213 Pa. 456 | Pa. | 1906
Opinion by
Jacob P. Nill, the defendant, became an accommodation indorser on a promissory note, dated July 1, 1902, for $5,000 which was signed by Homer H. Swaney as maker and was payable to Nill’s order at the Burgettstown National Bank. The note recited that the maker had deposited therewith as collateral security to the holder, six one thousand dollar bonds of the Pacific Steel Company of the market value of $6,000, with the right, on certain contingencies, in the holder of the note to call for additional security and to sell the security without notice on failure of the maker to pay the note or furnish additional collateral when required. The note was indorsed in blank by Nill, and Swaney had it. discounted by the Burgettstown National Bank,
This action was brought January 17, 1905, against JSTill to recover the debt and interest due on the note and the residue of the costs accruing on the sale of the stock as authorized by the note. The defendant filed an affidavit of defense, the material part of which is as follows : “ that of the failure of the said Swaney to pay said note affiant had no notice until some time about March or April, 1904, when a man unknown to affiant, but who represented himself as A. PL Kerr, cashier of the plaintiff bank in this case, came to affiant’s place of business in the city of McKeesport and induced affiant to waive protest or demand of payment of said note, by a writing on the back thereof, the said person so representing himself declaring to affiant that the note in the form in which it then was, not having been protested and no notice of dishonor having been given to affiant or demand made upon affiant for the payment thereof, was objected to by the bank examiner, and that the plaintiff relied upon the maker thereof and the collateral security held by them for payment thereof; that for such waiver of protest or demand of payment signed by affiant there was no consideration given, and that any forbearance on the part of plaintiff to Homer H. Swaney, maker of said note, was not given at the request of affiant, but without affiant's knowledge, as affiant believed the note on which suit is brought in this case was paid, until informed to the contrary by the person aforesaid, who represented himself as A. H. Kerr, as aforesaid.”
The plaintiff took a rule for judgment for want of a sufficient affidavit of defense which the court made absolute and judgment was entered against the defendant. He has taken this appeal and, as stated in his printed brief, “ the sole question is, did the waiver of protest made eighteen months after
We think this question must be answered in the affirmative and that, therefore, there was no error in making’ the rule absolute and entering judgment against the defendant. There is a clear admission in the affidavit that the defendant knew the laches of the plaintiff before he signed the waiver of protest. The plaintiff’s cashier called on the defendant in March or April, 1904, and secured his signature to the writing on the back of the note waiving protest. Until that time, the defendant says he had no notice that Swaney, the maker, had not paid the note. He was then told, as averred in the affidavit, “ that the note in the form in which it then was, not having been protested and no notice of dishonor having been given to affiant or demand made upon affiant for the payment thereof was objected to by the bank examiner.” The defendant therefore knew before he signed the waiver of protest that no demand for payment had been made and that no notice of the dishonor of the note had been given him as the indorser. Hence he had full knowledge of the laches of th.e holder of the note when he waived protest of the instrument. Under these facts, which are disclosed by the affidavit of defense, the defendant could waive the laches of the holder in making demand for payment and in giving notice of the dishonor of the note : 4 Am. & Eng. Ency. of Law (2d ed.), 458 ; Day v. Ridgway, 17 Pa. 303; Annville National Bank v. Kettering, 106 Pa. 531. “An indorser is entitled to notice of protest of a negotiable note,” says Mr. Justice Coulter in delivering the opinion in Day v. Ridgway, “ because the contract is that the maker will pay at maturity; and the strict punctuality, which is the life of the commercial law, authorizes the indorser to presume that he has paid, in the absence of any notice to the contrary. But the right to receive notice in order to make him liable, like any other right, may be waived by the indorser.” In the Kettering case, Sterrett, J., delivering the opinion says (p. 533) : “ No principle of the law merchant is better settled than that demand and notice of the nonpayment of a negotiable note may be waived by the indorser, either orally or in writing, or
The indorser may waive protest after the date of maturity of the note with like effect as if done prior to that date : Barclay v. Weaver, 19 Pa. 396; Hoadley v. Bliss, 9 Ga. 303; Sheldon v. Horton (N. Y.), 3 Am. Rep. 669; Ross v. Hurd (N. Y.), 27 Am. Rep. 1; Rindge v. Kimball, 124 Mass. 209; 1 Parsons on Notes and Bills, 594; 2 Randolph on Commercial Paper, sec. 1456. In Barclay v. Weaver, this court said (p. 401): “ It seems, therefore, that the duty of demand and notice, in order to hold an indorser, is not a part of the contract, but a step in the legal remedy, that may be waived at any time in accordance with the maxim quilibet potest renunciare juri pro se introducto.” In some jurisdictions it is held that the waiver when made after the maturity of the note must be with full knowledge of the indorser’s laches and that it requires a new consideration. But it is settled by numerous American authorities that a waiver of protest need not be supported by a new consideration: Neal v. Wood, 23 Ind. 523; Hughes v. Bowen, 15 Iowa, 446; Cheshire v. Taylor, 29 Iowa, 492; Sheldon v. Horton (N. Y.), 3 Am. Rep. 669 ; Tebbetts v. Dowd, 23 Wend. 379; Wall v. Bry, 1 La. Ann. 312; Lane v. Steward, 20 Me. 98. We know of no decision of this court holding that such waiver must be supported by a new consideration. The contrary rule, however, is distinctly recognized in Barclay v. Weaver, 19 Pa. 396. In that case Mr. Justice Lowbie, in construing the contract of an indorser of negotiable paper, says (p. 400) : “ Tbe most, therefore, that can be said of an indorsement of negotiable paper is, that from it there is implied a contract to pay, on condition of the usual demand and notice; and that this implication is liable to be changed on the appearance of circumstances inconsistent with it, whether those circumstances be shown orally or in writing. But it may well be questioned whether the condition of demand and notice is truly part of the contract, or only a step in the legal remedy upon it. If it is part of the contract, how can it be effectually dispensed with without a new contract for a sufficient consideration, especially after the maturity of the note? Yet there are
There is no merit in the suggestion of appellant that the Avaiver of protest was induced or secured by the representation of the plaintiff’s cashier that the bank relied for payment of the note upon the maker and the collateral security held by it. If the defendant intended to make such an averment in his affidavit, he signally failed. A declaration to. that effect, the affidavit avers, was made, but the affidavit does not state that it induced the defendant to sign the Avaiver of protest. If the defendant desired to invalidate his waiver of protest on the ground that it was procured by fraud, he was required to aver the fact clearly and explicitly in his affidavit of defense and not leave it to be inferred by the statements in the affidavit. What is not directly and explicitly averred in an affidavit of defense will be taken as not existing and, hence, as insufficient to prevent judgment.
The assignments of error are overruled and the judgment of the court below is affirmed.