92 Tenn. 6 | Tenn. | 1893
The Lookout Mountain Hotel Company executed to the Morrison Lumber Company a note, in words and figures as follows:
“$524.25. Chattanooga, Tenn., Nov. 12, 1890.
“Ninety days after date we jointly and severally promise to pay to the order of Morrison Lumber Company, of Chattanooga, five hundred and twenty-four T2j5ff dollars, at Eirst National Bank, Chattanooga, Tenn. Value received.
“If suit is brought upon this note, we agree to pay five per cent, attorney’s fees, and - costs of collection.
“ (Signed) Lookout Mountain Hotel Co.,
“By II. Whiteside, Pres’t.
(Indorsed on back:)
“ MoRRIson Lumber Co., R. Morrison, Pres’t.
“ E. Watkins. '
“ II. Whiteside.”
Hpon the face of this note, the defendants, Watkins and Whiteside, are but second indorsers, and the complainant is the payee and first in-dorser. Prima facie, a second indorser is not lia-.blo to a payee, who appears on the paper as first indorser. To enable such a payee to recover against ’defendants — appearing to be only subsequent indorsers — there should be some averment of facts sufficient in law to constitute them either joint makers or guarantors. Randolph, Com. Paper, Sec. 844.
From the evidence of Mr. Morrison, the only witness who speaks at all as ’to the circumstances under which these7 indorsements were made, it appears that the note sued on is a second renewal •note. The first note was signed by the Lookout" Hotel Company alone, and was given in settlement of an account for lumber. This original note was indorsed by the payee, and discounted in the First National Bank of Chattanooga. When it fell due it was not paid, hut renewed by substituting another note, executed by same maker, and indorsed by the present, defendants, Watkins and Whiteside. This renewal note was not paid, the personal note being executed and placed with the discounting hank in lieu of the past-due note.
The rule in this State, as now settled, in regard to irregular indorsements is that, as between the pai’ties to such paper, parol evidence may be received to show the circumstances under which 'such indorsement was made; and from all the facts and ' circumstances surrounding the indorsement, the Court will give to such contract that interpretation and effect which will carry out the just intent and understanding of the parties. In the absence of any evidence as to the circum- ’ stances, the contract must rest upon the presumption arising as matter of law from the attitude of the names upon the. paper. Harding v. Waters, supra; Good v. Martin, 95 U. S., 90; Rey v. Simpson, 22 How., 341.
The facts and circumstances shown in . evidence in this case are aggravatingly meager. The only witness who undertakes to speak upon this question at all omits, much that would have thrown light upon the intent and understanding as to these indorsements. This much is clear: The payee in the original note had indorsed it to the dis
ISTow, were these indorsements upon either of these renewal notes made on request of the maker? If so, upon what consideration ? If made before delivery to the payee, and upon request of the maker, the presumption would be that the purpose was to give credit to the maker, and thus enable him to obtain an extension of time.
The extension of time would be a good consideration, and take the case without the statute of frauds. Rivers v. Thomas, supra. Under such circumstances the intent of the indorsers to aid the credit of the maker, upon a good consideration, would make them liable as guarantors to the payee or any other to whom the note might come. To give effect to the clear intent of such indors-ers, the law would give to the contract such interpretation as would give effect and validity to an otherwise ineffectual engagement.
Row, if the hotel company, after' maturity of its unindorsed original note, gave a new note to its creditor, and the creditor, for the purpose of enabling it to discount such note and pay off the past-due note upon which it was liable as indorser to the discounting bank, procured the indorsements of Whiteside and Watkins after it had accepted such an unindorsed note from its debtor, and such indorsement was not in pursuance of any agreement between the maker and the indorsers for the benefit of the maker, then it is clear that such indorsers would not be liable to the payee for whose benefit they indorsed, either as -joint makers or guarantors.
When a note is indorsed by a third person, after its delivery to the payee, and at the request. of- the payee, and for the purpose of enabling him to discount it, such an indorser cannot be held liable to the payee, either as a joint maker or guarantor, but is only liable to the assignee of such note as an indorser after protest and notice.
The decree dismissing the bill, as to the , defendants, Watkins and Whiteside, must be affirmed.