The Dallas daily herald. [volume] (Dallas, Tex.) 1873-1887, 1883-03-06
DECISION


was made payable in Texas.
In that state it is a valid contract and its
stlpuations can be enforced in tue co1"ts.
tMinervs. Paris Exchange Bank, as Texas,
$50; Roberts vs. Palmore, Il Texas. Gl7).
Therefore, all questions of usury, public
policy, costs apd penalties are eliminated
from this case, aud no point y le,. for dis
Cusslon save the question OF the neSotlaOll-
ty of the note
And this last question is oreausiHg under
the law merchant, where me courts Of the
United States are not bound by tbs decs-
ions OF the local courts under lucel statutes,
but rather by the genere' principles OF COM
mercial law.
As shown by the brief of Mr. Adelbert
Hamilton, published as an appendix to the
case of Merchants National Bank vs., Sc
yler, II Fed. Rep, page 6j2, the weight
authority is in favor o; ne negOtiahilty oil
| instruments containing stipulatiOns similar
| to those contained IN the one here sued on.
| And on principle why should not such ill.,
struments be negotiable
The amount to be paid at maturity is
| fixed and certain.
| As to what amount is to be paid in case
OF dishonor ana after msturity there may
be uncertainty, depending upon contingent
cies.
Is not the same true of.every promlssory
note negotiable by the law merchant
| The slmplelt enc in form will carry with
| IL an obligation to pay protest fees and
interest IN case of dishOnOr.
| The protest fees are contingent upon pro-
tc7t being made, and upon the number of
| iudOrsers notified.
The interest payable is contingent upon
time.
Bills Of exchange which in the matter of
| certainty OF amount stand upon the precise
footing OF prOmissory notes, carry with
thCm IN implied contract in case u dis
honor TO pay notarial expenses and interest.
(and in case Of foreign bills payable abroad
re.eXChange aud expenses besides.
That makers OF prOmissory notes may
make stipulatiOns affecting their liability
aad the remedies to be taken against them
III case OF dishOnOr, and alCer maturity,
without destroying the negotiable charac-
ter OF the notes, seems to be well settled.
4 note III the Lsuat form, to which is added
"waiying right OF appeal and all valuation
aud exemption laws" is negotiable. tHim-
norman VS. Anderson, o. Pa, I2l; Wooden
VS.. Ulrlch, CT Ind, I'D. SO IS one with q
power of attorney TO confess Judgment at.
CusAman VS.. Welsh, 10 Ohio ST., $50. Kirk
VS.. Insurance Company, 80 Wis, 1889. SO
is one directing the appropriation Of the
proceeds of the note. Treat vs.. Cooper, %
Me, 2O3).
Likewise Il stipulation may be made that
no interest shall accrue prior TO certain
date. (Helmer VS.. KrOlick, IS Mich, 37U:
or il not paid at maturity the note shall
bear interest at au increased rate. tHough-
ton VS. Francis, % H., 2ii; Towne ys. Rice
10 Mass, 6I Parker vs.. flymell, % Kan,
402).
in Towne VS.. Rice, supra, a note in the
terms following was held to be negotiable :
Sl52O.42. Boston, July /, 1873. Four
months after date We promise to pay to
Lewis Rice, receiver, or order eleven thou.
sand five hundred and forty-two one-hun-
dredths dollars, for value received, with in
tere5t at the rate of two per cent. per
month after due, having deposited with the
boIders as collateral security, with author.
NY to sell the same at the brokers' board,
or ut pubic orpnvate sale, at his option,
Oh the performance OF this promise and
without notice, (23) twenty-three receivers
certificates OF indebtedness, ST 600 each. of
the Alabama IL ChattanC oga railroad.n
In Arnold vs. Rock River Valley Union
Railroad Company, % Duer, 2O7), in addi-
ton to above, the note provided that per.
Lon not the promIsee should hold and sell
the collateral security, and this stir hlation
III addition; And in Ease the proceeds
TN reol, after paying vae principal and
interest thereon, WIN all expenses
81 81 e shati be sufficient we hold ourselves
bonnd to pay the balance on demand
In all the foregoing instances of notes and
bills OF exchange, the amounts to be paid at
maturity was certain, the collateral or add
tlulai contract, embodied IN the instrument
or supplied by the law-relating solely to
the amount promised 20 be paid, and in the
contingency OF diShon0r and expenses there.
by incurred.
Now if negotiable Instruments may carry
with them either as ballast or "baggare''
a collateral contract ia Case OF dishouor TO
pay reduced or increased or reduced inter-
est, To waive delays and homestead exemp.
tons; to confess Judgments; to appropriate
the proueeusi TO sell collateral securities TO
pay lin cases of bills) re.exchauge and ey-
penses, all without losing their negotiable
character, there is 10 principle founded in
reason which shall declare Il promissory
note to be not negotiable because it con.
tains collateral contract that in case OF
dishonor the maker shall pay the lawful
expenses directly resulting rom his owl,
miscarriage or default.
III seems to me both on principle and au.
thorlty we properly ruled on the trial of
this Case, that the note sued on was ncgoti-
able.
If the note was negotiable, the plaintiffs
who are innocent holders, may enforce the
stipulation Tor attorneys fees against the
maker. (Hubbard vs. Harrison, IS Ind.
323. British Bank VS.. Ellis, G San, 81.
Dan: Neg, Inst, sec. 62, and see Miner VS.,
Bank, 80 Texas, 500.
The remaining question in the case is
whether the court ruled correctly on the
right of plaintiff, prior to the trial, to dis.
CONTINUE against endorsers who were not
necessary parties defendant to the suit.
Inc question arises under the Texas prac-
tlce, Art. l2oo, Revised Code, TO the effect
Inc court may permit plaintiff to discon.
tinue his suit as to one or more of severaI
defendants who may have been served with
process, or who may have answered when
such discontinuance would not operate IN
the prejudice OF the other defendants"
1t is claimed that defendants had mazda
on issue with the endorsers of the note as 10
irauu III obtaining possession of the same.
thereoy making the endorsers primarily
liable, remitting defendants to the pos,.
hon OF surettes, asd that under articles
Sjs2 to 1868 of the Texas code, defendants
,tad the right to litigate the issue in the suit
brought by the plaintiffs against both
makers aud ,Adorsers.
IL is conceded that plaintiffs need NOT
have sued the endorsers, but having done
so It is urged lha. they msst now stand by
and await indiiinate legislation in no wise
eilectlng them or their interests.
The position of the parties as makers an.
dorsers aud holders OF uego table paper CON
not be affected in this CONT by the rrxas
statutes IN relation TO principal and surety
Under the law merchant which In t6is
court controls the liabilities of the pattie,
the Addingtons stands to the PLAINTIFFS in
the position OF principals In the note sued
ON, and the plaintiffs ought not against
their consent . be dragged OIL into a lit,ra.
ton to determine the fraud between he
makers and endorsers, ''e
The discontinuance does not in,eriare
with the rights Of the defendants to pursne
the endorsers who may have defrauded
them, and therefore | do not think that
legally 1t operated to their prejudice. And
understand this ruling to be in accord
with Tho practice in the state courts ns do.
clarei by the supreme court of the state.