Case ID: ohio_14/html/0495-01.html
Source: Caselaw Access Project
Author: {"author": "Read, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Thomas B. Kyle v. Sylvester Green.
    Where an indorser of a note has indemnity to protect him against his liability he is not entitled to demand and notice of non-payment by the maker, to make him liable as such indorser.
    This is a motion for a new trial, reserved in Miami county.
    The case is the same as the preceding one, between the same parties, with only this difference, that the note on which the suit was instituted came to Green from one Hall, on the purchase of a tract of land, and Green had bound himself to make a deed to Hall on the payment of the note.
    The following is the statement of facts, and of the charge of the court, to which exception is taken:
    
      “ On the trial of this cause, at the June term of said court, for the year a. d. 1843, the plaintiff, Kyle, introduced in evidence a promissory note, indorsed by John II. Hall to Sylvester Green, and indorsed over by Green to Kyle, the plaintiff, — J. and R. Moore-being the makers, and the note being payable to John H. Hall or order. Kyle offered no evidence -whatever to show demand of makers or notice to Green in time to constitute due diligence, but introduced the title bond by Green to John H. Hall, hereto attached, and showed that Green had received the said note by indorsement from Hall in *part consideration for the deed contemplated by said title bond.
    The defendants showed that Green held the note about twenty-five days or a month after it matured, before he made a demand of the makers ; that the makers, who were at that period merchants in Troy, had some $500 worth of personal property in their hands when the note matured and for some twenty-five days thereafter, and real estate of the value, some $900, at the maturity of said note, and until the 22d of December following. There was no evidence that Green had given Hall notice of demand and nonpayment. The note was indorsed to Green in June, matured September 1, 1839, and was not sued upon until August 15, 1840, and until after two terms of the Miami common pleas had transpired.
    The makers of the note were called, and testified that Green did not demand the payment of the note until some twenty or twenty-five days after it was due. That Kyle called for the pay shortly after obtaining the note, and not receiving the pay, he requested the makers to secure it, to which they replied that they could pay it in a short time. The note was not secured. The makers testified that they eould have secured it had they been pressed to do so, but did not say whether they would have secured it or not.
    The makers had failed by December 22, 1839, but continued .to pay small demands up to the spring of 1840. Had suit been brought on the note at the first term of the Miami common pleas, occurring after Green had obtained the note of Hall, the makers would not have owned any real estate at the judgment term.
    There is pending in the Miami common pleas a bill in chancery, in which Hall sues Green for a deed.
    On the foregoing testimony the court charged that the title bond, under the circumstances, was a complete indemnity to ■Green, and that the title to the real estate could not be called out ■of Green’s hands whilst the note remains unpaid. In other words, that Hall could not exact a deed from Green before the *note was paid. That this indemnity, thus existing in Green’s hands, absolved Kyle from the obligation of making demand of payment of the makers, and from giving notice to Green of non-payment.”
    R. S. Hart, in support of the motion:
    For the defendant we insist that the court erred in their instructions to the jury. "We maintain that Hall was entitled to demand and notice, in the usual sense of those words. If this be so, the title bond is not a complete indemnity. Hall indorsed the note to Green, agreeing to pay it, as appears by the title bond itself, “ on the maker’s failing to pay it at maturity, or in a reasonable time thereafter.” Hence, we insist:
    1. That if this agreement takes the case out of the operation of the law governing ordinary commercial indorsements, it amounts to no more than this, that it is a collateral undertaking to pay the note, and that upon such construction Hall is entitled to demand and notice, as guarantor.
    2. That with respect to his remedy over against the makers of the note, he is entitled to demand and notice, in the strict sense ■of the words.
    In support of these propositions, we submit the following authorities: Chit, on Bills, 8 Amer. ed. from 8 Lond. ed., marg. p. 353, 355; Story on Bills, 109; 2 H. Black. 336; Nicholson v. Gouthit, Ib. 609; Clegg et al. v. Cotton, 3 Bos. & Pul. 239; Warrington et al. v. Furber et al., 8 East, 242 ; Phillips v. Hetling et al., 2 Taunt. 206 ; Bridges v. Berry, 3 Taunt. 130; Smith v. Becket, 13 East, 187; 8 Taunt. 92; Cory et al. v. Scott, 3 Barn. & Ald. 619; 1 Term, 405; 1 Bos. & Pul. 652; Brown v. Muffrey, 15 East, 216.
    These are all English authorities, and establish fully the positions for which we are contending. A reference to a few American, and chiefly Ohio authorities, will show that the law is the same here as in England. Green v. Dodge, 2 Ohio, *440; Lewis v. Brewster, 2 McLean, 21; Foot et al. v. Brown et al., Ib. 369; Hanks v. Crittenden, Ib. 557; Parker v. Riddle, 11 Ohio, 102; Bright v. Carpenter, 9 Ohio; Champion et al. v. Griffith, 13 Ohio, 228.
    William J. Thomas, contra,
    cited the following authorities: Chit, on Bills, 10 Amer. ed. 231, 440, n. r and 2; 7 Wend. 165 ; 17 Ib. 214; Murray v. King, 5 Barn. & Ald. 165.
   Read, J.

By the agreement between Green and Kyle, Kyle was barred from making demand upon the makers, and giving •notice of non-payment to Green. Green can not complain that Hall had no notice from Kyle. He should have given Hall notice himself, if he desired it to be done. He had released Kyle from that obligation. But so far as Green is concerned, he is indemnified by his bond, as he is not bound to make a deed for the land until the notes assigned by Hall are paid. But Green insists that the bond is no indemnity, because Hall is discharged from the payment of the note, as be was not notified of the demand and non-payment of the makers; and, therefore, that he can not collect it from Hall, and that a court of equity would compel him to execute a deed to Hall, upon the ground that Kyle and himself had so conducted themselves respecting the note as to make it their own, and a payment to that extent by Hall. If this be the fact, it is the fault of Green. It was the duty of Green to see that the liability of Hall was fixed by notice of demand and nonpayment, if it were necessary. If it were not done, Green can not complain of Kyle. If Green has so conducted respecting the note as to lose the amount, the fault and the loss are his. Whether he has or not, we do not decide in this case. But, if he has not, the land is an indemnity, and the court did not err in their charge to the jury.

Motion for new trial overruled, and judgment for defendant.