Court Opinion

ID: 8628736
Source: CourtListenerOpinion
Date Created: 2022-11-24 19:34:12.299099+00
Date Added: 2024-06-11T16:55:41.853859
License: Public Domain

WOODS, Circuit Judge.
The bond is a negotiable instrument, having all the qualities of commercial paper. Commissioners of Knox Co. v. Aspinwall, 21 How. [62 U. S.] 539; Mercer Co. v. Hackett, 1 Wall. [68 U. S.] 83; Gelpcke v. City of Dubuque, 1 Wall. [68 U. S.] 175; Myer v. City of Muscatine, 1 Wall. [68 U. S.] 384. But while this general proposition is not disputed, it is claimed that the effect of the indorsement of the railroad company was simply to transfer the title to the bond, and the company did not thereby enter into the conditional contract to pay the bond which results from the indorsement of ordinary commercial paper. In short, that by its indorsement the company did not assume the liability of an indorser. The authorities cited do not justify the distinction drawn. These bonds are said to have all the qualities of commercial paper. One of these qualities is that the indorser becomes bound in case of demand, nonpayment and notice. The act of the legislature, recited on the face of the bond, gives the railroad company express power to transfer the bonds by indorsement. The railroad company has exercised the power and there is no reason why it should not assume the responsibilities of the act, unless it is made to appear that no such responsibility was fairly in the contemplation of the railroad company or the commercial public to whom the bonds were sold. The indorsement is unrestricted. The railroad company might have qualified its indorsement if it had so chosen, and thus have avoided liability. Having power to indorse, it would seem that it assumed by its indorsement the same liabilities as an individual. Doubtless the credit of the bond was improved by the indorsement of the railroad company, and the fair presumption is that the indorsement was made not only to transfer the bond but to add to Its credit If this be true, the company ought to be held to its liability as indorser.
But it is said this liability was not fairly in the contemplation of the parties to the bond; that the bond had twenty years to run; that many similar bonds have forty or fifty years to run, and it is not to be supposed that the indorser or holder contemplated that the conditional liability of an in-dorser of such paper should hang over him for a time; in all probability reaching beyond his natural life. There would be force in this argument if the indorser were a natural person. But a railroad corporation does not die. It may live for centuries, and there is no reason why it should not indorse bonds, and have its liability as indorser fixed by demand and notice on bonds running twenty, forty or sixty years. In my judgment, the argument to relieve the railroad company of its liability as indorser on these bonds cannot prevail.
It is said by way of further defense that *854the certificate of the notary does not show that notice of demand and nonpayment was served on the vice president of the railroad company during business hours of the day, after demand. The protest shows that notice was given to the principal officer of the company present in the city at the office of the railroad company during the next day. That is a sufficient service of notice. It need not be served within business hours. Bayley, Bills & N. (5th Ed.) c. 7, § 2,268; Story, Bills, § 288-290, 382; Chit. Bills (8th Ed.) c. 10, §§ 513, 514, 518.