Shelby v. Judd

'The opinion of the court was delivered by Horton, O. J.: The question presented by the record is, ■ does the petition state facts sufficient to constitute a cause of [165] action in favor of the plaintiff and against the defendant? The decision of this court in Swartz v. Redfield, 13 Kas. 550, virtually disposes of the inquiry in the negative. It was there held, that the indorsement of a note, after maturity, is in effect the drawing of a new bill, payable on demand, and to hold the indorser, demand and notice of non-payment are essential. The note set forth in the petition we are considering, bears date August- 30, 1872; it is payable twelve months after date; the indorsement by defendant was made March 1st, 1874, several months after its maturity. No demand or notice is alleged in the petition, other than the demand by the institution of the suit on January 11th, 1875. Counsel suggest an exception to the rule adopted in Swartz v. Redfield, supra, for the reason that the note and mortgage were left in the custody and care of the defendant; therefore, they contend demand and notice of non-payment were waived. The suggestion is without substance, as the petition alleges that at the time of the indorsement it was agreed by plaintiff and defendant that defendant should keep said note and mortgage at the bank for safe-keeping for plaintiff, and therefore they were left in the custody and care of defendant until January 11th, 1875. An action was commenced against the maker of the note and to foreclose the mortgage, on January 11th, 1875, but the defendant was not a party to the suit, and had no notice of its pendency. This action was not commenced till May 11th, 1878, and defendant therefore had no care or custody of the note and mortgage for more than three years prior to the commencement of the action. Again, defendant had charge of the note and mortgage during the time they were in his possession only for safe-keeping. He had no authority to present the note for payment; he was not employed to collect the note; and he is not charged with any neglect of duty. It cannot be said he waived demand or notice. The case of Braine v. Spalding, 52 Penn. St. 247, to which we are referred, is not in point, because in that case the indorser took the note into his own possession and undertook [166] the collection himself. Nothing of the kind was done by the indorser of the note transferred to the plaintiff. As before stated, the defendant held the note only for safe-keeping, not for collection or presentation. Counsel also claim a liability on the part of the defendant as a guarantor, but the statements of the defendant prior to the indorsement of the note are irrelevant, as the parties reduced their agreement to writing — and this may be looked upon as the final consummation of their negotiation, and the exact expression. of their purpose. No fraud or deceit is charged in the indorsement, and hence no notice can be taken of the allegations denying the legal import of the contract expressed in that writing. It is further urged that the note was indorsed to plaintiff in payment of an antecedent debt owed by defendant, and therefore it should have been treated as a conditional payment only. The answer to this is, the parties had the power to give and accept the note and mortgage as the absolute payment and extinguishment of the debt owed by defendant, if they had so chosen. The whole matter was completely within their control. The petition alleges the plaintiff “ accepted and agreed to receive the note so indorsed in payment of defendant’s said indebtedness to her.” The action is not brought upon the original debt. The claim is, that defendant is liable as guarantor or indorser. As the contract is one of indorsement and not of guaranty, defendant is not liable as a guarantor; as no demand was made other than by the institution of a suit, and no notice given, and as neither was waived, the defendant is not liable as an indorser. The petition failed to state sufficient facts to constitute any cause of action against defendant. The judgment of the district court will be affirmed. All the Justices concurring.