First National Bank v. Falkenhan

Temple, C. This is an appeal by the defendant corporation from that part of the judgment which authorizes judgment against that defendant.

The action is brought upon a promissory note executed by the other defendant to the appellant, and is not negotiable, because it contains a stipulation for an attorney’s fee.

In the complaint the note is set out at length, and it is averred “ that on the thirtieth day of August, 1888, before the maturity of said note, the defendant, the Coronado Beach Company, for a valuable consideration, waived protest in writing thereon, and indorsed said note in blank, and then and there delivered the same to plaintiff.” It also alleges demand and non-payment, but does not aver notice to the indorser.

To this complaint the appellant interposed a general demurrer, which having been overruled, it answered, denying that it waived protest, or that demand had been made on the maker, and averring that no notice of nonpayment by the maker had been given.

The maker answered, alleging that he paid the note in question to the appellant, April 7, 1888, which was prior to the maturity of the note or its assignment to plaintiff.

The court found in regard to the assignment of the note and waiver of protest as charged in the complaint, and that no part of the principal or interest had been paid to plaintiff; and also that the other defendant had paid the appellant the amount due on the note prior to its maturity or assignment.

It is contended by appellant that the complaint does [144]not state a cause of action, and that the demurrer should have been sustained.

This raises two questions: Is one who assigns a nonnegotiable note by writing his name on the back and delivering it to the assignee liable as an indorser? and if so, was appellant entitled to notice of non-payment?

Upon the first question, the authorities are not harmonious, but a review of them will show that ever since the statute of 3 and 4 Anne there has been a disposition to hold one who transfers a non-negotiable promissory note to a responsibility beyond that of an assignor of other choses in action. The rules applicable to negotiable paper have to some extent been applied to such assignments. The first departure seems to have been to hold that such indorser is liable as the maker of a new note, or as the drawer of a new bill, as had been sometimes held as to the indorser of a negotiable promissory note. (Liedy v. Tammany, 9 Watts, 353.) Judge Kennedy, in the above case, quotes Lord Mansfield in Heglin v. Adamson, 2 Burr. 676, to the effect that the indorsement is an order by the indorser upon the maker of the note to pay the amount thereof to the indorsee. This view seems to have been very widely adopted. (Seymour v. Van Slyck, 8 Wend. 404; Dean v. Hall, 17 Wend. 214; Patterson v. Poindexter, 6 Watts & S. 227; Brenzer v. Wightman, 7 Watts & S. 264; and many other cases.)