Case ID: dc_20/html/0026-01.html
Source: Caselaw Access Project
Author: {"author": "Mr. Justice Montgomery", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

HENRY D. BOTELER vs. JAMES E. DEXTER.
    Lost Promissory Note ; Endorsement before Delivery ; Notice to Second Endorser.
    1. An action at law may be maintained upon a lost promissory note when its loss is shown to have been accidental and there is no doubt of its contents having been established by the evidence.
    2. The effect of an endorsement of a promissory note before its delivery to the payee depends upon the intention of the parlies.
    3. Due notice to a second endorser is sufficient to hold him, even though no notice was given the first.
    At Law.
    No. 27,884.
    Decided March 9, 1891.
    The Chief Justice and Justices James and Montgomery sitting.
    Motion by plaintiff for a new trial in an action of assumpsit tried by stipulation of the parties without a jury.
    
      Judgment reversed.
    
    The facts are stated in the opinion.
    Mr. Chapin Brown for plaintiff:
    Whatever may be the proper remedy in this country or in England (for they seem to be different), in case of the loss of a negotiable note before maturity, and before suit, yet the cases are uniform and the law fixed, that where a suit has been brought on the original note, before the loss of the note, and the note is lost during the time that the suit is waiting for trial, the plaintiff still has the right to maintain his action and recover judgment in that action — the general rule'being simply that the best obtainable evidence shall be produced. Green-leaf on Evidence, Vol. I, sec. 349, n. 2, and cases cited; Parson’s N. & B., Vol. 2, pp. 308, 309; Renner vs. Bank of Columbia (from this District), 9 Wheat., p. 581; Abbott vs. Striblen, 6 Iowa, 190, 191; Viles vs. Moulton, 11 Vt., 470.
    Proof of loss is sufficient. Poole vs. Smith, Holt, N. P., 144; Brown vs. Messiter, 3 Maule & S., pp. 280, 281; Allen vs. Miller, 1 Dowl., 420; Viles vs. Moulton, 11 Vt., 470; Vanauken vs. Hornbeck, 2 Green, N. J. (14 N. J. Law Rep.), 1781 Jones vs. Fales, 5 Mass., 101; Abbott vs. Striblen, 6 Iowa, 190, 191, 195; Starkie on Evidence, 536; Bouldin vs. Massie, 7 Wheat, 122, 154, 155.
    After suit brought, an attorney for plaintiff, or plaintiff himself, is a competent witness (as in this case) to prove copy of note annexed to the declaration is a true copy. Abbott vs. Striblen, 6 Iowa, 190, 191, 195; Greenleaf on Evidence, sec. 349, n. 2.
    It is not necessary to prove destruction of note. Story on Prom. Notes, sec. 111, note 3, pp. 244-248; Renner vs. Bank of Col, 9 Wheat, 581; Fales vs. Russel, 16 Pick., 315; Willis vs. Cressey, 17 Me., 9; Peabody vs. Dentor, 2 Gall., 351; 3 Martin (La.), N. S., 303.
    In the United States the practice has been not to require a plaintiff to go into equity, but the trial justice .may, before judgment is entered on a verdict, require the plaintiff to give a bond to the defendant to secure him against loss by reason of the lost note, and this the plaintiff was and still is ready to do. But yet the law seems to be, that where the defendant is protected by the Statute of Limitations, this course is unnecessary and not required. Daniel on Negotiable Instruments,, vol. 2, sec. 1481, pp. 482-85; Moore vs. Fall, 42 Me., 450; Fales vs. Russel, 16 Pick., 315-317; 40 Me., 74; Parsons, N. & B., 303, 304.
    The language used in the text of Greenleaf on Evidence (vol. 1, sec. 558) to the effect “that the instrument (note), when the foundation of the action, must be shown to be destroyed” is inconsistent with, and is contradicted by, other language used in the same treatise on this, same subject (see vol. 2, sec. 156), and is not sustained by any cases cited except those decided in England, where the law on this subject is different from that in the United States, and even in England the cases are not uniform on this point. The case cited by the author (Greenleaf) in the 2d vol., sec. 156, note 8, Renner vs. Bank of Columbia, 9 Wheat., 581, decided by the Supreme Court of the United States, on an appeal from this District,. ■decides the identical point involved in this case, and yet the author goes outside of the opinion of the Court to say that 'this (case) may have been decided upon the ground-that the loss was by the officers of the court, when no such evidence was offered in the case.
    The second point of law raised by defendant’s motion is:
    2d. “That no sufficient notice of non-payment of said note was given the endorsers.” The attention of the Court is called to the testimony on behalf of the plaintiff on this point.
    The uniform custom of the banks in this District is distinctly proved, and it is shown that this custom (which has the force of law) was strictly complied with by the notary who presented and protested the note for non-payment. See Renner vs. Bank of Columbia, 9 Wheat., 581.
    3d. The third and last point of law raised by the defendant is “ that the contract of the defendant, as proven, did not sustain the declaration.”
    The testimony on this point, both for the plaintiff and defendant, is so clear and harmonious that there-can be no doubt, it seems, that the defendant, Dexter, put his name on the back of the note with a view and intention of transferring it to Boteler, as a previous indorser to Boteler, and he (Dexter) delivered it to Clapp for this purpose, and Boteler parted with his money on the strength of Dexter’s indorsement only. Daniel Negotiable Instruments, vol. 1, sec. 663; Byles on Bills, 148 and n. (1); Parson’s N. & B., vol. 2, 18-21.
    Mr. A. L. Merriman for defendant.
   Mr. Justice Montgomery

delivered the opinion of the Court:

The plaintiff brings assumpsit, and declares against defendant as indorser of a promissory note executed February 18, 1885, by one John Pettibone to the order of R. W. Clapp, of this city, for $200, due thirty days after date.

In pursuance of the written stipulations of the attorneys for the respective parties, the trial was had without a jury. The presiding justice directed judgment for the defendant, and plaintiff, after the denial of this motion for a new trial, appealed.

No finding of facts was made, but instead the justice sends up all the evidence” duly certified.

A brief statement of the facts seems necessary:

The undisputed proof discloses that a day or two after the date of the note, Mr. Clapp called upon plaintiff, presented the note, which had been indorsed by him (Clapp) in blank, and proposed to sell it; that plaintiff refused to buy it “without another indorser,” whereupon Mr. Clapp went to defendant and told him if he “ would indorse said note Henry D. Boteler would discount or give him the money upon it;” that thereupon defendant did write his name on the back of the note,, and “ immediately under the signature” of Mr. Clapp; that defendant “never owned or.transferred said note, and that he indorsed the same solely at the request of said Clapp,” and received no “ consideration for his indorsement.”

Mr. Clapp then took the note to plaintiff, who then cashed it.

It matured on the 21st day of March, 1885, and was not paid.

June 15, 1885, plaintiff sued defendant upon it, which suit,, on June 2, 1887, came on to be tried, the trial proceeded, the note was presented and proven, and then for some reason the case was dismissed “without prejudice,” and thereafter, and on June 15, 1887, plaintiff brought this suit. On or about the 26th day of February, 1888, plaintiff lost the note, and has never since been able to find it, although he has searched for it diligently. On the trial of the present cause plaintiff gave evidence tending to prove that when the note matured it was duly dishonored, and notice given to defendant, which, notice, however, is denied by the defendant. The only notice of dishonor which was attempted to be served on Mr. Clapp was by mailing the usual “ notarial certificate” inclosed in art envelope, sealed up and directed “ Ruggles W. Clapp, Washington, D. C.”

Defendant urges that plaintiff ought not to recover, because:

1st. No recovery can be had at law upon a lost note.

2d. Because defendant was not served with notice of the ■dishonor of the paper.

3d. Because Mr. Clapp ought to have been and was not so served; and,

4th. Because defendant is not, as the declaration alleges, the indorser of the paper, but is rather a guarantor, and being shown to be such guarantor, the case, as made, is materially variant from the averments of the declaration, and his undertaking, not stating the consideration upon which it was made, is void under the Statute of Frauds.

If the first of these questions were an open one, it would be worthy of the closest consideration, and many potent reasons might be arrayed in support of as well as against it, and there are many eminent authorities on either side. But we regard it as settled in this jurisdiction by the decision of the Supreme Court of the United States in the case of Renner vs. Bank of Columbia, 9 Wheat., 581, where the question was treated as one of evidence, and it was held that where the original note having been in court but a short time before, and introduced in evidence in another trial, was thereafter lost by accident, and upon thorough search could not be found,” there being nothing to indicate a suspicion that it was purposely withheld, and no doubt existing as to its real contents, parol evidence of such contents might be given and a recovery had upon it. That case was in all material respects like the one under consideration, and must, we think, govern it.

It is probably desirable to next dispose of the question whether the defendant is or is not a guarantor of the paper in suit. Mr. Parsons says (Par. on Notes and Bills, 120):

“There is much diversity of opinion among the courts of the different States as to the nature of the contract to be implied from the blank indorsement of one not a party to the bill or note, when the paper is negotiable, and the indorsement is made before its delivery to the payee. In some States, one indorsing in such manner is prima facie regarded as a guarantor, in others as an endorser, and in others as a joint promissor or surety. But in most of the States the effect of such an endorsement is held to depend upon the intention of the parties, which may be ascertained by parol evidence.”

The author cites a large number of authorities in support of this averment.

We are satisfied that it was intended by all the parties to this transaction that the defendant was to be, and was an endorser of this paper.

We do not think that it must be conclusively presumed as matter of law, that his undertaking was that of a guarantor.

The form and place of his signature is that of an endorser in blank. The plaintiff required the payee to secure another indorser before he would take the paper. The maker asked defendant to indorse, and he consented to do so. We think the obligation of Mr. Dexter in this case is that of an indorser, and not a guarantor. •• •

Yet we must determine on the “case” as we find it, the question of fact as to whether or not defendant was served with notice of the dishonor of the note. We are of the opinion that the evidence fairly preponderates in favor of the plaintiff’s contention on this subject. And we need say no more, as no question is made as to the legality of the notice, if it was actually given, as plaintiff claims.

We are also of the opinion that whether or not Mr. Clapp was duly served with notice of protest, is not a material question here.

If it were true that plaintiff did fail to notify Mr. Clapp, and thereby lost his right to sue and recover against him, it is very clear that such fact could not affect his right to recover against a subsequent indorser who did have notice.

In other words, if the holder of negotiable paper, which is indorsed by A, B and C respectively and in that order, give C due notice of dishonor, he preserves his security against him, C, even though he he do not notify A and B. 2 Par. on N. & B., 499 ; Chitty on Bills, 433.

No other question remains to be disposed of.

Upon the record, as it is presented, plaintiff is entitled to iudgment.