Court Opinion

ID: 7090328
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:05:03.311708+00
Date Added: 2024-06-11T16:13:04.258571
License: Public Domain

Opinion by

Hastings, C. J.
Without reciting the history of this case, we will proceed to assert principles which, when applied, will dispose of it.
1. That when the name of a third person, not a party to a negotiable promissory note, is written on the back thereof, the law presumes that he is a strictly commercial indorser; and the inference is so strong, that it will prevail even when his obligation as indorser cannot, be made operative, without first obtaining the name of another to the paper. Herrich v. Carman, 12 John. 159; Tillman v. Wheeler, 17 ib. 326 ; Crozer v. Chambers, 1 Spencer, 256.
In the ease of Tillman and Wheeler, the court decided that such is the legal presumption from the appearance of the paper without explanatory proof. See, also, Hall v. Newcomb, 3 Hill, 234, in which it is decided that such an indorser, not being privy to the consideration, will be considered a strictly commercial indorser.
2. That such an indorsement on a note not negotiable, or any other instrument of writing, (except on negotiable paper,) without proof oral or written, of an undertaking to be responsible in some manner for a good consideration, means nothing, and the indorser incurs no liability.
3. That such an indorser on paper not negotiable, or negotiable, incurs whatever liability he assumes; that of guarantor surety, original maker, or second indorser, if he so agree, and the consideration be sufficient, and that the holder has the *335right to fill up the blank indorsement with the undertaking, and recover accordingly. Nelson v. Dubois, 13 John. 175 ; Seabury v. Mungerford, 2 Hill, 80; ib. 181.
4. If such an indorser assume the responsibility of guarantor, either on a note negotiable or not negotiable, he is not relieved from liabilities, unless he prove that, for want of demand and notice, he has been injured, and then will only be discharged in an amount equal to such injury. Rhett v. Poe, 2 How. 485.
5. Under our statutes it is not necessary for a plaintiff in a suit against an indorser to prove demand and notice, to entitle him to recover.
• If the above conclusions be correct, and they are deducible from the latest and ablest decisions, it necessarily follows that Dunlap could not be charged as a maker of the note in controversy, as is alleged in the first count of the declaration, nor in the character of a guarantor, as averred in the second count, without the evidence to make him incur such responsibilities. The cases cited making Dunlap responsible as a maker, because of his blank indorsement, by presumption of law, and authorizing the holder to declare against him as such, have been so explained, or indirectly overruled by later decisions, and are so contrary to what is commonly understood to be the liability of such an indorser, that we do not regard them as of any weight in this cáse.
In the case of Crozen v. Chambers, Chief Justice Hornblower, says : “ The mere signature of such third person on the back of a note, per se, creates no commercial contract whatsoever, though it may subject him to the liabilities of a second indorser, if the payee thinks proper to indorse it also, and put it in circulation, and the note should get into the hands of an innocent bona fide holder.” It seems from the evidence that the defendant refused to assume the liabilities of a maker or surety, but agreed to, and did indorse the note.
Unless proof then was offered of a different undertaking, he must be considered a second indorser. From the record then, we are forced to the conclusion that the plaintiffs cannot main*336tain their action against defendant on the three special counts, nor can the action be maintained on the common counts.
The defendant does not stand in that character on the paper which will permit a recovery in the name of the plaintiffs.
If the plaintiff had indorsed the note and put it into circulation, a subsequent indorsee could recover against the defendant. The undertaking of the defendant was, to pay the note to a subsequent indorsed, in case of the failure • of the maker. The plaintiffs would not be liable to defendant on their indorsement, and could indorse the paper without recourse, so as to be liable to no subsequent indorsees.
The- instructions of .the court below as to demand and notice were erroneous.
Judgment reversed.