Court Opinion

ID: 7195494
Source: CourtListenerOpinion
Date Created: 2022-07-24 17:02:15.686206+00
Date Added: 2024-06-11T16:16:19.197641
License: Public Domain

On Application foe. Rehearing.
Watkins, J.
The importance of the questions involved and the earnestness with which the application has been presented have induced us to re-examine the case.
Counsel do not, however, seem to be in agreement as to «the character of the questioned contract of the defendants — one presenting the theory that, notwithstanding averment is made in the petition that their contract is one of indorsement, yet they are entitled to take judgment against them as principal debtors, on the proof in the record, admitted without objection; whilst that presented by other counsel is that, in truth, they are either sureties in solido, or solidary obligors, and bound primarily.
In addition to the foregoing the point is made and insisted upon that the inter venors are merely ordinary litigants, tendering issues of fact for trial, which they are bound to establish, and failing to do so, are not entitled to recover.
The case before us is a controversy between the plaintiffs as first attaching creditors of B. Feibelman & Co., defendants, and the intervenors as second attaching creditors of the same property — the latter claiming the right to prime the former in the distribution of the proceeds thereof, after the defendants’ absolute indebtedness has been satisfied therefrom.
It is error to insist thatlintervenors seek to obtain a judgment in this suit .against the defendants. They are only seeking to reduce and restrict the amount of plaintiffs’ judgment against them so as to enable them to realize something out of the property attached.
*523Manifestly, the defendants’ exception and answer can not affect ■their right. All that is necessary in order to entitle a party to intervene in a pending suit between other parties is that his petition shall disclose an interest in the success of either party, or an interest opposed to both parties. O. P. 390.
The proposition on which the intervenors mainly depend is that the plaintiffs’ demand, to the extent of $22,500, is based upon indorsements of B. Feibelman & Oo. upon the notes of Cohn & Feibelman, drawn to their own order, and by them indorsed and made payable at a future date and not due at date of suit; and that, on ¡such indorsements no attachment will lie; because the obligation of an indorser is conditional only, and can not become absolute until the maker is in default for non-payment, and due presentment, protest and notice have been made.
In the assertion and maintenance of such a proposition, intervenors certainly had an interest, and, in support of such plea, it was only necessary that they should allege and prove the existence ■of their attachments, and the character of the defendants’ contract. The assertion of their interest does not depend at all upon the validity of intervenors’ claim against the defendants, for that is not an issue in this case.
Defendants objected to the introduction of evidence tending to establish them. The real object of their demand is to diminish the plaintiffs’ claim against the defendants, .so that the extent of their privilege on the property attached might be correspondingly reduced. In order that this object be accomplished it became necessary that the claims of the intervenors should be presented “to the court by whose mandate the property was first seized,” so that it should “proceed to class the privileges * * according to their rank * * in a summary manner,” etc. R. S., Sec. 2903.
From the record- it appears that the three notes in controversy are each for the sum of $7500, drawn by Cohn & Feibelman as makers, payable to their own order at the Importers and Traders National Bank of New York, and by them indorsed in blank. They matured respectively on the 27th of November and December 12, 1890, and 10th of January, 1891, and suit was filed and service made on the 1st of December, 1890 — the very date on which the first note went -to maturity.
Upon each of those notes the name of B. Feibelman & Co. is in*524dorsed in blank, immediately underneath that of C.ohn & Feibelman,, without any accompanying explanatory statement.
On the same date, and contemporaneously with the service of citation, a protest of said note was made, and due notice given to both makers and indorsers, the evident purpose thereof being to fix the liability of the defendants.
Viewing defendants’ contract as one of indorsement, pure and simple,, this protest, made as it was in the city of New Orleans, was altogether unavailing, because the note was payable at a bank, in New York, and could not be presented for payment elsewhere.
It is a familiar principle, that the indorser’s “ undertaking is not general, but conditional upon due diligence being used against the principal debtor, and such diligence requires presentment at the place specified, where it is presumed that funds have been provided to meet the bill at maturity.” 1 Dan. Neg. Ins., Sec. 644, 3d ed.
Inasmuch, as this protest was insufficient to place liability upon defendants, the three notes occupy very much the same position in this case — the defendants having become exonerated from the payment of the first, and their liability on the other two not having become absolute at date of suit.
The controversy is thus narrowed to the single question, whether B. Feibelman & Oo. were really, as matter of law, sureties of the makers, notwithstanding plaintiffs’ averment that they are indorsers.
This court has frequently held the law to be well settled in this. State, that one not a party to a bill or note who puts his name upon it is presumed to have done so as surety; and that, in such case his obligation will not be that of an indorser under the principles of the commercial law. 4 M. 639; 3 N. S. 659; 10 La. 374; 14 La. 386; 4 R. 161; 1 An. 248; 2 An. 592; 4 An. 273; 9 An. 533; 14 An. 144; 12 An. 517; 20 An. 348; 21 An. 25; 22 An. 41; 24 An. 468.
This rule is well recognized by text writers. Story on Prom. Notes passim; Ohitty on Bills, p. 435; 1 Parson on Notes and Bills, 521, et seq.
But it is just as well settled that the foregoing rule is exclusively applicable to bills or notes payable to order, and which are subsequently indorsed by one not, originally, party thereto — the real purpose and object of an indorsement being to transfer the property in a bill or note and to effect a legal delivery thereof to the indorsee,.
From this settled principle it follows that it has no application to; *525such notes as those in controversy, same being payable to bearer and not to order; for Mr. Daniel has justly observed of the proposition under consideration, to-wit:
“If the note be payable to bearer, either in terms, or becomes so In effect, by being made payable to the maker’s order, and then being indorsed by him, in either case the party who places his name on the back of it will be deemed an indorser, only.” 1 Dan. Neg. Ins., p. 635, Sec. 707a, 3d ed.
The author cites in support of this proposition the very clear and pertinent opinion of the Massachusetts court as expressed in Bigelow vs. Colton, 13 Gray, 309, to the effect that in case the note is payable to and indorsed by the maker “ it does not fall within that anomalous class of cases where a third person, neither maker nor payee, puts his name on the back of anote before its indorsement by the payee; but is the ordinary case of an indorsment of a note payable to bearer, the effect of which can not be varied or controlled by jparol proof.”
We have no hesitation in accepting this interpretation of the principles of the law merchant, and they are especially applicable to this case.
Applying them to the contract in question there is not a doubt in our minds that it was one of indorsement pure and simple, and not of suretyship or unconditional obligation.
Nor, in our opinion, does it matter, materially, that certain parol proof was introduced in reference to the disposition that was made of the proceeds of the discounted paper and without objection on the part of intervenors.
The evidence referred to is as follows, viz.:
“ Q. Is the firm of B. Eeibelman & Co. and Cohn & Peibelman practically one concern?
“ A. Yes, sir, except with different partners. I had most of the money in both of them.
“ Q. What was dons with the proceeds of these notes?
“ A. It was first handed to Cohn & Peibelman and then paid to me. I paid B. Peibelman & Co.’s accounts with it and continued •our business.
“ Q. The three notes of $7500, you mean?
“ A. Yes, sir.
*526“ Q. The proceeds of these notes were used, then, for the payment of debts created for the benefit of B. Feibelman & Co.?
“ A. Yes, sir.”
It shows that Cohn & Feibelman really discounted the paper, it may be for the benefit of the defendants; but that can make no possible difference, as, presumably, every indorser receives a consideration for his signature.
It shows, further, that if Cohn & Feibelman did discount their own paper, it was apparently indorsed by the defendants at the time, and the money was expended for their benefit.
Evidently, when interpreted in the light of this evidence, the undertaking of the defendants was conditional and not absolute.
A careful investigation of the law and evidence, and a comparison, of our opinion made therewith, have served to confirm us in the correctness of our opinion, and, therefore, a rehearing is refused.