Case ID: ind_13/html/0255-01.html
Source: Caselaw Access Project
Author: {"author": "Davison, J. \n      Per Curiam.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Marshall v. Pyeatt.
    By our statute (1 R. S. p. 379, § 16), a suit may be instituted by an indorsee against the immediate and remote indorsers, jointly.
    If the complaint, in such case, to show failure of consideration, allege that the defendants had due notice of the suit against the maker, a paragraph of the answer traversing the allegation, is good.
    But a paragraph charging that, by agreement with the maker, the plaintiff fraudulently put off the trial from torn to term, without notice to the defendants, and without their knowledge or consent, by means whereof the defendant lost the benefit of the assignment to him, &c., was held, bad, as being inapplicable to the case made by the complaint.
    Though, as a general rale, an indorsee of a promissory note assignable under the statute, cannot recover against the indorser unless he has used diligence against the maker, yet he may allege and prove an excuse for lack of diligence.
    APPEAL from the Grant Court of Common Pleas.
   Davison, J.

The appellee, who was the plaintiff, sued John D. Marshall and Daniel Dwiggins, upon the assignments of two promissory notes. The notes were given by M. and G. Osgood to Fisk and McCord, and bear date October 25, 1850. One of them is for 110 dollars, payable May 1, 1852; and the other, for 40 dollars, due at nine months.

On-the 30th of November, 1850, Fisk and McCord, the payees, assigned both notes to Marshall, who indorsed them in blank to Dwiggins, and he, by a like indorsement, transferred them to the plaintiff.

In March, 1854, Pyeatt, the plaintiff, instituted suit on the notes, against the makers, in the Fulton Court of Common Pleas, and at the July term, 1855, of that Court, there was, in favor of the makers, a verdict and judgment, on the ground that the consideration upon which the notes were given had failed.

In the complaint, it is avered that Marshall and Dwiggins, the present defendants, were duly notified of the pendency of the suit against the makers of the notes, and the grounds upon which it was resisted; and that Marshall attended, was present when the cause was tried, and aided in its prosecution, &c.

In the present case, Dwiggins was called and defaulted. Marshall appeared and answered in seven paragraphs, five of which were subsequently amended. Demurrers were sustained to the second and fifth, and upon the others, issues were made. There was a verdict for the plaintiff. Motions for a new trial, and in arrest, were overruled, and judgment rendered, &c.

The suit, as we have seen, was instituted jointly against the immediate and remote indorser. Hence it is insisted that the proceedings are erroneous.

Anterior to the present code, this position would have been tenable. Ewing v. Sills, 1 Ind. R. 125. But the rule now is, that the holder of any note or bill of exchange negotiable by the law merchant, or by law of this state, may institute one suit against the whole or any number of the parties liable to such holder, &c. 1 R. S. p. 379, § 16. This provision seems to be decisive that the remedy adopted in this case, by joint suit against the defendants, is unobjectionable.

The next inquiry relates to the action of the Court in sustaining the demurrers to the second and fifth paragraphs.

The second avers that “it is not true, as alleged, that defendants had notice of the pendency of the suit instituted against the makers of the notes, in the Fulton Court of Common Pleas, and he avers that they had no such notice,” &c.

The complaint, as has been seen, in order to show that the consideration of the assigned notes had failed, relies solely on the result of the suit against the maker, in the Fulton Court of Common Pleas, and avers that of that suit the defendants had due notice. This averment was mate-' rial; because, if they had such notice, the judgment in that case was, as to such failure of consideration, conclusive against the defendants. And it seems to follow, that the second defense, being a denial of the alleged notice, is well pleaded; because it directly controverts an allegation which was essential to the maintainance of the action, and which the plaintiff was bound to prove. Our conclusion might be otherwise, had the complaint contained an independent, affirmative averment that the consideration of the notes had failed. Howell v. Wilson, 2 Blackf. 418. As the defense stands, it constitutes a bar to the action.

A. Steele, H. D. Thompson, and M. L. Marsh, for the appellant.

J. F. McDowell, for the appellee.

The fifth paragraph is as follows: By agreement with the makers of the notes, the plaintiff fraudulently put oil the trial of said cause in the Fulton Court of Common Pleas, from term to term, without notice to the defendants, and without their consent or knowledge, by means whereof the defendant has lost the benefit of the assignment to him,” &c.

This defense is not applicable to the case made by the complaint, and is, therefore, defective. True, the indorsee of a promissory note, assignable under the statute, is not allowed to sue the indorser, unless he has used due diligence against the maker for the recovery of the note (1 R. S. p. 878, § 4); still he may allege and prove an excuse for not using such diligence. In this instance, the plaintiff, in his complaint, relies on such excuse, viz., that the consideration of the assigned note had failed, while the defense, in effect, is, that he had failed to use the diligence required by the statute. Hence, it neither controverts nor avoids any averment in the complaint, and cannot, therefore, be held a valid pleading.

For the error, in sustaining the demurrer to the second paragraph of the answer, the judgment must be reversed.

Per Curiam.

The judgment is reversed with costs.

Cause remanded, &c.