61 N.J.L. 428 | N.J. | 1898
The opinion of the court was delivered by
The transaction shown by the testimony in the Court of Common Pleas was as follows: The plaintiff’s agent, Foley (the defendant), and one Kelly orally agreed together, on September 4th, 1895, that the plaintiff should lend Kelly $250, for which Kelly should give the plaintiff his
It seems proper, in dealing with this controversy, first to consider the effect of the writing, irrespective of the oral agreement.
At the time when the defendant placed his name upon the back of the instrument and it was delivered to the plaintiff, the writing had no legal validity, and hence it was not a negotiable promissory note owned by the payee and by him transferred by endorsement to a third party. Its legal validity came into existence only when, on the strength of it, the plaintiff advanced the $250 to Kelly. The signature of the defendant therefore lacked this ingredient of a strict endorsement under the law merchant. Nevertheless, it seems that the defendant must be regarded as a commercial endorser. Smith v. Becket, 13 East 187; Field v. Nicherson, 13 Mass. 131; Merritt v. Todd, 23 N. Y. 28; Jones v. Jenkintown National Bank, 13 Atl. Rep. 84; Perry v. Green, 4 Harr. 61; Johnson v. Ramsey, 14 Vroom 279. Consequently, his obligation to pay, as evidenced by his endorsement, was conditioned upon due demand for payment being first made in accordance with the terms of the note.
The note -was payable “ on demand after date.” In Hitchings v. Edmands, 132 Mass. 338, this expression was deemed equivalent to “on demand;” but in Crim v. Starkweather, 88 N. Y. 340, a distinction was noted, the words “ on demand ”
The circumstances to be considered in determining whether a demand has been made in due time are scarcely suggested by the phrase “ a reasonable time,” but the form of the rule requiring due diligence in the holder indicates what, in Merritt v. Todd, 23 N. Y. 28, Chief Justice Comstock declared to be the true principle, that it is merely the reasonable ability of the holder which can be considered, excluding any notion of credit or indulgence to the maker.
On this principle it is manifest that due demand of this note was not made. There is not the slightest evidence of any reason, outside of indulgence to the maker, for postponing the demand from September 5th, 1895, until June 10th, 1896. It, therefore, is manifest that, unless the rights of the defendant as endorser can be affected by his oral agreement made before he signed his name, he cannot be held to pay the note.
In Field v. Nickerson, 13 Mass. 131, the opinion seems to favor the view that a contemporaneous understanding between endorser'and endorsee that demand should be deferred, would bind the endorser, and in Sice v. Cunningham, 1 Cow. 397, it is said that proof of the endorser’s assent to such an arrangement would undoubtedly preclude him from availing himself of the defence, that demand had not been made as by the mere terms of the note it ought to have been. To the same effect is Jones v. Jenkintown National Bank, 13 Atl. Rep.
In view of these decisions we must conclude that the present defendant’s right to be discharged, because of the plaintiff’s failure to demand payment of the note before June 10th, 1896, could not be impaired by the parol evidence of his contemporaneous agreement for the indulgence of the maker.
It follows that the judgment of the Common Pleas in favor of the plaintiff should be reversed.