29 Ind. App. 207 | Ind. Ct. App. | 1902
This action was commenced by appellant against the makers of three several promissory notes and against appellee as indorser of the notes sued on. Appellee’s demurrer to the complaint was sustained, and, appellant rer fusing to plead further, judgment was rendered in favor of appellee. The question presented by the action of the trial court in sustaining the demurrer to the complaint is the only question here for consideration.
The complaint alleges that on the 20th day of August, 1890, Joseph W. Frank, William B., and Mary Corl exe
In the case of Glidden v. Henry, 104 Ind. 278, 54 Am. Rep. 316, the Supreme Court of this State first held that a note which, by its terms, permitted the holder to extend its time of payment, although payable in a bank of this State, was not commercial paper and negotiable as an inland bill of exchange, but was subject to all defenses that the maker or indorser might have against the holder. To the same effect, see, also, Oyler v. McMurray, 7 Ind. App. 645; Merchants, etc., Bank v. Fraze, 9 Ind. App. 161, 53 Am. St. 341; Clark v. Trueblood, 16 Ind. App. 98; Mitchell v. St. Mary, 148 Ind. 111; Woodbury v. Roberts, 59 Iowa 348, 13 N. W. 312, 44 Am. Rep. 685; Smith v. Van Blarcom, 45 Mich. 371, 8 N. W. 90.
The notes in suit not being governed by the law merchant, appellee, by its indorsement and assignment thereof, warranted “the liability and ability of the maker to pay it, and is bound, if due diligence be used by the holder, to make good his warranty of the maker’s ability to pay.” Clark v. Trueblood, supra; Huston v. First Nat. Bank, 85 Ind. 21; Pool v. Anderson, 116 Ind. 88, 1 L. R. A. 712.
In order’ to hold appellee liable, it was the duty of the appellant to use the same diligence that a prudent man would use in collecting his own. debt. Our courts have uniformly held that the proper diligence in cases of this
Appellant had full control of the notes. Appellee, by the indorsement, lost all control over them. He could not protect himself in any way by any action he. might take. It is largely for this reason that the law makes it the duty of the holder of the note, if he wishes to make the indorser liable to him upon the indorsement, to use that diligence which a vigilant creditor would ordinarily employ to protect himself from loss where the debt is the bare obligation of the maker. Hoffman v. Bechtel, 52 Pa. St. 190; Thompson v. Campbell, supra.
The complaint shows that suit was not commenced on either of the notes in controversy until several years after the last one of the series became due. The complaint falls far short of showing diligence upon the part of appellant, or excuse for the want of it. But appellant insists that the stipulation in the note which gave him the right to extend the time of payment, without releasing the appellee, takes him without the general rule of diligence as announced by the courts. The rule remains the same. If the privilege of extending the time of payment is exercised by the holder, the note thereby does not become due until the time of the extension has expired. The duty of the holder after the note is due remains the same. If appellant ever extended the time of payment of the notes so that they did not become due
We find no error. Judgment affirmed.