Thielman v. Guéblé & Nippert

The opinion of the court was delivered by White, J. The plaintiff sues G-uóbló & Nippert and F. Wintz, the former as makers, the latter as indorser, of two demand-notes, the one for $1500 the other $300, dated, respectively, the one June the 22d, the other June 27th, 1874, both drawn by Guébló & Nippert to the order of F. Wintz, and by him indorsed in blank. Theie was judgment below in favor of the drawers and against the indorser, the latter having alone appealed. The defense of the indorser is want of demand, protest, and notice, and discharge resulting from the bankruptcy of the drawers, and the conduct of the plaintiff in the bankruptcy proceedings. Before passing on the sufficiency of the protest and notice, it becomes necessary to consider whether the indorser was entitled to notice, the plaintiff contending that his relation being that of a surety not within the benefits of the law merchant, he was not discharged by want of reasonable protest and notice. The solution of this issue presents two questions for our determination : First, where one is sued eo nomine as an indorser, is evidence admissible to show, under- the general-relief prayer, that the defendant was not an indorser, but a surety ? If the evidence be in the record tending to that end, ought it to be considered in the absence of all formal objection to its introduction? If yes, does-the proof in the record show their relation of suretyship ; and if so, was-protest necessary ? 1st. If the person here sued as indorser was, on the-' face of the note, not a party to it, in the commercial sense of the word, we have no doubt that although sued as indorser the liability resulting from his contract, and which was patent on the face of the instrument, could be enforced despite the mistaken designation as indorser iru the pleadings. Chorn vs. Merrill et al. 9 A. 533. But such is not.th& case here, where the party sued as an indorser is, so far as can be discovered by the paper itself, nothing but a commercial indorser, the notes being drawn to his order, and by him indorsed.in blank. However, if the rule in Chorn vs. Merrill ought not to be applied to a case-where the suretyship depends on proof dehors the note, we think it has. application where the proof relied on to show the suretyship has been admitted without formal objection, and such is the case here, for none of the objections noted in the record contain such statement of grounds as to render the objections in- the note of evidence equivalent to bills [262] ■of exception. Before considering the proof on the subject of the sure-tyship, which is conflicting, we will consider the relation of the parties •as shown by the notes and the testimony, as to which no conflict exists. The proof of that nature is, that the notes were delivered by the ■makers to the present holder in the condition in which they now are, with the indorsement of the payee on them, thus showing that they were indorsed by the payee for the benefit of the makers, and left with them for use. Did this state of facts, alone render the payee and in-■dorser so liable as surety as not' to entitle him to protest and notice ? ‘There can be no doubt, as taught by an overwhelming current of authority, going back almost to the birth of our jurisprudence, that one, ■who, not a party to commercial paper indorses it, becomes a mere surety, mot entitled to protest and notice. Weaver vs. Marvel, and authorities there cited. There can also be no doubt since Weaver vs. Mar"vel, 12 A. 517, that an accommodation indorser is quoad the holder a mere commercial indorser, entitled as such to due notice. Ball vs. Grand, 14 A. 305; Field vs. Delta Company, 21 A. 25 ; Crane, Executor, vs. Trudeau, 19 A. 308. It is evident that the indorsement in the present case does not «come within the first rule to which we have referred, because the paper •is drawn to the order of the indorser, and he is not only, therefore, not •to be considered as a third - party to the paper, but is, on the contrary, -•a regular commercial payee, through whose blank indorsement the formal title regularly passed. We think it is also equally clear that the ■mere fact of the paper having been delivered to the holder by the •drawers does not per se create the relation of suretyship, because it ¡simply shows the indorsement to have been one for accommodation. ‘True, in Crane vs. Trudeau, the court in recognizing the settled rule «that an accommodation indorser was entitled to notice said that where the transferee of a note takes it from the maker with the indorsement ■on it the indorser was a mere surety; but, as said in Field vs. Delta ‘•Company, this statement was purely obiter, ’and was, we think, not well founded. In Weaver vs. Marvel, 12 A. 517, the notes were delivered by the maker with the indorsement, and yet, as the parties were formal •parties to the paper, the relation of accommodation indorsers was «applied. Such is the general rule. Daniel on Negotiable Instruments, vol. 1, p. 522. We have been able to find no case in the books holding that «where a note was delivered to a third party with the indorsement of the payee that that fact alone made the payee other than an accommodation indorser. There is‘testimony in the record tending to show an express agreement of suretyship on the part of the indorser. The ¡plaintiff testifies that the money was loaned on the express understanding with the indorser that he should become the surety ; the defendant, [263] that he indorsed for the accommodation of the makers, without any ■knowledge of when or from whom the money was to be obtained. There' is nothing to discredit either, and no facts upon which we can form an estimate of probability. Under this state of facts, the burden of proof being on the plaintiff, and the written contract being in the form of a commercial indorsement, we can only follow the legal presumptions ■and conclude that the burden being on the plaintiff, he has failed to make out his case. These matters being disposed of, we have for solution the only other question : Was the indorser discharged by want of due protest and notice? The notes, as we have seen, were demand-notes, dated June 22 and 27,1874; they were protested, and notice given on the 26th March, 1879, four years and nine months from their date. The position •of plaintiff is, first, that protest and notice are only necessary when the obligation matures, and that a demand-note only matures when payment is demanded; second, that if a reasonable time is the test, the •facts of this case show the delay to have been reasonable. 1. The universal rule, we take it, is that a demand-note must be presented within a reasonable time ; and while the text-writers and books are full of cases wherein the question of what constitutes reasonable time is discussed, we have been referred to no authority, except one case, to which we will hereafter advert, questioning the general rule that reasonable time is the criterion by which to fix the period of presentment on demand-notes. Bayley on Bills, chap. 7, sec. 2, p. 324; Story on Bills of Exchange, sec. 325; Parsons, vol. 1, p. 263; Daniel on Negotiable Instruments, sec. 610. The fact of the note bearing interest does not alter the rule, although it may be an element of fact in ascertaining what is a reasonable time. See Daniel on Negotiable Instruments, loc. cit; De Lane Co. vs. Fredick Stokes & Co. 5 Rh. I. p. 179 ; Ayer vs. Hutchins, 4 Mass. 370 ; Thurston vs McKown, 6 Ib. 528; Hemmenway vs. Stone, 7 Ib. 58 ; Field vs. Nickerson, 13 Ib. 131, 137, 138 ; Stockbridge vs. Damon, 5 Pick. 223; Thomson vs. Hale, 6 Ib. 259; Sylvester vs. Crapo, 15 Ib. 92 ; Stevens vs. Bruce, 21 Ib. 193 ; Ranger vs. Cary, 1 Met. 369 ; Am. Bank vs. Jenness, 1 Ib. 288 ; Knowles vs. Parker, 7 Ib. 31; Tucker vs. Smith, 4 Greenl. 415; Dennett vs. Wyman et al. 13 Verm. 485 ; Camp vs. Clark, Trustee, 14 Ib. 287 ; Nevins vs. Townsend, 6 Conn. 5; Wetley vs. Andrews, 3 Hill (N. Y.) R. 582 Carll vs. Brown, 2 Mich. 401. The one case differing, as we think, from the entire current of authority is that of Merritt vs. Todd, 23 N. Y. 28 ; but it was decided by a divided court, and its correctness has been questioned. 41 N. Y. 595. However, even did its reasoning raise doubt in our minds as to the -correctness of the general commercial law, we would hesitate long before departing from the general rule of the law merchant on the author-. [264] ity of one decision, which has been aptly said “was a departure front' every case in this country previously decided on the same point.” 41 N. Y. 595. But the reason of the conclusion in Merritt vs. Todd is not in our view satisfactory; it seems to have, in a large measure, resulted from a desire to arrive at some mope certain test than that of a reasonable time, which, in the nature of things, depends on the facts of each case. In seeking this end it establishes a principle which extends the-time for presentment to an indefinite period, and if it does not render-less certain, assuredly renders less equitable, the wise principle of reasonable delay by allowing a holder to indulge in any delay, however unreasonable. The only remaining question then is, was the delay of' nearly five years in the present case unreasonable? The parties were-both residents of this city, and in the .absence of particular or peculiar-conditions the question would seem hardly to admit of but one, an-affirmative answer. The plaintiff explains and justifies the delay by the-conduct of the indorser, who he swears made frequent promises and statements, by which he was induced to abstain from demanding payment. But on this subject we have the same conflict of testimony as that previously stated. The delay being, if unexplained, clearly unreasonable, and the testimony by which it is sought to be explained being directly contradicted, without any preponderance in either the-number or credibility of the witnesses, the only conclusion left open for our adoption is to hold that the delay of nearly five years not being explained it is evidently unreasonable, and the indorser is therefore discharged. It is therefore ordered that the judgment below rendered against F.. Wintz be and the same is hereby reversed, and it is ordered that there be judgment against the plaintiff and in favor of Wintz, rejecting plaintiff’s dpmand with costs in both courts. Rehearing refused.