Rhodes v. Seymour

Butler, J. None of.the counts of this declaration set forth such a contract as the law implies from such a blank endorsement. The contract so implied- contains three elements, viz : 1st, that the note is due ; 2d, that the maker shall be of ability to pay it when it reaches maturity; and 3d, that it shall then be collectible by due diligence. The contract set forth in the declaration is variant, because it is not alleged in any of the counts that the endorser warranted that the note should be collectible by the use of due diligence. While therefore the contract implied by law is conditional in requiring due diligence from the holder, which this court have said imports not only a demand, but an attempt to collect by. legal process, (unless excused by the insolvency of the makers,) the contract set up in the declaration is substantially absolute omitting entirely the third and conditional element of diligence, and importing that the note should be paid by the makers when due and demanded. [6] It is true that by the rules of the law applicable to instruments and endorsements of this nature, the plaintiff might have written over the name of the defendant or given in evidence and recovered upon, just such a special contract as is set out in the declaration, if such a contract had been in fact and expressly made between the parties. But it is not found or claimed that any such special contract was made, and it is obvious that the plaintiff cannot recover under this declaration on the contract implied by the law. Inasmuch however as this is a reserved case, and must go back in any event, and the plaintiff will have an opportunity to amend his declaration, and the other questions involved have been reserved and argued, we deem it our duty to express an opinion upon them. The note in question, although on demand and negotiable, is also expressed to be “ with interest.” From this and the other facts found, it sufficiently appears that an immediate demand was not contemplated, and that the note was intended to lie as a continuing security. The plaintiff therefore would not have been bound to make any demand upon the makers, or use any diligence for the collection of the note prior ■ to their insolvency, (unless required to do so by the endorser or his representative,) but for the statute of 1865. That statute enacts that “ any negotiable promissory note executed subsequent to the 1st day of October, 1865, and payable on demand, which remains unpaid four months from its date, shall be considered overdue and dishonored after that time, ” and if it has any application to this description of demand notes, or is to have any effect upon them, it requires the holders of them to make demand, and exercise the diligence required by law, at the end of four months from the date of the note. The language is broad and imperative, and whatever we may think of the policy of the law, we are not at liberty to doubt the intention of the Legislature to apply its provisions to such notes and endorsements. No days of grace can be allowed ; and although parties are still at liberty to make contracts of this character, they cannot be treated as continuing securities, or the reasonable time for demand which they in [7] volve be extended, without further agreement or some waiver, beyond the time fixed by the statute. It was the duty therefore of the plaintiff in this case to make demand of the makers at the end of four months, without grace, and upon non-payment to secure the debt by attachment. That duty he did not perform, and we are brought to the question whether there was any further agreement or waiver, which excused him from the exercise of that diligence which the law requires in such cases. 1 When the note became due by force of the statute, the endorser was dead, and the defendant, one of the makers, was his executor. A demand was made of the makers of the note just before its maturity, but no diligence was attempted against them afterward, nor was such diligence excused by their insolvency, or any agreement or waiver by the endorser when in life. The case then turns upon the question whether there was a waiver by the executor, and if so, whether it was competent for him to make it. That there was such waiver in fact cannot be doubted. The plaintiff called upon the executor, (the defendant,) and asked him about the payment of the note, and who the commissioners were upon the estate of the endorser. The defendant replied that “ there were no commissioners on the estate, that he was the executor and understood all about the note, and that it would be paid when the estate was settled.” There can be no question that this would have been a sufficient waiver of demand and notice in respect to a note on time ; and of diligence respecting this, if made by the endorser when in life. It imported a promise and was tantamount to saying, “ rest easy, the estate is in the process of settlement, and at the proper time I will pay the note from the funds of the estate.” But could the executor make it so as to bind himself or the estate ? If so, the plaintiff upon an amended declaration will be entitled to recover, if not, the defendant can never be subjected as executor. It is well settled by authoritative decisions .in this state and elsewhere, that executors are agents or trustees only, whose duty it is to administer according to the will of the [8] testator and according to law, and not to subject the estate by their admissions.” Pease v. Phelps, 10 Conn., 68, and cases cited. If it appeared that the loan was made equitably to the endorser, and he was the principal debtor, and the makers were sureties, the executor might waive. But the endorser here, for aught that appears, was a mere surety, and it was not only the duty of the plaintiff, but the imperative duty of the executor, to see that due diligence was used to collect the note of the makers and exempt the estate of the endorser. To that end it was his duty to require of the plaintiff the exercise of due diligence when the note matured. When therefore the executor attempted to subject the estate by the admission or waiver set forth, without requiring that diligence, he neglected his duty and exceeded his power, and although the plaintiff may not in fact have known all this, and probably did not, yet he must be presumed to have known it, and that if he relied on the waiver he did it at his peril. The law will not lend its aid to enforce such a contract under such circumstances. As therefore there was a want of due diligence in this case, and the waiver relied upon was unlawful and therefore inoperative, the executor cannot bo subjected in the action. - It has been claimed that the case should be treated as exceptional, because the executor is sole devisee of the estate, except as to part of the land given to the widow for life. But it cannot be so treated for two reasons; first,. because the neglect to require due diligence was a breach of duty, and the waiver unlawful and utterly inoperative ; and second, because, although it appears that no commissioners had been appointed at the time the waiver was made, it is not found and does not appear that the estate was solvent, and that no creditor or other person would be injured if the plaintiff should recover and the estate be subjected, and those facts cannot be presumed. We should have no difficulty with the objection of the defendant, that no legal consideration for the promise of the [9] endorser was averred because no request was alleged, if the case was otherwise with the plaintiff. It is true that where the consideration of a promise is laid as past and executed, it must be averred that the promise or act constituting the consideration was made or done at the request of the defendant. We so held in Usher v. Colchester, 33 Conn., 567. But the consideration in this case is not laid as a past or executed consideration. In one, if not in all the counts, it is laid as eotemporaneous. There are many cases where a request may be implied from the beneficial nature of the consideration, and the circumstances of the transaction; and then, if the beneficial nature or the circumstances are sufficiently alleged to authorize the implication of a request, the averment of a special request is unnecessary. Here it is alleged in the second count that the endorser, in consideration that the plaintiff then lent and advanced the money to the makers, endorsed the note, &c. This is a sufficient averment that the parties wore all together, and that the money was loaned by one, the note executed by another, and the endorsement made by the third, at the same time. It would be immaterial in such a case how or by whom a desire or request was expressed when the parties were all so present, for there must have been a desire that each act should be done, and that desire expressed and assented to, 'or the acts would not have been done. That in some form a request was made and assented to, and a mutual understanding had, and acted upon, at the time, must be therefore necessarily implied, and the case is within a recognized class of exceptions to the rule relied on. ' Livingston v. Rogers, 1 Caines Cas., 583. For these reasons -we are. of opinion that the action cannot be maintained, even under an amended declaration, and advise the Superior Court to render judgment for the defendant. In this opinion the other judges concurred.