the Negotiable Instruments Act (R. L., Sec. 3570) an endorser is discharged “by any agreement binding upon the holder to extend the time of payment, or to postpone the holder’s right to enforce the instrument, unless made with the assent of the party secondarily liable, or unless, the right of recourse against such party is expressly reserved.” The defendant Akira was entitled to an opportunity to prove a release, either express or indirect, of himself as an endorser and therefore this evidence was erroneously excluded. W. H. Smith (also on the briefs) for plaintiff. F. Patterson (also on the briefs) for defendants. The remaining exceptions need not be considered. The verdict against the maker of the note will stand; as against the endorser the verdict is set aside and a new trial is granted.