Carter v. Jennings

Cook, J., delivered the opinion of the court. The appellee, as holder of ~a promissory note, instituted suit thereon against one Tup Hall, as the maker of the note, and against the appellant as administrator of one Arch Harris, deceased, the indorser thereof, and from a judgment against both defendants, the administrator prosecuted this appeal. The declaration filed in this cause did not allege that demand had been made upon the maker or that notice of the dishonor of the note was given to the appellant or his intestate so as to impose liability as an indorser, and the defendants interpose a demurrer to the declaration which challenged its sufficiency on account of the omission of these averments. This demurrer was overruled, and the first assignment of error is that the court erred in overruling this demurrer. This demurrer should have been sustained. In the ease-of Gresham v. State Bank, 131 Miss. 20, 95 So. 65, in which Judge Anderson for the court reviewed and analyzed numerous authorities on this subject, it was held that a declaration which failed to charge presentation and notice of dishonor stated no cause of action and no recovery could be had thereon, the court there saying: [272] “The agreement of indorsers under the decisions of this court is simply a contract to become charged with the payment of the indebtedness represented by the note upon condition of dishonor and notice, as we have said, must be alleged and proven by the plaintiff, and if that is not done indorsers are not required to file any plea whatever. ’ ’ The appellee, while conceding that the great weight of authority is to the effect that an allegation of presentation to the maker and notice of dishonor to the indorsers is necessary to charge indorsers with liability as such, relies upon the case of Taylor v. Ross, 129 Miss. 536, 92 So. 637, also reported in 124 Miss. 330, 86 So. 809, as holding to the contrary. While the language of the opinion in Taylor v. Boss appears to be in conflict with the principles announced in the case of Gresham v. State Bank, supra, and which we herein approve and reaffirm, the opinion in the Taylor Case should be limited to the facts of that particular case and the questions necessarily decided. In that ease the defendants were sued as makers of a note and upon the first appeal it was held that the bill of complaint stated a cause of action good against demurrer, and the cause was remanded for answer. Thereupon the defendants answered the bill, setting up that they were not makers, but indorsers, and affirmatively averring as a defense against liability the want of demand and notice of dishonor. The Chancellor held that this affirmative defense was sustained by the proof offered, and on appeal the findings of the chancellor in this regard were affirmed. The appellee contends, that, if it was error to overrule the demurrer to the declaration, the appellant was not prejudiced thereby, and cannot now complain on account thereof, for the reason that, after the demurrer was overruled, several special pleas were filed by the defendants setting up the defense of want of presentation and notice [273] of dishonor to the indorser, and at the trial full proof was offered on the issues made by these pleas. Conceding, but not deciding, the correctness of the position of the appellee that the filing of these special pleas was a waiver of the defects in the declaration, still we think, on the evidence in this record, the decision of the trial judge, who heard this case without the intervention of a jury, must be reversed. The note sued on in this case was indorsed and delivered to appellee when overdue, and it was then payable on demand, under the provision of section 7, Negotiable Instruments Law (section 2585, Hemingway’s Code), that- — -“Where an instrument is issued, accepted, or indorsed when overdue, it is, as regards the person so issuing, accepting, or indorsing it, payable on demand, ’ ’ Under section 82, Negotiable Instruments Law (section 2660, Hemingway’s Code), the necessity for presentment of a negotiable instrument for payment is dispensed with “where after the exercise of reasonable diligence presentment as required by this act cannot be made; ’ ’ and under section 83 of said act (section 2661, Hemingway’s Code) an instrument is dishonored by nonpayment when “presentment is excused and the instrument is overdue and unpaid.” Under the provisions of section 71, Negotiable Instruments Law (section 2649, Hemingway’s Code), where an instrument is payable on demand, “presentment must be made within reasonable time after its issue, except that in the case of a bill of exchange, presentment for payment will be sufficient if made within a reasonable time after the last negotiation thereof. ’ ’ Upon the question of presentation for payment and dishonor, the testimony is undisputed that presentation was not made. In rebuttal the plaintiff, appellee here, offered the testimony of two witnesses to show that presentation was excused, The note here sued on was indorsed and transferred to appellee on September 27, 1919, and was then overdue; and one witness, a brother of appellee, tes [274] tided that he was unable to locate the maker of the note after November 15, 1919, and that, after that date, on account of certain business transactions pending between him and the maker of this note, he made some inquiries in an effort to locate him. A certain constable of the county testified that in the latter part of the year 1919 he had a warrant for the arrest of Tup Hall, the maker of the note, and that he failed to locate him after some effort and inquiry. There is no testimony whatever that the appellee himself did not know where the maker of this note was, or that he, or any one for him, made any effort to locate him, or that he exercised any sort of diligence to make presentment, and the fact that the two witnesses mentioned above were unable to locate the maker falls far' short of showing the exercise of that reasonable diligence by the holder which will excuse presentment. Section 102, Negotiable Instruments Law (section 2680, Hemingway’s Code), provides that: “Notice may be given as soon as the instrument is dishonored; and unless delay is excused as hereinafter provided, must be given within the times fixed by this act. ’ ’ Sections 103 and 104 of said act (section 2681 and 2682, Hemingway’s Code), provides the method of giving this notice and the time within which it must be given, while section 111 of said act (section 2690, Hemingway’s Code) provides that notice of dishonor is dispensed With when, “after the exercise of reasonable diligence, it cannot be g^ven to or does not reach the parties sought to be charged. ” ' The testimony is undiputed that the indorser, Arch Harris, owned and resided on the same farm for twenty-two years. B. B. Jennings, a witness for appellee, testified that Harris was a customer of the firm of I. E. and B. B. Jennings, a mercantile firm composed of the appellee and B. B. Jennings, and that about December 1, 1919, under the direction of appellees, he notified the indorser, [275] Harris, of the nonpayment of the note, and that the appellee would seek to hold him liable as indorser. There was no effort made to show tbe exercise of that reasonable diligence which would dispense with notice of dishonor, and, if there had been testimony which showed the exercise of that diligence which would have excused presentment, there was no testimony which would have excused the delay of more than sixty days in giving notice of dishonor of this paper, which was overdue, and consequently payable to bearer when' it was transferred to appellee. The judgment of the court below will therefore be reversed, and judgment entered here for appellant. Reversed, and judgment here for appellant.