Eaton v. McMahon

| Wis. | Aug 15, 1877

LyoN, J.

The implied contract of an indorser in blank of a promissory note payable generally, is, that he will pay the note to the holder if the maker fails to do so, provided the note at maturity is duly presented to the maker for payment, and due notice of nonpayment is given to the indorser. Under certain circumstances, however, the failure so to present the note for payment will not release the indorser from lia-' bility, if he have proper notice that the note is unpaid. If, in the exercise of due diligence, tbe bolder is unable to find tbe maker or ascertain bis place of residence, or if tbe maker resides out of tbe state, presentment to bim for payment is excused, and the liability of tbe indorser remains. These principles or rules are elementary, as will appear by reference to all of tbe standard treatises on tbe subject.

In tbe present case, notice of tbe dishonor of tbe note in suit was given to tbe indorser; but tbe case is barren of proof that the plaintiff used any proper diligence to find tbe maker or ascertain bis place of residence, or that be bad removed from tbe state. Tbe plaintiff testified that, about tbe time tbe note became due, tbe defendant told bim be understood tbe maker was in Nebraska; but it does not appear in bis testimony whether this was before or after tbe note became due. Further than this it does not appear that tbe plaintiff made the slightest effort to ascertain where tbe maker was, or the place of bis residence. It was proved that be formerly resided for two years in Manitowoc, and then removed to Milwaukee, and there is no evidence that be ever removed from tbe state. Tbe plaintiff saw bim in Chicago in April, 1875, and learned from bim that he intended to go to Wisconsin or California soon, and tbe defendant understood that be was in Nebraska. He may have gone to California as be intended, or be may have been in Nebraska when tbe note matured, and still have bad a residence in Milwaukee, where effectual presentment for payment might have been made in bis absence. If tbe maker removed from tbe state before tbe note matured, that excused presentment of tbe note for payment; but tbe burden was upon the plaintiff to prove the fact. lie failed to prove it, and also failed to show proper diligence to ascertain tbe residence of tbe maker. Hence tbe plaintiff did not bring himself within tbe rule which excuses presentment of the note to tbe maker for payment, and tbe motion for a nonsuit ought to have been granted.

II. On tbe question of tbe admissibility of testimony to prove a parol agreement between the parties, when the note was indorsed, that the indorsement should be without recourse, it is sufficient to say that we held in the late case of Charles v. Denis [ante, p. 56], that such testimony is not admissible. That case was decided in the absence of the chief justice, but he fulfy concurs in the conclusion which the majority of the members of the court there reached. It was error, therefore, to admit such testimony; but, for reasons already given, the error was harmless. Had the testimony been excluded, the result must have been the same.

It was said by Judge Irwin, in Murdock v. Arndt, 1 Pin., 70" court="Wis." date_filed="1839-07-15" href="https://app.midpage.ai/document/murdock-v-arndt-6596139?utm_source=webapp" opinion_id="6596139">1 Pin., 70, that, as between the indorsee and indorser, such evidence is admissible. But the controversy was not between the in-dorsee and his immediate indorser, but’between the latter and one who took a transfer of the note from the former without notice of the alleged parol agreement; and the indorser was held liable. The remark of the judge was unnecessary to the decision of the case, and seems to have been made without much consideration. It is not binding as authority, and we cannot adopt it as sound doctrine, because it violates a fundamental principle in the law of evidence.

By the Ooxvrt. — Judgment affirmed.