29 Ohio C.C. (n.s.) 561 | Ohio Ct. App. | 1918
The parties stood in reverse order in the court below and for convenience we will refer to them here in that order.
The plaintiff filed his suit as executor and trus- . tee of the last will and testament of William G. Amor, deceased, against one Holberger and his wife as makers, and The Elworthy-Helwick Company as endorser, of a certain note for the sum of $1,600, dated at Cleveland, Ohio, April 8, 1912, with interest at the rate of six per cent.', payable semiannually on the 15th day of June and December of each year. Said note provided that the makers thereof should pay each and every calendar month from and after date, a sum of not
The petition contained two causes of action, one in the usual form on a promissory note, by which plaintiff claimed judgment against the makers and against The Elworthy-Helwick Company as 'endorser; in the other the plaintiff sought to foreclose a mortgage given as security for the payment of said promissory note.
To the petition of the plaintiff The Elworthy-Helwick Company filed an answer containing two ■defenses, which are substantially as follows: First, 'that the Holbergers failed to make the monthly payments called for in the note from the month of June, 1912, to the 11th day of September, 1914, except a payment of one hundred dollars in December, 1912, and a payment of thirty dollars in July, 1914; and that the plaintiff failed to present the note.for payment as the other installments came due, and failed to notify said The Elworthy-Helwick Company, the endorser, of the dishonor of said installments as they fell due, until about the 11th day of September, 1914, for which reason the endorser claims it is no't liable for any of the unpaid installments which fell due prior to said September 11, 1914,” and alleges that if it is liable for anything it is only liable for the sum of the installments falling due after said date. This is termed a “partial defense.” Second, that the plain
The plaintiff filed á general demurrer to both defenses, which was sustained, and the defendant endorser not desiring to plead further judgment was rendered against it as such endorser for the sum of $1,939.25, being the full amount of the unpaid 'balance on said note, including the unpaid installments falling due before September 11, 1914. Error is now prosecuted in this court to reverse said judgment on the ground that the court erred in sustaining said demurrer.
The chief contention, however, now made by the defendant endorser is as to the sufficiency of its first or partial defense. This defense presents the question as to when a note is dishonored which contains a provision for payment by installments, with a further condition that upon the failure to pay two or more installments the whole unpaid balance due on said note shall become due and payable at the option of the holder. It seems to be conceded by both parties that when a .note is dishonored 'by nonpayment, notice thereof is necessary to hold the endorser. It is contended by the plaintiff that the note in question must be regarded as an entirety, and that as an instrument for the payment of money it did not become due and payable until the holder exercised his option to declaré
Attention is directed by both plaintiff and defendant to the provisions of Section 8194, General Code, being Section 89 of the Negotiable Instruments Act, which provides as follows:
“Except as herein otherwise provided, when a negotiable instrument 'has been dishonored by nonacceptance or nonpayment, notice of dishonor must be given to the drawer and to each indorser. Any drawer or indorser to whom such notice is not given is discharged.”
This section appears to be the only provision that may be found in the Negotiable Instruments Act reflecting in any way on the question at issue. It must be conceded that this section does not expressly cover a situation like the one under consideration. It does, however, by positive terms, require notice to all drawers or endorsers of the dishonor of the instrument by nonpayment or nonacceptance in order t'o hold them liable thereon. The ¡necessity of noticé, therefore, obtains in all cases save those named in the exception's, which exceptions have no application to the instant case. This being so, we are unable to conceive of any
“If a note be payable in instalments, the presentment should be made on each consecutive instalment as it falls due, as if it were (as in fact it is legally considered) a separate note in itself.”
In 8 CyC., page 961, it is said:
“If commercial paper is payable in instalments demand of each instalment must be made to preserve the liability of the endorser.”
Many other authorities might be cited in support of the common-law rule, but, as before observed, they may not be considered here, for it is now definitely settled that the Negotiable Instruments Act in this state is ■ exclusive as to all matters actually provided for therein. Elyria Savings & Banking Co. v. Walker Bin Co., 92 Ohio St., 406.
1‘t would seem that the question presented here would be one of frequent occurrence, but we have not been cited to a case in which it appears to have been presented, nor have we been able by our own investigations to find any adjudication of the precise question here under consideration. In the case of Hopkins v. Merrill, 79 Conn., 626, an action was brought against the endorser of a promissory note, payable in monthly installments, to recover the amount due on three of such installments, due notice of the nonpayment of which had
We conclude, therefore, that under favor of said Section 8194, supra, the defendant endorser in the instant case was entitled to notice of the nonpayment of the installments falling due between the dates named in its answer, and that by reason of the failure of the plaintiff to give such notice the 'defendant company endorser is discharged from any liability as to such installments.
We affirm the judgment of the lower court in its ruling on the demurrer to the second defense. Section 8225, General Code.
Judgment reversed and cause remanded for further proceedings according to law.
Judgment reversed, an'd cause remanded.