137 Ky. 427 | Ky. Ct. App. | 1910
Opinion of the Court by
— Affirming.
Tliis action was instituted in the McCracken circuit court on the 25th day of July, 1908, by the appellant, Mechanics’ & Farmers’ Savings Bank, the plaintiff below, on a certain promissory note executed by John U. Rinkliffe to the order of appellee, F. W. Katterjohn, bearing date of August 19, 1907, due 60 days after date, for the sum of $800, and which was indorsed by F. W. Katterjohn, and also by Thompson-Wilson & Co., a corporation. The defendant, Rinkliffe, made no defense, and judgment was rendered against him by default. Appellee, Katterjohn, defended on the ground that he was simply an accommodation indorser for Rinkliffe, and that he was discharged from liability by reason of the fact that the note was not presented for payment, and he received no notice of dishonor. Appellant, by amended petition, pleaded a waiver by Katterjohn of presentment and notice. The evidence was heard on' the 11th day of February, 1908, and submitted to the court without a jury. The court, being unable to arrive at a satisfactory conclusion, continued the case
It is the contention of •appellant (1) that where a payee in a negotiable promissory note becomes an accommodation indorser for the maker, he is a mere surety, and primarily liable on the instrument, and therefore not entitled to notice; and (2) that there was sufficient evidence on the question of waiver of presentment and notice to justify the submission of the case to the jury.
At the outset, we may say that the note in question fulfills all requirements of a negotiable instrument: First, it is in writing and «signed by the maker; second, it contains an unconditional promise or order to pay a sum certain in inoney; third, it is payable at a fixed or determinable future time; fourth, it is payable to the order of a specified person. The note under consideration not only contains the above requirements of a negotiable instrument, but it was actually negotiated by appellant. After it was indorsed by appellee, Katterjohn, Rinkiiffe took the note to the bank, discounted it, and obtained the proceeds. That being the case, no question has been raised, nor could any be raised, as to the negotiable character of the instrument.
The evidence is as follows: J. T. Laurie,' cashier of the appellant bank, testified that the note was discounted in the regular course of business by Rinklifife, who received the proceeds. In reply to the ques-
Passing the question whether or not appellee was entitled to presentment and whether or not presentment was duly made, we shall consider only two questions: (1) Was appellee, as accommodation indorser, entitled to notice of dishonor? (2) If so, did he waive that requirement?
It is insisted by appellant that, under the rule laid down by this court in the case of Hunt v. Arm
With this view of the act in mind, let us examine certain of its provisions. Section 63 is as follows: “A person placing his signature upon an instrument otherwise than as maker, drawer ' or acceptor, is deemed to be an indorser, unless he clearly indicates by appropriate words his intention to be bound in some other capacity.” Section 89 is 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, and any drawer or indorser to whom such notice is not given is discharged.” Appellee, Katterjohn, did not place his name on the instrument in question otherwise than as maker, drawer, or acceptor; nor did he clearly indicate by appropriate words his intention to be bound in some other capacity. Therefore, by the express? provisions of section 63, he became bound as indorser to the holder of the note. As said before, Rinldiffe, the maker of the note, discounted it and received the proceeds. Appellee, Katterjohn, had nothing to do with the negotiation of the note. No portion of the proceeds was paid by the bank to him. It was not executed for' his accommodation. Under such circumstances, he was not primarily liable on the note, but was liable merely as an accommodation indorser. No facts are shown that would bring this case within any of the exceptions to section 89, requiring notice of dishonor to be given to the indorser as set forth in the provisions of the negotiable intruments act.
Our conclusion, then, is that appellee, Katterjohn, was released from all liability by reason of appellant’s failure to give him notice of dishonor, unless his alleged promise to renew the note was sufficient to constitute a waiver of such notice. Prior to the adoption of the new negotiable instruments act the rule in Kentucky was that, when mere accommodation drawers or indorsers had been released by failure to give notice, their liability was not revived by verbal promises to pay, subsequently made, unless such promises were based upon a new consideration. This rule, however, was contrary to the general doctrine upon the subject. A majority of the courts held that if an indorser, with full notice of the fact that no demand had been made or notice given, made a subsequent promise to pay, he was liable, and could not when sued, set up as a defense the want of such demand and notice. Sigerson v. Mathews, 20 How. 496, 15 L. Ed. 989; Daniel’s Negotiable Instruments, §§ 1147-1.168. Section 109 of the negotiable instruments act provides: “Notice of dishonor may be waived, either before the time of giving notice has arrived, or after the omission to give due notice, and the waiver may be express or implied.” We think it apparent that the purpose of the foregoing provision was to put in force in this state the rule that had theretofore been adopted by a majority of the states. Under this section notice of dishonor may be waived, either before or after the notice is due; and such waiver may be express or implied. Did the mere promise of appellee, after he was discharged by reason of want of notice constitute a waiver of notice? As to what will constitute a waiver, the doctrine is
In the case before us, appellee did not make a promise to pay; he did not acknowledge his liability on the note. His promise to renew was not an admission of liability, for he may have been willing to renew, and not to pay. We are therefore of opinion that the promise to renew was not sufficient to establish appellee’s liability after it had ceased for want of notice. That being the case, the evidence of waiver of notice was not sufficient to justify the submission of the case to the jury.
Judgment affirmed.