Eastman v. Turman

California Supreme Court Jul 1, 1864Published

Before: Sawyer

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Holding. The court held that a complaint sufficiently states a cause of action against an indorser when it alleges that a note was presented, payment was demanded, and the note was protested for non-payment, even if the demand included prior installments for which the indorser might no longer be liable.

Issues

Whether there is a misjoinder of parties when an indorser is sued alongside the maker in a foreclosure action.
Whether a cause of action on a note against an indorser and a foreclosure action are improperly joined.
Whether an allegation that a note was 'duly protested for non-payment' is a sufficient averment of demand, refusal, and notice to charge an indorser.
Whether a demand for the full amount of a note, including prior installments, is sufficient to charge an indorser for the final installment.

Disposition. reversed and remanded

Quotations verified verbatim against the opinion

“He is properly made a party, under section fifteen of the Practice Act.”

“There is no misjoiner in this respect. On the contrary, section two hundred and forty-six of the Practice Act provides that there shall be but one action for the recovery of the debt and the enforcement of the right secured by the mortgage.”

“If these words clearly import a refusal, as held in the authorities cited, we do not see why the averment of the complaint is not a sufficient allegation of demand, refusal, and notice of non-payment.”

Synopsis

Action on Note—Parties to.—Where a promissory note and a mortgage to secure the same are executed and delivered to the same person, and the payee of the note and mortgagee indorses the note and assigns the mortgage to a third person, who brings an action on the note and to foreclose the mortgage, it is not a misjoinder of parties defendant to join as defendants the indorser and maker of the note.

Same—Note—Mortgage.—In such case, under the provisions of the Practice Act, it is not an improper joinder of two causes of action to sue the indorser of the note on his liability as such, and to ask a decree against the mortgagor foreclosing the mortgage.

Notice to Indorser.—A notice given to the indorser of a promissory note, made payable at a banking house, which states ft that the note, on the day it matured, was presented for payment at the banking house of (naming the banking house where the same was payable,) and payment thereof demanded, and thereupon the same was duly protested for non-payment,” is a sufficient notice of demand, refusal, and non-payment, to charge the indorser.

Indorser of Note—Payable in Instalments.—Where such note is payable in instalments due at different times, and the demand on the maker is not made until the last instalment falls due, and the demand is made for the whole amount due on the note, including the prior instalments, the demand is good for the purpose of charging the indorser for the last instalment.

By the Court, Sawyer, J. [382]The defendant, Turman, executed in favor of defendant Ely a note for fifteen hundred dollars, payable hi equal instalments on the first day of December, 1860, and the first day of December, 1861, with interest payable quarterly. The note 'was secured by a mortgage. Defendant Ely indorsed the note and assigned the mortgage to plaintiff. This action is brought to recover the amount due, and to foreclose the mortgage. The defendant, Ely, demurred to the complaint. The demurrer having been sustained, and the plaintiff declining to amend, judgment was rendered in favor of Ely: The appeal is from the order sustaining the demurrer, and from the judgment entered thereon.

The first ground of demurrer is, that there is a misjoinder of parties defendant, it not appearing that Ely has any interest in the foreclosure of the mortgage adverse to plaintiff. But he is sued as an indorser, and sought to be held personally liable in that character. He is properly made a party, under section fifteen of the Practice Act.- The second ground is that two causes of action are improperly joined—a cause of action on the note against Ely, as indorser, and a cause of action in equity to foreclose the mortgage. There is no misjoiner in this respect. On the contrary, section two hundred and forty-six of the Practice Act provides that there shall be but one action for the recovery of the debt and the enforcement of the right secured by the mortgage. As to defendant Turman, at least, it would be necessary to demand all the relief to which he was entitled in this action.

The remaining ground of the denmrrer is, that the complaint does not state facts sufficient to constitute a cause of action. The first point under this head is, that the defendant, Ely, does not appear to be liable for the whole amount of the note and interest, for the reason that it does not appear that any demand was made at the time the several instalments of interest, or the first instalment of seven hundred and fifty dollars principal, fell due, or that he had any notice of the dishonor as to these payments. Admitting this to be true, and that he is discharged from liability as to these sums, (and he [383]probably is, if no demand was made, or notice given, as they severally fell due,) still, if the complaint shows a good cause of action as to the last instalment, it is not obnoxious to the demurrer on this ground.

Eastman v. Turman

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