The evening times. [volume] (Grand Forks, N.D.) 1906-1914, 1913-03-17
Hearing is Legal.
MADAM LOSES NOTE ACTION
Suit Against the Grand Forks MGR.
camille Company Ends in
Supreme Court.

n decision OF the Grand FORKS
district court in favor Of the Grand
in which A. E. McAdam appears as
the plaintiff, has been affirmed by the
supreme court. The action involves
a note and has been in the courts for
many years. The syllabus follows:
A. E. McAdam, plaintiff and appel
liant, VS.. Grand Forks Mercantile com
pany. a corporation, defendant and
respondent.
l.. Complaint examined and held
not to state a of action against
the defendant as an endorser of a
note but as a vendor and Warrantor
of a chattel merely.
2. A executed a note to 8. s en-
dorsed the same without recourse to
c. a bank. to gain credit thereon. He
afterwards paid c the due on
said note and on it being re-delivered
to c without recourse" but left his
signature thereon. Prior to such time.
A. the maker of the note, had failed
and a settlement had been made with
his creditors by which they had
agreed that AS property should be
turned over to a trustee for their
benefit and that he should be released.
cepted the final dividend of az cents
on the dollar. He. however, retained
the note. Later b sold the note with
others, having a face value of $50, 900,
to d for $51, taking at the same time
a collateral agreement by which he
expressly exempted himself from all
liability. both as an endorser and as
paper. The note. however. still had
his name endorsed thereon, though
it is not shown whether either he or
d was aware of the fact. d then
sold the note. with others, having Il
face value of $4,000 to E; and L
sold the said note. with others OF 4
face value of $1,000. to F. for $50.
delivery only. At the time Of the last
transfer E told r that the notes were
not worth anything: and F did not
know that Rs name was on the back
OF the particular note in question. nor.
on the other hand. did he know that
any dividend had been paid thereon.
though he did know that the makers
tee for the benefit of his creditors.
He also testified that the letters p and
L were on said note when purchased
by him and that he was aware of
their commercial meaning. 1t vas
also proved that both ID and r real
ized. from their purchases as a whole,
more than they had paid therefor.
lclOs k1ldL + NdS uOS IL puICudNeI Ill
due course Of negotiable paper.
3. A note payable on demand is
due within a reasonable time after its
date.
4. A note which Is payable on de-
mand and Ia purchased over a. year
after it's date will be considered t .
have been overdue when so pur-
chased.
8. In the case Of an endorsement
or transfer of a negotiable instrument
after Its dishonor or maturity, and
where the consideration passing be-
tween the endorsee and his endorsor
is not equal to the amount OF the pa.
per. the endorsee in an action against
the endorsor can recover only the
consideration he has actually paid.
6. The warranty Of the seller. un-
der section 542S r. c. 1905. which
provides that: One who sells or
agrees to sell an instrument purport-
ing to bind anyone to the perform
ance Of an act thereby warrants the
be and to he binding according to its
purport upon all parties which tend
to prove It worthless. such as the in
solvency of any Of the parties there
to. when that is material. the extinc-
of its obligations or it's invalidity
for any cause" Ia not a warranty Of
an endorsor but a warranty to the
vendee merely. which does not run
(Syliabus by the court.)
Appeal from a judgment OF the dis
trict court Of Grand. Forks. county,
].
Affirmed.
Opinion by Bruce, ]. 1