Eichholtz v. Taylor

Morris, C. — The appellant, who was the plaintiff below, sued the appellees upon the following promissory note: " $500.00. Lafayette, Ind., March'9th, 1878. “Due, 25th day of December, 1879, after date, we promise to pay to the order of Emanuel Eichholtz, the sum of $500, with interest at the rate of eight per cent, per annum after maturity, until paid, and attorneys’ fees, negotiable and payable at the office of- bankers, value received, without any — 39 — relief whatever from valuation or appraisement laws. The ■drawers and endorsers severally waive presentment for payment, protest, notice of protest and non-payment of this note. “ Edward Taylor. “ Henry Martin. “ George W. Taylor. “ Henry C. Taylor.” The defendants, except George ~W. Taylor, appeared and answered the complaint. Edward Taylor answered in one paragraph, admitting the execution of the note sued on, but alleging that said note, with others, was executed to the plaintiff by him and his co-defendants, except Henry C. Taylor, as principals, and by the said Henry C. Taylor as surety, in payment for a threshing machine and separator; that after-wards, on the 26th day of August, 1878, the plaintiff entered into an agreement with this defendant whereby he agreed and promised this defendant that if he would sell and transfer his interest in said machine and separator to one George G. Ogden, for the price of $500, and take the note of said Ogden for $500, ■to become due on the 23d day of December, 1879, with interest at the rate of eight per cent, per annum, with one J. T. Ramey as surety thereon for the payment of said note, that when said note should be executed in manner and form aforesaid, he, plaintiff, would accept said note of the said George G. Ogden and J. T. Ramey, in full settlement of all claims and demands the plaintiff held against this defendant by reason of the note sued on, and all notes executed by this defendant and his co-defendants in payment of said machine and separator; that, by reason of the plaintiff’s promise and agreement as herein set out, and in consideration of the agreement of the plaintiff that this defendant should be released from all further liability on account of the note sued on, this defendant bargained and agreed to sell, and did actually sell and convey, all his interest in said machine and separator to the said George G. Ogden, and, in compliance with the agreement made with the plaintiff as herein set out, accepted and — 40 — took from the said George G. Ogden his promissory note for the sum of $500, to become due the 23d day of December, 1879, with interest at the rate of eight per cent, per annum, and with the said J. T. Ramey as surety on the same, a copy of which is filed as a part of said answer; that said note so taken was in all respects in conformity with the agreement and instructions of the plaintiff as made with and given to the defendant; that after said defendant had sold said machine and separator and taken said note he tendered said note to the plaintiff, in fulfilment of his agreement aforesaid, but said plaintiff refused to accept said note and release him as he had agreed to do; that he, the defendant, has ever been ready and is now ready and willing to comply with his portion of the contract, and turn over and deliver to plaintiff the note of said Ogden, and now brings the same into court for plaintiff. Wherefore, etc. The copy of the note referred to in the answer is as follows “$500.00. Lafayette, Istd., Aug. 26th, 1878. “On December 23d, 1879, after date, we promise to pay to-the order of Edward Taylor, at the Lafayette National Bank, of Lafayette, Ind., $500.00, with interest at the rate of eight per cent, per annum, and five per cent, attorneys’ fees, value received, without any relief from valuation or appraisement laws. The drawers and endorsers severally waive presentment for payment, protest and notice of protest, and non-payment of this note. Geo. G. Ogden. - “ J. T. Ramey.” The appellee Martin answered in' two paragraphs. The first alleged that he executed the note as security of the other makers, and asked that'their property might be first exhausted to satisfy any judgment that might be obtained on the note sued on. The second paragraph was, substantially, the same as the answer of Edward Taylor. Henry C. Taylor also answered in two paragraphs. His answer was the same as that of the defendant Martin, except — 41 — that in the second paragraph he averred that he signed said note as the surety of. his co-makers. The appellant demurred to the answer of Edward Taylor and to the second paragraph of the answer of Martin and to the second paragraph of Henry C. Taylor’s answer. The demurrers were overruled. He then replied to said answers. The cause was dismissed as to G. W. Taylor and was submitted to the court for trial. • The court found in favor of the appellant as against Edward Taylor, and in favor of the appellees Henry Martin and Henry C. Taylor. The appellant moved for a new trial on the grounds that the finding of the court was contrary to law and not supported by sufficient evidence. The motion was overruled and judgment rendered in accordance with the finding of the court. The rulings of the court upon the demurrers to the answers and upon the motion for a new trial are assigned as errors. The appellant insists that the court erred in overruling his demurrers, for the reason that, by the contract set forth in the several paragraphs of the answers demurred to, Edward Taylor neither promised nor was he bound to dispose of his interest in said threshing machine and separator, or to procure and transfer to him the said note of the said Ogden aud Ramey. This may be, but the alleged agreement of the appellant may be regarded as a conditional promise that if Taylor would dispose of his interest in the machine and separator, and procure therefor the note of Ogden and Ramey and transfer it to him he-would release said Taylor from his liability on the note in suit; and if, as alleged in the several paragraphs of the answer, Taylor, acting upon this conditional promise, did dispose of said machine and separator, and procure therefor the note of Ogden and Ramey, as proposed, and tendered the same to the appellant as stated, he performed the agreement on his part, and the appellant became bound, and the law would compel him, to accept the note so tendered in discharge of Taylor’s liability on the note in suit. This objection to the answers is not well taken. — 42 — The appellant also insists that the answers are bad because they show that the note of Ogden and Ramey was payable to 'Taylor, and do not show that Taylor ever endorsed the same to the appellant; that, as a valid tender of the note to the appellant, unless endorsed to him by the payee, could not be made, the averment that it had been so endorsed is essential. The answer alleges that on the'26th day of August, 1878, said Taylor tendered said note to the appellant; that he has ever since been ready and willing to turn over the same to him, and that he now brings it into court for him. If Taylor did tender the note as alleged, then he did everything on his part ■necessary to be done, so that the acceptance of the note by the appellant would vest in him the title to it. If, to do this, it was necessary for Taylor to endorse the note, the averment .that he had tendered it to the appellant is equivalent to an allegation that he had endorsed it. If the averment was too general, it might have been made more specific by a proper motion. We think the demurrers to the several paragraphs •of the answers were properly overruled. The appellant also contends that the court erred in overruling his motion for a new trial, for the reason that the evidence is not sufficient to sustain the finding of the court. In this we think the appellant is right. The evidence, which is properly in the record, does not show, ■nor tend to show, that the note was ever endorsed by Taylor to the appellant. By the agreement stated in the answers, ■which a portion of the testimony tended to sustain, the appellant was entitled to the legal ownership of the note. He ■did not agree to release Taylor for a mere equitable title to the note. The delivery of the note of Ogden and Ramey to the appellant would pass to the latter the equitable but not •the legal title to the note. Being the equitable owner of the note, the appellant could sue upon it in his own name, but he would have to make the payee of the note a party defendant to answer as to his interest in the note. Prior to the adoption of the code he could not sue at law in his own name upon — 43 — ■such a title, but as the equitable assignee he had a right to sue at law in the name of his equitable assignor, and in equity he could always sue on such an assignment in his own name, making, as under the code, the assignor a party defendant. The code has not done away with nor abolished the distinction between the legal and equitable title to promissory notes; it simply enables the equitable owner to .sue in his own name, adopting the remedy formerly given in equity. As the appellant, by the agreement, had a right to the legal title of the note of Ogden and Ramey, it follows that to defeat the action it was necessary for the appellees to prove that the legal title to the note had been tendered to him, so that by the judgment of the court against him he would become invested with the legal title to the note. No such tender was proved, nor was there any testimony in the case tending to prove it. There yet remained something to be done to transfer to the appellant the title to said note; before the property in the note ■could legally pass to the appellant, it must be endoi’sed to him by Edward Taylor. This has not been done, and the legal title to the note remains in Edward Taylor. As, by the tender alone of the legal title to the note to the appellant, Edward Taylor could be discharged from his liability on the note in suit, this not having been done, he remains liable upon it the same as if the alleged agreement to accept the note of Ogden and Ramey had never been made, and the appellee Martin, his co-maker, and Henry C. Taylor his surety, are still liable. In speaking upon this subject this court, in the case of Streeter v. Henley, 1 Ind. 401, says: “ Supposing that the suit would have been barred by a proper tender and a refusal of the property, as to which we give no opinion, it is evident that the tender, to produce that effect, should have been of all the property contracted for. Here, the notes offered were not endorsed, nor offered to be endorsed, by the defendant; nor were they shown tobe transferable without endorsement. The notes, therefore, were not legally tendered, and the pleas of tender were not proved.” — 44 — This language applies precisely to the case now before us. The game question was again decided in the case of Henley v. Streeter, 5 Ind. 207. See, also, Barney v. Bliss, 1 Chipman, 399 (12 Am. Dec. 696); Holmes v. Holmes, 12 Barb. 137; Jones v. Knowles, 30 Maine, 402; Dunham v. Pettee, 4 E. D. Smith, 500. The legal title to the note would be necessary to enable the appellant to sell and negotiate the same. We think the court erred in overruling the motion for a new trial. Wade v. Guppinger, 60 Ind. 376. Per Curiam. — It is ordered, upon the foregoing opinion, that the judgment below be reversed as to Henry C. Taylor and Henry Martin, at their cdsts, with instructions to render judgment upon the finding in favor of the appellant for the amount due upon the note sued upon.