Case Name: Wilson v. Ralph and Van Shaick
Court: Iowa Supreme Court
Jurisdiction: Iowa
Decision Date: 1856-12
Citations: 3 Iowa 450
Docket Number: 
Parties: Wilson v. Ralph and Van Shaick.
Judges: 
Reporter: Iowa Reports
Volume: 3
Pages: 450–452

Head Matter:
Wilson v. Ralph and Van Shaick.
The indorser of a promissory note not negotiable, is liable to a suit by the holder thereof without demand upon the maker, and notice of non-payment.
Section three of the act entitled “ An act relating to evidence,” approved Jan- ' uary 24, 1853, has not changed the rule on this subject.
Appeal from the Linn District Court.
The appellants, Ralph and Yan Shaick, executed their promissory note to Wilson and Neely, for the sum of $220; who assigned the same to the plaintiff. The note not being paid at maturity, Wilson brought suit upon it against the makers and indorsers. The note was payable to Ralph and Yan Shaick, without words of negotiability. The petition does not allege any demand by the plaintiff, upon the makers of the note, nor any notice to assignors of its non-payment. The defendants, Wilson and Neely, demurred to-the petition, and allege as ground of demurrer, that the petition does not show that the note sued on, was ever presented for payment ’ to the makers, nor that payment was refused by them. The court overruled the demurrer, and the defendants failing to answer further, judgment for plaintiff was rendered, to which defendants excepted, and appeal to this court.
George D. Woodin, for the appellants.
L. M. Preston, for the appellee.

Opinion:
Stockton, J.
The only question raised by the defendants in this cause is, whether the indorser of a promissory note not negotiable, is liable to a suit by the holder, without demand upon the makers, and notice' of the non-payment ?
The same question has been decided in New York, by the Supreme Court of that state, in the case of Seymour v. Van Slick, 8 Wendell, 421. It was there held, that the indorsement is equivalent to the making of a new note; it is a guaranty that the note will be paid; it is a direct and positive undertaking on the part of the indorsers, to pay the note to the indorsee; and not a conditional one to pay if the maker does not, upon demand, after due notice. The court further say, that the indorser in such a case, is not entitled to the usual privilege of an indorser of negotiable paper. He stands in the relation of principal, and not surety to his indorsee, and has no right to insist upon a previous demand of the maker, and notice of non-payment.
Under the Code of Iowa, (§ 949,) a non-negotiable note may be ássigned, and the assignee has a right of action thereon, against the maker in his own name. Yet by section 956, the assignor of such a note, is liable to the action of his assignee, without notice of non-payment. Has the statute, in dispensing with this notice, excused the holder also, from the necéssity of a demand of payment of the makers ? In Parsons on Contracts, 232, it is said, " when a demand is requisite, a waiver of demand should operate as a waiver of notice; for if demand of payment is not made, because unnecessary, a notice can hardly be necessary or useful. But a waiver of notice alone, is not a waiver of demand, for though the"party waiving, may not wish for a notice of the non-payment, he may still claim that payment should be demanded." 1 Parsons on Contracts, 232. This must be taken, however, to apply to negotiable paper, where a demand is necessary upon the maker or acceptor, and where the contract on the part of the indorser, is that the maker of the note will, upon due presentment, pay it at maturity; and that if it be not paid by the maker, that he, the indorser, will upon due and reasona ble notice of tbe dishonor, pay tbe same to tbe bolder. Story on Promissory Notes, § 135.
In a note not negotiable, it will be seen, as stated above, that tbe undertaking of tbe indorser is entirely different. He has no right to insist upon a previous demand upon tbe maker. Tbe bolder may write an absolute guaranty over bis indorsement, upon which a recovery may be bad against him. 12 Johnson, 159. He is liable to a suit by tbe bolder without any demand.
Has this rule been changed by section 3 of tbe act of 1853 ? Session Acts, 188. By that act, grace is allowed on bills and notes executed or payable within tbe state, changing tbe law as it existed under tbe Code. Section 957. We do not, however, understand tbe section of tbe act referred to, as requiring notice of non payment to be given by tbe bolder of a promissory note, in any case where it was not before required by tbe rules and principles of tbe commercial law,. According to tbe views which we have intimated above, as to tbe right of an indorser of a non-negotiable note, tbe indorser of such a paper was not before tbe passage of tbe act, entitled to notice of non-payment, and be is placed in no better condition by tbe act of 1853.
The judgment of tbe District Court will, therefore, be affirmed.
Judgment affirmed.