Court Opinion

ID: 6549831
Source: CourtListenerOpinion
Date Created: 2022-07-19 22:23:11.338124+00
Date Added: 2024-06-11T15:56:04.725504
License: Public Domain

Wood, J., (after stating the facts). There is no special finding of facts, and the court must consider the facts in the most favorable view for appellee that could have been taken by the trial court. When the facts are considered in this light, we are of the opinion that the circuit court might have found that the checks referred to in the testimony were not given to the appellee by the appellants in payment, either absolutely or conditionally, of the latter’s debt to the appellee. But, on the contrary, that they were endorsed by appellants and given to the appellee to hold until the drawer of the checks made a deposit of money in the bank; then if the bank honored the checks appellee was to credit the amount thereof to appellant’s account. The peculiar facts of this record distinguish the case from those cases which hold that where a creditor accepts a check drawn by a third party in favor of the payee and endorsed by the payee in payment of the payee’s debt to such creditor, that it is the duty of the creditor, if the check is not paid on presentation, to give notice of protest and nonpayment to the endorser within a reasonable time, and failure to give this notice on the part of the creditor or endorsee releases the endorser from his debt to the creditor or endorsee. The rule, well established, as stated in First National Bank of Detroit v. Currie, 118 Am. St. Rep. 537-541, is as follows: “The undertaking of the endorser of a check is that, if not paid on presentation within a reasonable time, he will pay it, provided he is properly notified. Such reasonable time for presentation and demand for payment is admitted to be within the day following the endorsement. * * * The fact that there are no funds in the account against which the check is drawn does not relieve the holder from presentation and notice of dishonor to the endorser, unless it appears that the endorser knew it. ” But here the check was not endorsed by the appellants to the appellee and received by the latter in due course or in such manner as to bring the parties within the above well known rule of the law merchant. See Adams v. Boyd, 33 Ark. 49; Minehart v. Handlin, 37 Ark. 281. The testimony, viewed in the strongest light for the appellee, shows that these checks were not taken as payments but were only taken to be left at the bank, at the request of the appellants, for collection, and if they were paid that appellee should credit the amount on appellants’ debt with appellee. The appellants knew at the time when the checks were endorsed by them that the drawer of the checks had no money then in bank with which to pay the checks. The appellee held the checks merely for the purpose of depositing the same in the bank so that the latter might hold the same until the drawer should deposit money in the bank to meet the checks; and the drawer of the checks never made such deposit. The peculiar facts, as stated, did not, in our opinion, establish the technical relation of endorser and endorsee between the appellants and the appellee within the rules of the law merchant. The taking by a creditor of a note, bill or check of a debtor for an antecedent indebtedness is not a payment or satisfaction of the debt unless it is agreed by the parties that it shall have that effect. Sharp v. Fleming, 75 Ark. 556; Henry et al. v. Conley, 48 Ark. 267. Under this rule, the testimony does not show that the appellants and appellee agreed that the checks were to be taken as payments, either absolute or conditional. Appellants rely upon the case of Minehart v. Handlin, supra, where this court announced that where a bill of exchange was taken in payment of a debt, whether absolute or conditional, that it was the duty of the holder of the bill of exchange to present the same for payment and to give notice of its dishonor to the drawer, and his failure to do so would discharge the latter both from the bill and the original debt it was given to pay. In that ease Minehart, being indebted to Handlin, gave him an order on J. N. Sarber for the amount. Sarber was indebted at the time to Minehart in a larger amount than the amount of the order and had authorized Minehart to draw the order. The order was given by Minehart to Handlin in settlement of the account. The facts as thus stated are entirely different from the facts of the present record. There the drawer had effects in the hands of the drawee at the time that he gave to the payee the order and the drawee had authorized the drawer to give the order or bill in favor- of the payee. But no such facts exist here. The bank, at the time the checks were issued in this case and nt the time the same became due, had no funds in its hands to the credit of the drawer. It had not authorized the drawer to issue these cheeks, and appellants, as the payee and endorser of the checks, knew at the time that the maker thereof had no funds in the bank with which to pay the same. Certainly under these circumstances the appellee can not be held to 'have received the checks either in absolute or as a conditional payment of appellants’ debt. Even where the technical relation between endorser and endorsee exists, where it appears that the endorser knows at the time that there are no funds in the hands of the drawee to the credit of the drawer he can not be relieved of liability and is not entitled to notice of the dishonor of the check or bill of exchange. Furthermore, the facts in this case were sufficient to establish a waiver of notice of nonpayment and protest, even if the relation of endorser and endorsee obtained between appellants and appellee. The request by the appellants of the appellee that the latter should hold the checks in order to accommodate the drawer for a few days and also to accommodate the appellants was sufficient to warrant the court in finding that the appellants waived notice of presentment, nonpayment and protest. Waiver of demand and notice of nonpayment need not he endorsed on the instrument hut can he shown by facts and circumstances aliunde. Andrews v. Sims, 33 Ark. 771. The judgment of the circuit court is correct, and it is affirmed.