National Bank v. Green

Day, Ch. J. [144] 1. Pleading: sufficiency of counts. [143] It is to be observed that the answer contains two distinct counts, alleging matters which are relied [144] upon by tbe defendant as distinct defenses to tbe claim of tbe petition. This is apparent from the form of the answer, the second count of which begins as follows: “ And for a further and second defense: ” the facts alleged in the first count are pleaded as a complete defense, and those in the second count as a partial defense, diminishing the amount of recovery from the sum named in the notes to the amount paid the indorser thereof. Each of these counts must, in itself, be sufficient for the purposes for which it is pleaded, and if not so sufficient it is vulnerable to a demurrer. “ Each affirmative matter of defense shall be stated in a distinct division of the answer, and must be sufficient in itself.” * * * * Revision, section 2882. “ When the facts stated in the answer, or any division thereof, are not sufficient to constitute a defense, set-off, counter-claim, or cross-demand, the adverse party may demur.” * * * Revision, section 2894. The demurrer raises specific objections to each of these counts in the answer. 2. Promissory statute. The petition alleges a guaranty, by the defendant, of the note sued on. It is urged that the facts alleged constitute no defense to the contract of guaranty; that statute of Illinois does not apply to a case 0f gUaranty. This position is well taken. It is not necessary for the plaintiff to institute legal proceedings against the maker or indorser of a promissory note, to show his insolvency, nor to prove demand and notice of non-payment, in order to establish the liability of a guarantor, but a defendant may discharge himself from liability by showing laches on the part of plaintiff in collecting his debt, and a resulting injury to the defendant. The onus probahdi rests upon defendant. Heaton v. Hulbut, 3 Scam. 489; Hance v. Miller, 21 Ill. 636. This view seems to be conceded by appellee, but he claims that the answer denies that the note was indorsed [145] by writing on tbe back thereof, in the words and figures set put in the petition; that the denial in the answer is as broad and comprehensive as the allegation in the petition, and that the pleadings are to be construed as if no allegation of indorsement, as set out in the petition, appeared therein. It is to be observed, however, that the first count of the answer contains no denial whatever of the indorsement. And, as'it must be sufficient of itself, it cannot be supplemented by the allegations in another count. An examination of the entire structure of the answer shows' clearly that the denial of the indorsement, in the words and figures set out in the petition, contained in the second count, was not intended to add to or aid in any way the averments of the first count. It is quite apparent-that the denial of the indorsement, as alleged, is intended only to show that the note was originally transferred to the National Bank of Michigan, and not to H. J. Perrin, in order to admit the defense that the note was purchased by plaintiff at a discount, and to limit the recovery against the indorser to the amount actually paid therefor. As the first count does not contain averments of facts sufficient to discharge a guarantor, the demurrer thereto should have been sustained. That the holder of the note is under no legal obligation to exhaust his remedy against the mortgaged property, appellee concedes. The objection that the statute is not sufficiently set out is not'urged. The position that the statute bars no remedy or .right, held by the holder of negotiable paper, is not well taken. Under the statute the holder cannot charge the indorser by demand and notice of non-payment. He must pursue the course prescribed in the statute. Bank v. Hawly, 1 Scam. 580; Chalmers v. Moore, 22 Ill. 359; Nixon v. Weyhrich, 20 id. 600; Wilder v. DeWolf, 24 id. 191; Croskey v. Skinner, 44 id. 321; Hawkinson v. Olson, 48 id. 277; Pierce v. Short, 14 id. 144; Cranch v. Hall, 15 id. 264. [146] 4 -- indorsement : lex loci contractus. [145] The objection that the statute has no application when [146] the maker of the paper, at the time suit is brought, is not a resident of the State in which the suit is instituted, is also without foundation. The indorsement constitutes a distinct contract, and is governed by the law of the State where made. Bond v. Bragg, 17 Ill. 69; Holbrook v. Hibbard, 2 Scam. 465; Huse v. Hamblin, 29 Iowa, 501, and authorities there cited. i_decisions of other states. II. In objection to the second count it is claimed that the holder of negotiable paper is entitled to recover of the indorser the whole amount thereof with-0ll^. reference to the amount paid therefor. Upon this question the decisions are not in harmony. In Illinois it is held that the indorsee can recover of the indorser only the amount paid for the note. Appellee insists that as this indorsement was made in Illinois the remedy thereon is to be governed by the law of that State without any reference to what may be the law elsewhere. It is to be observed, however, that the second count in the answer which interposes this defense does not aver that the indorsement was made in Illinois; and that there is, of consequence, nothing in this count to bring this indorsement under the operation of the Illinois decisions. And here the propriety of the rule recognized in the foregoing part of this opinion is illustrated. It may be that in this branch of his defense the defendant did not intend to assume the burden of proving that the indorsement was made in Illinois, and that, therefore, he left the averment of that fact out of this count, claiming that, under a proper construction of the law, without reference to the place where the contract was made, his liability as indorser did not exceed the amount received for the note. How manifestly improper, therefore, to incorporate into this count, and either to compel him to prove, or to allow him to derive the benefits of, an allegation contained in another count. And that the decisions of Illinois, construing the common law or law merchant applicable to a contract made [147] there, do not conclude the courts oí this State as to what the law is. See Franklin v. Twogood, 25 Iowa, 520. 5. —.discount of a note no defense. Without attempting a review of the authorities bearing upon this branch of the demurrer, we deem it sufficient to state as our opinion that the indorsee in good « .. - „ , . , ® faith oí a promissory note, is entitled to recover of the' indorser the amount of the note. This view has the unqualified indorsement of Mr. Parsons. See 2 Parsons’ Notes and Bills, 428. Also, Durant v. Banta, 3 Dutch. 623 (635). It follows that the demurrer to the second count should have been sustained. Reversed.