Case Name: J. L. LENHART v. O. B. RAMEY
Court: Putnam Circuit Court
Jurisdiction: Ohio
Decision Date: 1888-04
Citations: 2 Ohio Cir. Dec. 77
Docket Number: 
Parties: J. L. LENHART v. O. B. RAMEY.
Judges: Moore, Seney and Beer, JJ.
Reporter: Ohio Circuit Decisions
Volume: 2
Pages: 77–82

Head Matter:
BILLS AND NOTES.
[Putnam Circuit Court,
April Term, 1888.]
Moore, Seney and Beer, JJ.
J. L. LENHART v. O. B. RAMEY.
1. Indorser and Assignor Distinguished.
B. executed and delivered to L. his promissory note in ordinary form, payable to L. or bearer. L., over his name, indorsed the note to M. as follows: “I assign all my interest, right and title of the within note to M.” Held: That L. was an indorser and not a mere assignor of said note, and as such indorser liable upon proof of demand and notice.
2. Question of Diligence in Serving Notice of Dishonor, one for Jury.
Where the facts are disputed, the question of diligence of a notary in serving notice of non-payment .of note upon the indorser, is one for the jury to determine-under the instruction of the court.
3. Delay in Presentation.
Where a note fell due on Saturday, in a city having no postal delivery, and the notary, being unable to get admittance to indorser’s house, he being away from home, mailed the notice, and it was received Tuesday, this is due diligence.
Error to the Court of Common Pleas of Putnam county.
The facts are sufficiently stated in the opinion.
This Judgment was, affirmed by the supreme court, without report, November 28 1890.

Opinion:
Moore, J.
Suit was originally brought to recover upon a promissory note, of which the defendant below, Jesse Brayton, was maker, and the other defendants below, J. S: Lenhart and George Mootz, were indorsers. Verdict was had, and judgment in favor of plaintiff O. B. Ramey.
. The plaintiff below, O. B. Ramey, was a bona fide purchaser of the note, for valué, before maturity.
Lenhart alone made defense:
First. — That he was not liable in law upon the indorsement that he made upon the note.
Second. — He denied all the allegations of the petition relating to demand upon the maker, Brayton, and notice to him of non-payment. The execution of the note by Brayton; the indorsement of Lenhart; the bona fide purchase for value before maturity by Ramey, were all admitted.
The instrument sued upon is in the ordinary form of a judgment note, made payable to J. L.' Lenhart, or-bearer, and signed by Jesse Brayton as 'maker. The indorsement made by Lenhart is "I assign all my interest, right and -title of the within note to George Mootz. J. L. Lenhart."
The indorsement by Mootz to Ramey is in blank.
The claim made by Lenhart is that the words used made simply a transfer of the note, and are not an indorsement creating the liability claimed by Ramey, the defendant in ;error.,.
The note being made payable to Lenhart, or bearer, is transferable by delivery, and the words "I assign all my interest, right and title of the within note to George Mootz," have no legal import, for without them the mere delivery of the note has the same effect in transferring all the interest, right and title of the payee, or holder; the words added nothing, and unless they restricted the liability of Lenhart, were entirely useless: Did the words used restrict Lenhart's liability?
It is well settled that the indorsement of a note made payable to "bearer" has the same effect and creates the same liability as if made payable to "order." Daniel on Negotiable Instruments, 3rd ed., sec. 663a; Story on Promissory Notes, p. 132.
In Eccles v. Ballard, 2 McCord (S. C.), p. 388, it is held that an indorser upon a note payable to bearer, is liable as upon a new bill to the bearer.
The court says: . "The first point to be decided in this case is, whether the indorsement of a note payable to bearer, creates a legal liability in the indorser to pay the note, and on this point I am satisfied, for the note was negotiable' in its nature, and although it would pass by delivery without indorsement, yet if one chose to put his name on it, it shows that it passed from him and is a new bill to the bearer."
In Brush v. The Administrator of Reeves, 3 Johnson, 439, the plaintiff declared on a promissory note given by one Spring to Reeves, the intestate, and payable to him or bearer. The note was indorsed over by Reeves, and the present suit was brought by the indorsee against his administrators. There was a general demurrer to the declaration. Held: "The note was negotiable under .the statute, and transferable without indorsement, but if the payee chose to put his name on the back, he became as much bound as an indorser as if the note had been made payable to him or order.
It was ruled by Holt, C. J., in the case of The Bank of England v. Newman, 1 Lord Raym, 442, that if a person indorses a bill payable to bearer, he becomes a new security, and is liable on the indorsement.
In Smith et al. v. Rawson, 61 Ga., it was said: "The note was payable to Barton, or bearer, and Barton's indorsement could not'affect the bearer's right to recover. It bound him -to pay if the maker did not, and that was its only legal effect.
The authorities are to the effect that an indorsement made upon a note payable to bearer, has the same legal effect as if made to order. In this action — do the words used restrict the indorsement so as to make but a transfer of the instrument, as claimed by plaintiff in error, or is Lenhart liable as an indorser? The .court below held the latter, and a majority of this court adheres to that opinion.
Daniel on Negotiable Instruments, sec. 688b and 688c, says:
"The payee of a promissory note assigned 'all his right and title' thereto in writing on the back of the instrument to a third-party. Held 'That the assignment was equivalent to the indorsement of the note, and bound the assignor as indorser.' " Sears v. Lants et al., 47 Ia., 658.
It must be regarded as settled in this state, that the assignment of a promissory note by the payee thereof, in writing on the note, vests the legal title thereof in the assignee, so as to enable him to bring amaction in his own name against the maker. Such being true, an assignment amounts to an indorsement, and makes the assignor liable as an indorser within the rule laid down by Parsons, above cited.
It has been held, and such is the rule, that to relieve one who indorses paper from liability as indorser, he must insert in the contract itself words clearly expressing such an intention. Daniel on Negotiable Instruments, 700.
The case of Aniba v. Yeomans, 39 Mich., cited in Daniel on Negotiable In struments, and given in full in the note to the text, bases its decision upon the stated ground that by using the terms, "right, title, and interest," the indorsement includes much less than if in the ordinary form, or in blank. It appears to have escaped the attention of the court, or at least it is not mentioned, that the words used are implied in law, and add nothing more than if admitted and the indorsement was in blank, or as in the case where the note is made payable to bearer, the indorsement would be entirely for no purpose and to no effect if the indorser is not to be held liable.
A mere delivery of the note would be as effective to pass the right, title and interest of' Lenhart as if the words named were indorsed upon the note and signed by him. The words written over Lenhart's signature imply nothing more than if left blank. They are not restrictive of the indorser's liability, and cannot limit the liability which the law imposes.
The indorser contracts that if the maker of the instrument does not pay, he will. This of course is subject to the conditions imposed by the law of demand and notice, and the rule is, that if he is not to be liable he must use such language, or make such contract, as will clearly protect him from such liability; such as would import, "without recourse," these words being most frequently employed.
If Lfenhart's name, as payee in the note in controversy, imported nothing more than if made payable to bearer alone and fie was but an accommodation indorser, the words used by him were entirely useless; they could have had no effect at all, and the purpose to use them was an idle one. On the other hand, if Lenhart, the payee and holder, delivered the note to Mootz, the indorsement made would be equally useless, and the maxim used in the text of Daniel before cited, sec. 688, "The expression of what is tacitly implied is inoperative," would apply. A majority of this court is of opinion that Lenhart is liable upondre note sued upon as an indorser.
The only question remaining for disposition is, whether due diligence was exercised in notifying the indorser, Lenhart, of non-payment of the note.
The note became due November 6, 1886, and was protested on that day. Lenhart resided in Leipsic, in this county, the place at which the note was made payable, and where the notary resided. -Mr. Lenhart was on that day, and until some time after the close of business hours, away from home. The notary says, that he made an effort to find him, but failed; that he went to his house, and there failed to find anyone, or to gain admittance at the front door, although he "tried it"; he then deposited the notice of non-payment in the postoffice at Leipsic, duly stamped and addressed; that Lenhart had a box in the postoffice in connection with a firm of which he was a member, and that the mail was taken out frequently; that Lenhart had no place of business in Leipsic. It also appears that Lenhart did not get his mail on Saturday, November 6, 1886, and was not at the postoffice the next day, and was away from home on Monday; but that on Tuesday morning, the 9th, he received his mail at the postoffice, and with it the notice of the dishonor of the note.
If these facts are sufficient to sustain the verdict and judgment, there ,is no error in either the charge of the court, or the refusal to charge as requested by Lenhart, defendant below.
Section 3176, Rev. Stat., as amended, 79 O. L., 30, does not affect this case. See also, 3 Williams St., 155. This amended section provides a mode for giving notice in cities having a postal delivery, to take the place of personal service— a cumulative method in such cases.
Lenhart had no place of business at which notice could have been served; his domicile was, however, in the village of Leipsic; he was away from 'home when the note fell due. The jury had a right to find from the evidence that there was no one at the house to receive the notice: at least, that the notary exercised due diligence to determine that fact. In Story on Promissory Notes, 315, sec, $40, thg author says; "What will be due and reasonable diligence on' the part of the holder, in making inquiries to ascertain the actual residence or place of business of the 'maker, either originally, or upon a change of domicile, is a matter susceptible of no definite rule, and must essentially depend upon the circumstances of each particular case, and will be governed by the same general considerations as those which regulate the place and mode of notice to parties."
in Lawson & Covode v. The Farmer's Bank of Salem, 1 O. S., 206, the court uses this language: "The law does not require the utmost diligence in the holder,- in giving notice of the dishonor of a bill or note; all that is requisite, is ordinary or reasonable diligence, and this is not only the rule and requirement of the law merchant, but a statutory provision of this state. But what amounts to due diligence or reasonable notice is, where the facts are ascertained, purely a question of law, settled with a view to practical convenience and the usual course of business."
In the case under consideration there is a dispute of facts. The notary was not required to use extraordinary diligence, or make unusual efforts to find the indorser, or to furnish him with the notice. If, in order to bind the indorser, it ¿s absolutely required that he be either served with notice, or it be left at his domicile, he could evade both and escape liability by absenting himself for a short time and locking his doors. The notary in this case made inquiry at the place of business of a firm of which Lenhart was a partner, and which place he frequented; went to his house; endeavored at the usual place to gain admittance by knocking upon and trying the door, and failed to obtain it. Afterward, and on the same day, he deposited the notice addressed to Lenhart in the post-office, prepaid. We think the jury had, upon this evidence, the right to find that due diligence was used, under the instruction of the court.
If we are correct in this, there was no error in the charge of the court. Judgment of the court of common pleas is therefore affirmed.
Beer, J., concurring.