Jones v. Goodwin

Temple, J., delivered the opinion of the Court t

The defendant, Wilcox, signed his name in blank upon the back of the note and before the delivery of the same. After the note became due, but too late to charge Wilcox; as indorser, demand was made for payment, and upon its refusal, notice given to Wilcox. It is claimed that the failure to make demand and give notice in time discharged defendant, Wilcox.

A great diversity of opinion exists as to the nature of the liability of one not being a party who indorses his name in blank upon a note before delivery. In England he is held [494]to be a guarantor, and his contract is, that the maker of the note.will - pay at maturity, or, if he does not, the guarantor will. No demand or notice in considered necessary as a condition precedent to fixing the liability of the guarantor, or to the commencement of the action; but a failure to make demand and give notice, together with proof of injury, is pro tanto a defense.

In some States, as in Massachusetts, Vermont and Louisiana,, he is regarded as a surety or joint maker of the note, and unconditionally liable. In some States he is held to be a guarantor, and various effects have been given in these States to' the contract of guarantee, sometimes being held to be conditional; at other times absolute; and very frequently parol evidence is admitted to explain what the contract really was. In other States, as in New York, Tennessee, Iowa, and we may add, California, he is held as indorser.

So far back as 1852 the Supreme Court of this State, in Riggs v. Waldo (2 Cal. 487), held that the liability of a guarantor, under such circumstances, was that of an indorser. ; and this case has been affirmed by numerous subsequent decisions. The respondent, however, claims that in these cases no demand and notice whatever had been made or given, and therefore it was only necessary to hold that demand and notice are necessary to fix the liability of a guarantor. We think, however, this is not a proper construction of the decisions. In Riggs v. Waldo the question was as to the nature of the liability of one who, not being a party to a note, indorses his name in blank before delivery; and it was held that “his undertaking is attended with all the liability and all the rights of an indorser stricti juris." It was held that demand and notice were necessary, because his liability was that of an indorser; otherwise no demand and notice would be necessary to fix the liability, nor could they become material except upon the question of diligence where loss has been sustained.