Barr v. Mitchell

By tbe Court, Boise, J.: Tlie first material matter to be decided in coming to a proper understanding of this cause is to determine the nature of the written instrument on which this action is founded. It is contended by the appellant that the words in this instrument, “I reserve the right to use the said money one or two years longer if I see fit,” created as to Mitchell a contingent liability, and was not a part of the note, but was an addition thereto in the nature of a letter of credit. Our construction of this instrument is that it is a non-negotiable promissory note, due three years from date with tbe right in the maker to pay the same at the expiration of any time after one year from the date. This construction must dispose of all the numerous questions raised in the case, except one which is: What is the liability of a person, other than the payee who writes his name on the back of a non-negotiable note before the same is delivered to the payee? Is he a maker, a guarantor, or an indorser, and is he entitled to demand and notice of nonpayment in order to fix his liability ? In the case of Kamm v. Holland, 2 Or. 59, this court decided that one who writes his name on the back of a negotiable note before delivery is to be treated as an indorser and is entitled to demand and notice. In that case it was contended that Holland, who had written his name on the note before it was delivered, was a maker and not an indorser, and many respectable authorities were cited to support this position. In deciding the case the court say: <cWe might decide the question either way, and have an abundance of authority for so doing.” In that case the court followed the rule as established in the state of New York. But in that state a different rule is established as to the liability of one who thus puts his name on a non-negotiable note, and he is not entitled to demand and notice, but is held liable as a maker or guarantor. (Griswold et al. v. Slocum, 10 Barb. 402.) In Story on Promissory Notes, the general rule is laid [355] down that where one makes a blank indorsement on a nonnegotiable note at the time the note is made, such indorser is liable as an original promisor or maker of the note, and the payee is at liberty to write over the blank signature the words: “For value received I promise to pay the money within named ” to B., the payee. This would in effect make him liable as maker. This is also the rule as stated in Parsons on Notes and Bills, vol. 2, p. 125, where the author says: “In those states where the rule is adopted that a ‘ third person ’ indorsing paper in blank before delivery of it to the payee, is liable as an indorser only. It is not applied in case the paper be not negotiable, inasmuch as a legal indorsement can only be made on negotiable paper; but an indorser in such case is held liable as a maker or grantor,” and in such a case is not entitled to demand and notice. We think the rule is, as established by the authorities, that when a person writes his name in blank on the back of a non-negotiable note, before the same is delivered to the payee he is liable as a maker. There was no error in the trial of this cause in the circuit court, and the judgment will be affirmed with costs.