Airey v. Pearson

Holmes, Judge, delivered the opinion of the court. The suit is on a promissory note, negotiable under the statute as an inland bill of exchange. It was endorsed by [427] the payee, before due, in these words : “For value received, I assign the within note to Josiah Thornburgh, and hold myself responsible for the payment of the same; the said Pearson [the maker] to have two years in which to pay same, unless he prefers to pay sooner; interest on same to be paid annually.” The note was then endorsed by Thornburgh to the plaintiff in these words: “ I hold myself responsible for the payment of the within note.” The answer admitted the endorsement, and that the defendant thereby agreed that he would hold himself responsible for the payment of said note, though' the maker was to have two years in which to pay the same, unless he preferred to pay it sooner, with interest to be paid annually ; but denied that he agreed to pay the said note, if the same was not. paid within two years, without demand and notice, and without all reasonable means being used to collect the note of the maker. The court instructed the jury for the plaintiff, that the endorsement of the payee constituted a complete and perfect waiver of demand and notice, and refused instructions for .the defendant to the effect that he .was not liable without proof of demand and notice, nor unless due diligence had been used to collect the note of the maker, treating the endorsement as a guaranty. There were some other matters of dispute relating to a set-off and counter-claim. These were not much insisted on in the argument, and we have found nothing in the action of the court below in respect to them which it is deemed necessary to notice further. • The defence rests upon the questions arising upon the endorsements. On this subject we think the instructions of the court below were correct. Neither of these endorsements was in any legal sense a guaranty. It amounted to a waiver of demand and notice, and was an absolute engagement to be liable on the note. The note was negotiable, and still remained negotiable by endorsement. Without these words, it would have been necessary to make presentment and de [428] mand of payment on the day when the note became due and payable, and give due notice to the endorsers in order to fix their liability. They say that they will hold themselves responsible for the payment of the note, though the holder should give the maker two years’ time in which to pay it; that is to say, they agree that their liability shall be considered as fixed, without the usual demand and notice, in the same manner as if demand was made and notice given, as required by law, for the purpose of fixing the liability of endorsers. The first endorser further agrees that the holder may give the maker two years’ time for payment, he paying interest annually. The liability of the endorser having been already fixed by the previous absolute promise to pay the note at all events, the holder could have given this time to the maker as well without this consent as with it. He was not bound to use diligence to collect the note of the maker. One of two things must be true, either that demand and notice were waived, or that the endorsers were both discharged for want thereof when the note fell due, according to its tenor. Unless the words used are to have the effect of a waiver and an absolute liability, they would be wholly without meaning. The word guaranty is not used, and there is nothing in the language from which it could be inferred that the party intended only to guaranty that the holder should be able to collect the note of the maker after two years, on presentment and demand, with due notice to him after that time. Demand and notice have been held to be no part of the contract of the endorser, but merely a step in the legal remedy, which may be waived even by parol. (Barclay v. Weaver, 19 Penn. 396; Sto. Prom. N., § 148.) Where the words of the payee and endorser were, “ I sell, assign and guaranty the payment of the within note,” it was held to be a waiver of demand and notice, and an absolute undertaking to pay the note. (Allen v. Rightmere, 20 J. R. 364.) So, also, where the endorser said, “I will stand responsible” (Ridgeway v. Day, 13 Penn. 208); and, also, where the words were “ holden for the within note” (Blanchard v. [429] Wood, 26 Me. 358; Bean v, Arnold, 16 Me. 257); and tlie same doctrine was very explicitly held in Amoskeag Bk. v. Moore, 37 N. H. 539). And in Sage v. Wilcox, 6 Conn. 81, cited by the defendant, it was conceded that if the endorsement had stipulated, not for the ability of the maker only, but for the advancement of the money on a day prefixed, the contract would have been absolute. Both an endorser and a guarantor may incur an absolute and positive liability to pay the nóte at all events, according to the form of the endorsement and the intent of the parties. (Sto. Notes, § 461.) We are well satisfied that such was the operation and effect of these endorsements. Judgment affirmed. The other judges concur: