Case Name: The Marion and Mississinewa Railroad Company v. Hodge
Court: Supreme Court of Indiana
Jurisdiction: Indiana
Decision Date: 1857-05-29
Citations: 9 Ind. 163
Docket Number: 
Parties: The Marion and Mississinewa Railroad Company v. Hodge.
Judges: 
Reporter: Indiana Reports
Volume: 9
Pages: 163–166

Head Matter:
The Marion and Mississinewa Railroad Company v. Hodge.
A bill of exchange drawn by one upon himself, as by a corporation upon its secretary, is in legal effect a promissory note, and may be the foundation ofan action.
Such draft must, however, be presented for payment.
A paragraph of an answer in the form of a plea of nil debet, puts the fact of presentment in issue, and requires it to be proved.
A resolution adopted by the corporation that they would pay interest on the scrip issued by them, entitles the holder to interest on drafts drawn by the company upon its treasurer, after the adoption of the resolution, without a demand of payment.
APPEAL from the Grant Circuit Court.
Friday, May 29.

Opinion:
Gookins, J.
Hodge, the appellee, sued the appellants, an incorporated company, upon several orders, drawn in the following form:
"The treasurer of the Marion and Mississinewa Valley Railroad Company: Pay five dollars to J. D. Cook. Allowed December 22, 1853. This will be received in payment of all dues to the company. December 22, 1853. Joseph Lomax, President. Jno. M. Wallace, Secretary.
The complaint averred that the orders had been assigned to the plaintiff by the drawees, respectively, and that they had been presented to the treasurer for payment, and payment refused.
A demurrer to the complaint was overruled, and the defendant excepted. In support of the demurrer, it is insisted that an order in the above form contains no promise to pay. "We think otherwise. The complaint alleged that the orders were drawn by the company, and this the demurrer admitted. A bill of exchange drawn by the maker upon himself is,- in legal effect, a promissory note. Story on Bills, ss. 35, 59.—Marion and Mississinewa Railroad Company v. Dillon, 7 Ind. R. 404. These orders differ in form from promissory notes, and we have decided that they must be presented for payment (see the case last cited, and the same party v. Lomax, id. 648); but yet such an order drawn by the company upon its own treasurer, in favor of a third person, is a clear acknowledgment of an indebtedness in favor of the drawee, and may be the foundation of an action.
It is further said upon this point, that the last clause of the order, mailing it receivable in payment of dues to the company, shows that it is not a promise to pay money. We see nothing in this objection. The order was complete without that stipulation. It simply conferred on debtors of the company the right to use those orders in payment.
The demurrer was properly overruled.
The defendant answered in two paragraphs, 1st, denying the making of the orders; 2d, that the defendant was not indebted to the plaintiff in manner and form as stated in the complaint.
There was a trial by the Court, finding for the plaintiff for the amount of the orders with interest, new trial refused, and judgment.
The evidence consisted of the several orders, as stated in the complaint, and a resolution of the board of directors of the company as follows:
"Resolved, That all scrip orders on the treasurer of this company shall draw interest at the rate of 6 per cent, per annum from their date."
This resolution is dated September 25, 1853. Twenty-four orders of five dollars each, were given in evidence, five of which were issued before, and nineteen after, the date of the. foregoing resolution. The first paragraph of the answer, denying the execution of the orders, was not sworn to. The making of them by the company, as alleged, was therefore admitted; but there was no evidence that they had been presented to the treasurer for payment, and, according to the cases referred to, supra, the judgment must be reversed, unless their presentment was admitted by the pleadings. The second paragraph was in the form of a plea of nil debet. This, though not a direct, was an argumentative denial of the facts stated in the complaint, and under our system of pleading, the design of which is to disregard forms and retain the substance, we think the fact of presentment was put in issue by the answer.
This construction seems to be required by section 90 of the practice act (2 R. S. p. 45), which declares that, "in the construction of a pleading for the purpose of determining its effects, its allegations shall be liberally construed, with a view to substantial justice between the parties."
For want of proof of presentment of the orders, the judgment must be reversed, and the cause remanded for a new trial.
The remaining question is, what was the effect of the resolution on the subject of interest?
A note payable on demand does not draw interest until payment is demanded. Such was the legal effect of the orders sued on. Consequently, in the absence of any evidence of a demand, interest was not due upon those which were issued before the resolution above was adopted. But we think those issued after that time drew interest. It is a fair and reasonable presumption that the persons to whom they were issued took them upon the faith of that resolution.
I. Van Devanter and J. F. M'Dowell, for the appellants.
J. Brownlee, for the appellee.
Per Curiam.
The judgment is reversed with costs. Cause remanded, &c.