67 Ind. App. 47 | Ind. Ct. App. | 1916
This is a suit on a note by appellee First State Bank against appellee Matchett and appellant Hubbard, in which the bank obtained judgment for $2,200 and costs against both defendants, and in which appellee Matchett obtained judgment on his cross-complaint against appellant, ordering the property of the latter levied upon and sold to satisfy the judgment before levying upon the property of the cross-complainant.
The complaint is in three paragraphs and there were numerous other pleadings in the case.
Appellant has assigned as error the overruling of his separate demurrer to each paragraph of the complaint; the sustaining of the separate demurrer of appellee, the First State Bank of Bourbon, Indiana, to the sixth, seventh and ninth paragraphs of appellant’s answer to the first paragraph of complaint; the sustaining of said appellee’s demurrer to the six
Omitting formal averments, the first paragraph of complaint alleges in substance that on March 1, 1909, the Winona Technical Institute and appellant Hub-hard, by their promissory note, promised to pay to , James H. Matchett, three years from that date, the sum of $2,000 with interest and attorney’s fees, a copy of which note is made a part of the complaint as exhibit A; that before its maturity Matchett by indorsement on the note transferred and assigned the same to the First State Bank of Bourbon, Indiana, as follows, to wit: “For value received I hereby assign this note to First State Bank (signed) James H. Matchett.” That appellant executed said note as surety by indorsing his name on the back thereof; that by reason of the mutual mistake of the parties and the scrivener who wrote the note, the date and name of the payee were left blank; that said note was delivered to said Matchett who was intended to be and in fact was the payee.
“Exhibit A
“$2,000.00 Indianapolis, Ind.,........190.. “Three years after date, we promise to pay to the order of ................ two thousand dollars, with interest at........per cent, per annum from................until paid, and ten per cent, attorney’s fees. Negotiable and payable at the Union National Bank, Indianapolis, Indiana. Value received without any relief'whatever from valuation or appraisement laws. The drawers and endorsers severally waive present*51 ment, protest, and notice of protest and non-payment of this note.
“The Winona Technical Institute,
“By S. C. Dickey, President.
“Due ................
“ Endorsements:
Wm. II. Huhhard.” -
The gist of the second paragraph of complaint is’ - that on February • 20, 1909, the Winona Technical Institute borrowed from James H. Matchett, $2,000, and executed to him therefor its promissory note due in sixty days; that contemporaneously therewith, and to induce the loan of said money, the Winona Technical Institute and appellant Hubbard executed and delivered to said Matchett, as collateral security for said loan, a certain promissory note, particularly described, and being the identical note set out "as exhibit A with the first paragraph of complaint; that said principal note for $2,000, due in sixty days, was renewed from time to time by the Winona Technical Institute, until on December 17, 1909, a final renewal note for $2,000, due in sixty days, was executed by it; that before.the maturity thereof, and before the maturity of said collateral note, said Matchett for value received sold and assigned both of'said notes to appellee First State Bank, and duly assigned said collateral note to it by indorsement on the back thereof as follows:
£ £ For value received, I hereby assign this note to the First State Bank.
£ £ (Signed) Jame s H. Matchett. ’ ’
That thereafter the Winona Technical Institute became insolvent, and a receiver was appointed who
The third paragraph of complaint is substantially the same as the second, except it is averred therein that the note sued upon was executed by appellant for the accommodation of the Winona Technical Institute to enable it to borrow money upon its own individual note by using said note of appellant as collateral security, and thereafter on February 20, 1909, it borrowed from James H. Matchett, on its individual note, $2,000, and gave the note in suit as collateral security therefor.
The memorandum accompanying the separate demurrer to each paragraph of the complaint alleged that neither paragraph states facts sufficient to constitute a cause of action against appellant, because: (1) The note su’ed on fails to show the date of its execution; (2) it fails to show when it is payable; (3) it fails to show to whom it is payable; (4) the averments fail to show appellant liable on.the note either as principal, surety ór indorser; (5) the allegations fail to show that due diligence was used by appellee bank to collect said note of the Winona Technical Institute, the principal thereof.
To the first paragraph of complaint appellant filed answer in ten paragraphs, the first of which was a general denial. The others, except the sixth, seventh, and ninth, in substance allege that appellee First State Bank is not the real party in interest; that appellee James H. Matchett is the real party in inter
Issues were joined on the affirmative paragraphs of answer and appellant also filed a cross-complaint, in which he sought to have the note sued on adjudged paid and satisfied, and he also asked an order directing the holder thereof to deliver the same to him, and that appellee Matchett be enjoined from transferring the same. Appellee Matchett also filed a cross-complaint against appellant, in which he sought to have any judgment rendered upon the note in suit direct that the property of Winona Technical Institute and of appellant be first levied upon and exhausted before such judgment be enforced against him. Issues were duly joined on all the pleadings, and on due request the court made a special finding of facts and stated its conclusions of law thereon.
The court found the facts to be substantially as alleged in the complaint, and we therefore set out only such portions of the finding as deal with' questions that were in any way controverted at the trial. The finding shows the execution of the note in the form above set out on January 20, 1909; that appellant on request of Winona Technical Institute indorsed
The court stated its conclusions of law in substance as follows: (1) The law is with the plaintiff (appellee bank), and it is entitled to recover from James H.
The principal questions arising upon the rulings of the court on the demurrers to the pleadings are identical with those presented by the exceptions to the conclusions of law and the assignment based thereon, and for that reason they will be considered together.
It is not seriously contended that the execution and •delivery of the note in its incomplete form authorized .a bona fide holder thereof to insert the date and fill in the name of the payee in the appropriate blank left therefor in the note, but that, inasmuch as neither the date nor the name of the payee were actually so inserted, appellee bank acquired no right of action by reason of the alleged assignment and transfer of the note to it by. appellee Matchett.
In the absence of averments to show that the holder of such note acquired the same for value and was the owner thereof and the real party in interest in the suit, there is authority, supporting the contention that a suit on such instrument payable otherwise than to bearer, cannot be maintained by the holder thereof, and that in the absence of such special averments proof of the instrument in such form will not support an action by the holder thereof to recover thereon. Greenhow v. Boyle (1843), 7 Blackf. 56; Rich v. Starbuck (1875), 51 Ind. 87, 89, and cases cited; 1 Daniel, Negotiable Instruments (6th ed.) §§ 142, 145.
In such cases the intention of the parties who put the instrument in circulation is the underlying and controlling principle, and when such intention is as-, certained, either from the face of the instrument or by proof of extraneous facts, or from all of such sources, it should be followed, unless it contravenes some rule of law, for by so doing effect will be given to the letter and spirit of our Code, which requires actions to be brought in the name of the real party in interest. Rich v. Starbuck, supra; Moore v. Pendleton (1861), 16 Ind. 481, 483; Ferry v. Jones (1858), 10 Ind. 226; Clark v. Walker (1841), 6 Blackf. 82; Gothrupt v. Williamson (1878), 61 Ind. 599; Wells v. Jackson (1841), 6 Blackf. 40.
Appellant contends that, if liable at all, he is only liable as an indorser and entitled to all the rights and protection the law accords an indorser; that neither the facts pleaded nor found show such diligence on the part of the appellee bank as will establish liability against him.
Therefore we must determine the character of appellant’s liability, if any, on the note under the peculiar facts of this case. "While the facts are some
In Pool v. Anderson, supra, Pool sued Spradling, Neff and Anderson on a nonnegotiablé promissory note. Spradling and Neff signed the note on its face, and Anderson wrote his name across the back before it was delivered to Pool, the payee, who brought the • suit. Anderson demurred to the complaint, and the court sustained the demurrer on the theory that he was liable as an indorser only and the complaint did not show facts sufficient to fix liability against him. Judge Mitchell wrote the opinion of the court, reversing the judgment, and, among other things, said: “The present case involves the liability of a stranger, who signed his name upon the back of a paper not negotiable by the law merchant, before it was delivered to the payee, who held the same when the suit was commenced. The inquiry is, What is the liability or obligation of one who thus signs to the payee? The decisions of different courts present an irreconcilable conflict of views upon the general subject under consideration. It will be noted, however, that the cases in other jurisdictions relate almost exclusively to notes negotiable as inland bills of exchange. Whatever diversity exists in the decided cases, it cannot be doubted that a stranger who writes his
From the foregoing we have reached the conclusion that the court did not err in any of the rulings on the' demurrers to pleadings complained of nor in its conclusions of law stated on the finding of facts. Judgment affirmed.
McNutt, Hottel, Caldwell, Ibach, JJ., and Moran, P. J., concur.
Note. — Reported in 114 N. E. 642. Bills and notes: renewal note as discharge of original, Ann. Cas. 1915A 1084; negotiable note, what constitutes, Ann. Oas. 1912D 4. See under (1) 3 C. J. 1434; (2) 10 Oye 381; (4) 17 Cyc 425.