Hart v. Eastman

By the Court FlaNdbau, J. The character of the notes sued upon in this action, was decided in the appeal taken by the [Regents of the University, from the order denying them a new trial. They are, by reason of the provisions contained in the charter of the University, not negotiable notes in a commercial sense. They are, by necessity, drawn upon a certain fund which is provided by the Legislature to the Regents, and to which fund their expenditures are strictly confined. Regents of University vs. Hart & Munson, ante p. — The notes were dated on the 24th day of February, 1859, payable to the order of Alden, Cutter & Hull, in three and four months. The payees, before the maturity of the notes, endorsed them, waiving demand and protest, &c. On the 30th day of June, 1859, after the notes had become due, the Defendants, Eastman & Gibson, endorsed them as follows : “ Eastman & Gibson, but not to be paid by us in any event within one year from date. June 30th, 1859.” The meaning of this qualifying clause in the endorsement of Eastman & Gibson, is this. That they were not to pay the notes within a year from June 30th, 1859, whether their liability became fixed by failure of the makers or not, prior to that time. It waives nothing on their part; it confers no advantage upon their endorsees, but, on the contrary, stipulates for a decided benefit to themselves in the postponement of the payment for a year certain, when without such stipulation they might have been sued at once, after demand and refusal on the part of the makers. Having considered the nature of the instrument endorsed, and the character of the endorsement, let us examine the relative liabilities and obligations that were created between the endorser and his indorsee. The notes were non-negotiable and past due when endorsed, and the endorsement is the [79] same in effect as if the names of the endorsers had been simply written on the back of the note. In the case of Helfer vs. Alder, Cutter & Hull, 3 Minn., R. 332, we examined the question of the liability of an endorser of non-negotiable paper, and concluded that as between himself and his immediate endorsee, the endorsement operated in legal contemplation, as the drawing of a bill of exchange. That it was the request of the endorser that the maker (who stands in this respect very much in the situation of an acceptor) would pay the amount 'to the endorsee. That it might be treated with strict propriety as an authority given to the endorsee to receive the money due on the note, and also as an undertaking that it shall be' paid to him upon due presentment, and therefore as involving, in case of dishonor and due notice thereof, the ordinary responsibility of an endorser of negotiable paper. One of the distinctions between the endorsement of a negotiable and a non-negotiable note, is this. That the contract in case of the former extends through all subsequent endorsements to the holder, who may sue upon it all who precede him ; while in the case of non-negotiable paper, the privity of contract is confined to the endorsee and his immediate endorser, unless there are words used in the endorsement that would extend it to subsequent hands. In this case, Eastman & Gibson are the immediate endorsers of the Plaintiffs. Story on Promissory Notes, See. 129. The Defendants were entitled to notice of non-payment by the makers, and the note being over due when endorsed, we have to determine at what time it should have been presented for payment. The rule is that it must be presented within a reasonable time, and, that what is a reasonable time, is a mixed question of law and fact to be submitted to a -jury under the instructions of the court. Byles on Bills, 165. This rule is of course based upon the fact that the evidence introduced on the subject, leaves a doubt for the jury to solve by their verdict; for if the evidence established a state of facts that left no doubt upon the subject, the Court would instruct the jury to. find one way or the other. Eor instance, suppose great delay had been suffered in the presentment of a note, and the evidence offered in excuse was, that the holder knew [80] the maker to be insolvent, and that the note would not be paid. This, if uncontradicted and admitted to be true, would form no excuse whatever for the non-presentment of the note, for, as the books say, notwithstanding the insolvency the note might have been paid by the maker, or some friend for him. Story on Promissory Notes, 286th Section. In a case such as the one supposed, the instructions of the Court would be that the evidence formed no excuse for the delay. Where nothing appears in a case except the period of time which has been allowed to elapse, the Court should instruct the jury how to find. It is said by Mr. Story that “ equivocal acts or conduct or language on the part of the indorser not intentionally or fraudulently designed to mislead, or knowledge on his part, that the note, if presented to the maker will not be paid at the maturity of the note, will not constitute any excuse for the want of due presentment thereof. The reason of the former part of the rule is, that equivocal acts, or conduct, or language may not be intended by the endorser to dispense with the ordinary requirements of law as -to presentment. The reason of the latter is, that knowledge that the note will not be paid, is not the same as notice that it has not been paid; and that due presentment being a part of the implied obligations of the holder to entitle him to charge the indorser, the latter has a right to insist upon a strict fulfillment thereof, and it is no proof that he dispenses with it merely to say that it would be unavailing.” Story on Promissory Notes, Seo. 287. Now, what was the proof upon which the Plaintiffs seek to relieve themselves for having delayed presentment and notice for more than a year? Nothing more than a few statements in some letters written by the Defendants, Eastman & Gibson, to the Plaintiffs, to the effect that the University had no funds. If they had told the Plaintiffs directly that the notes would not be paid, we have shown that it would have afforded no-excuse for not presenting them for payment at the proper time. The true reason undoubtedly was, that the plaintiffs were misled by the terms of the indorsement, and supposed that they were not obliged to demand payment of the makers until the expiration of a year from the date of the indorse [81] ment. This, however, we have shown was not the case. Note. — Justice Atwater having acted as Secretary of tho University in the execution of the notes in suit? took no part in the decision, The Court submitted the case to the jury under instructions that as a mere question of time, the delay was unreasonable, but that where the fact is in issue what a reasonable time is, it becomes a question for the jury to determine under the instructions of the Court upon all the facts and circumstances of the case, as they appear in evidence. The jury having found that the delay was not unreasonable, must have based their finding upon the testimony contained in the letters, the Court having instructed them that the time alone, independent of such testimony, was unreasonable. . The finding, therefore, as we have shown, is not supported by the evidence, because, admitting it all to be true, and much less equivocal than it was, it makes out no excuse. The Court corrected this error" on the motion for a new trial. There is one other question made by the Defendants, Eastman & Gibson, which we will notice. It was made once before, in the case of Tyson & Co., vs. Kane & Co., 3 Minn. R., 387. We considered it at that time, but it did not become necessary to decide it. It is whether a party can be examined as a witness by commission, in his own behalf? The statute (Comp. Stats. 681, pp. 50, 51, 52,) declares who may and who may not be witnesses, and places a party on the same footing, exactly, as any other witness, and the same statute provides (Sec. 8, p. 675, and Sec. 25 p. 677-8) for taking depositions, without making any distinction between witnesses. Some reasons may be urged why a party should be always in court to prosecute or defend his cause, but there are many, on the ground of convenience and expense, why he should not be compelled to in all cases. The statute not making any difference between witnesses, we do not feel justified in creating one. The order allowing the commission will be presumed to have been regularly made. The order granting a new trial is affirmed.