Case Name: HIBERNIA BANK & TRUST CO. v. DRESSER
Court: Louisiana Supreme Court
Jurisdiction: Louisiana
Decision Date: 1912-06-04
Citations: 132 La. 532
Docket Number: No. 19,329
Parties: HIBERNIA BANK & TRUST CO. v. DRESSER.
Judges: See dissenting opinion of PROVOSTY, J., 61 South. 563.
Reporter: Louisiana Reports
Volume: 132
Pages: 532–544

Head Matter:
(61 South. 561.)
No. 19,329.
HIBERNIA BANK & TRUST CO. v. DRESSER.
(June 4, 1912.
On Rehearing, Feb. 17, 1913.)
(Syllabus by the Court.)
1. Bills and Notes (§§ 241, 422*) — Indorsement— Notice of Dishonor
A note reading, “We, the signers, indorsers, sureties, and all of us,-in solido, promise to pay to the order of the Hibernia Bank & Trust Company * * * sixty thousand dollars for the value received, with interest,” etc.; indorsed before delivery to the r"T"" '“"in indorsers unconditionall-¥^and»mpera.tes as a waiver of notice of dishonor.
^pBdr-Notor' Ear e44rer — 5asSs, see Bills and Notes, Cent. Dig. §§ 542, 547-559, 1196-1208; Dec. Dig. §§ 241, 422.*]
2. Bills and Notes (§ 243*) — IndorsementNature of Obligation.
Under section 63, Act No. 64 of 1904, known as the “Negotiable Instrument Law,” a person placing his signature on a note otherwise than as maker is deemed to be an indorser, “unless he clearly indicates, by appropriate words, his intention to be bound in some other capacity.”
[Ed. Note. — For other cases, see Bills and Notes, Cent. Dig. §§ 549, 552, 553; Dec. Dig. § 243.*]
3. Bills and Notes (§ 243*) — IndorsementNature of Obligation.
In the instant case, the defendant by indorsing the note, which on its face bound him to pay the amount at maturity, without condition or reservation, bound himself in another capacity than that of indorser.
[Ed. Note. — For other cases, see Bills and Notes, Cent. Dig. §§ 549, 552, 553; Dec. Dig. § 243.*] .
Provosty, J., dissenting.
On Rehearing.
4. Bills and Notes (§ 179*) — Nature and Requisites — “Negotiable Promissory Note.”
A negotiable promissory note within the meaning of the negotiable instrument law is .an unconditional promise in writing made by one person to another, signed by the maker engaged to pay on demand, or at a fixed or determinable future time, a sum certain in money tc order or to bearer. Where a note is drawn to the maker’s own order, it is not complete until indorsed by him. Section 184, Act No. 64 of 1904, p. 147.
' [Ed. Note. — For other cases, see Bills and Notes, Cent. Dig. § 428; Dec. Dig. § 179.®
For other definitions, see Words and Phrases, vol. 5, pp. 4770, 4771.]
.5. Bills and Notes (§ 164*) — Negotiability —Promise to do Other Acts.
An instrument which contains an order or promise to do any act in addition to the payment of money is not negotiable. Section 5, Act Ni>. 64 of 1904, p. 147.
[E'd. Note. — For other cases, see Bills and Notes, Cent. Dig. §§ 411-414, 417; Dec. Dig. § 164.*]
6. Bills and Notes (§ 166*) — Negotiability —Promise to do Other Acts.
A promissory note, otherwise negotiable, is rendered nonnegotiable where a stipulation in respect to collateral security is attached with a recital that, should said securities decline in value, the maker of the note agrees to furnish and pledge additional securities satisfactory to the holder, and to attribute, by the payee of the note, to the payment thereof any deposit which the payee may have belonging to the maker, and the pledging of the securities mentioned in the note for another indebtedness of the maker to the payee. Section 5, Act No. 64 of 1904.
[Ed. Note. — For other eases, see Bills and Notes, Cent. Dig. §§ 418, 421; Dec. Dig. § 166.*]
7. Bills and Notes (§ 155*) — Nature and Requisites — Time oe Payment — “Payable at Determinable Future Time.”
An instrument is payable at a determinable future time, within the meaning of the negotiable instrument law, when that time is at a fixed period after date or sight, or on or before a fixed or determinable future time specified therein, or on or at a fixed period after the occurrence of a specified event, which event is certain to happen, though the time of happening be uncertain. An instrument payable upon a contingency is not negotiable, and the happening of the event does not cure the defect. The right given to the holder of a note to call for additional securities, and thus cause the instrument to mature on that call, makes the note payable upon a contingency, and therefore not negotiable. Section 4, Act No. 64 of 1904, p. 147.
[Ed. Note. — For other cases, see Bills and Notes, Cent. Dig. §§ 407-410; Dec. Dig. § 155.*
For other definitions, see Words and Phrases, vol. 6, pp. 5245, 5246.]
Breaux, C. J., and Provosty, J., dissenting.
Appeal from Civil District Court, Parish of Orleans; Porter Parker, Judge.
Action by the Hibernia Bank & Trust Company against John M. Dresser. From a judgment for plaintiff, defendant appeals.
Affirmed.
Charles Payne Fenner, Benjamin T. Waldo, T. E. Furlow, and 1-Iowe, Fenner, Spencer & Cocke, all of New Orleans, for appellant. Foster, Milling, Brian & Saal and Robt. H. Marr, amici curite, all of New Orleans. Mc-Closkey & Benedict, of New Orleans, for appellee.

Opinion:
LAND, J.
This is a suit on a note dated March 17, 1911, for $60,000, to the order of the plaintiff, signed by the "Southern Gravel & Material Company, by J. M. Dresser, Pres.," and indorsed on the reverse as follows:
"Secured by mortgage note of Southern Gravel & Material Company for $100,000, dated 3/17/11, due on or before three years from date.
"J. M. Dresser.
"Geo. W. Neal."
The note thus indorsed was delivered to the plaintiff.
Under a special stipulation embodied in the note, it became due on December 26, 1911, by reason of the failure of the maker to furnish additional satisfactory securities on demand of the payee. No notice of this demand and failure was given to J. M. Dresser.
The contention of the defendant is that he was an indorser, and was discharged by reason of the failure of the plaintiff to give him notice of the dishonor of the note.
The instrument reads, in part, as follows:
"New Orleans, La., March 17, 1911.
"One year after date, we, the signers, indorsers, sureties and all of us, in solido, promise to pay to the order of the Hibernia Bank & Trust Company, at their office, New Orleans, La., sixty thousand and 00/100 dollars, for the value received, with interest thereon at the rate of 7 per cent, per annum, from date until paid."
As above stated tbe names of J. M. Dresser and Geo. W. Neal appeared on the back of the note when it was issued and delivered to the payee. The language used embraced all signers, indorsers, and sureties, whose names appeared on the instrument. All of them bound themselves in solido to pay the amount of the note at its maturity. The indorsers bound themselves in the same manner and to the same extent as the maker or signer. J. M. Dresser and Geo. W. Neal did not bind themselves as indorsers, but the indorsers, Dresser and Neal, bound themselves to pay the amount of the note at maturity to the Hibernia Bank & Trust Company. Their liability as inaorsers was conditional; and, if it was not intended to bind them otherwise, the reference to indorsers and sureties in the. body of the instrument becomes meaningless. Such a construction is not admissible.
"When a clause is susceptible of two interpretations, it must be understood in that in which it may have some effect, rather than in a sense which would render it nugatory." Civil Code, art. 1951.
In the language of Judge Martin, a construction that "corrodes the bowels of the text" is not admissible.
Defendant relies on section 63 of Act No. 64 of 1904, p. 157, relating to negotiable instruments, which reads as follows:
"Sec. 63. A person placing his signature upon an instrument otherwise than as maker, drawer, or acceptor, is deemed to be an indorser, unless he clearly indicates by appropriate words his intention to be bound in some other capacity."
In the case at bar we think that this intention is clearly indicated on the face of the instrument.
The question before ús has never been considered and decided by this court, and dicta in the cases cited have no weight as authority. In Pugh v. Sample, 123 La. 794, 49 South. 526, 39 L. R. A. (N. S.) 834, the question was one of subrogation of the accommodation indorsers to the rights of a mortgage creditor, who had been paid by the maker with the proceeds of the note. There was no controversy between the holder of the note and the indorsers, who had expressly waived presentment, demand, notice, and protest. In Hackley State Bank v. Magee, 128 La. 1008, 55 South. 656, there was no contention that the parties who indorsed the note had been discharged for want of notice of dishonor. They alleged that the note had been paid. The court referred to them as sureties. The negotiable instrument act of 1904 was not mentioned in the opinion in that ease, and it does not appear that the question whether the defendants were indorsers or sureties was an issue in the litigation.
We agree with the learned counsel for the defendant that section 63 of Act No. 64 of 1904 fixed the liability of indorser on any person signing a note or bill, without qualification, otherwise than as maker, drawer, or acceptor. But the same section recognizes that a person so signing may indicate, by appropriate words, his intention to be bound in some other capacity. The learned counsel contends that the defendant's position as indorser was not affected by the words of the instrument which bound him in solido with the maker of the note. The answer is that the defendant promised to pay the note at its maturity, and that no such obligation was incumbent on him as indorser. Section 66 of Act No. 64 of 1904 provides that every indorser, who indorses, without qualification, engages that on due presentment the instrument shall be accepted or paid, or both, as the case may be, according to its tenor, and that if it be dishonored, and the necessary proceedings on dishonor be duly taken; he will pay the amount to the holder, or to any subsequent indorser who may be compelled to pay it. The difference between such a conditional engagement and the de fendant's promise to pay the amount of the note, with interest, when it becomes due, is too glaring for discussion.
The plaintiff discounted the note on defendant's promise, to pay, and not on his contingent engagement as an ordinary indorser.
We are of opinion that the defendant, by his unconditional promise to pay, waived notice of dishonor. It is unnecessary to decide any other question.
Judgment affirmed.
See dissenting opinion of PROVOSTY, J., 61 South. 563.