271 F. 366 | D.C. Cir. | 1921
The appellee, which we shall call the bank, brought suit against Ryan on a promissory note, and filed an affidavit of merit under the seventy-third rule of the trial court. Ryan pleaded in bar, and in due time filed an affidavit of defense, then a substituted one, and finally the one which is now before us. The bank moved for judgment; the court granted the motion on the ground that Ryan’s affidavit did not state a defense, and gave judgment for the bank, from which Ryan appeals.
Was Ryan’s affidavit sufficient? Since it represents his third attempt, it must be assumed that it says all that can be said in bis behalf. From it we gather the following: A corporation known as Ryan’s Auto Service was indebted to the bank on four notes, aggregating $7,900, which Ryan “had signed as indorser.” Ryan was the chief, if not the sole, stockholder of the corporation. Certain parties purchased the biisiuess of the corporation and assumed all its liabilities. Between these parties, the bank, and Ryan there was an agreement by which Ryan was not to further indorse the notes of the corporation. Two of the notes which he had indorsed—one in the sum of $2,300 and another in the sum of $800—became due. Renewal notes for the amounts evidenced by them, and signed by the corporation and third parties, were taken by the bank. Ryan did not indorse them. Rater the other two notes, one in the sum of $2,500 and the other in the sum of $1,900, became due, but were not paid; nor were they extended.
About three months after this Ryan was called to the bank and told by the vice president that he must put his notes in bankable shape, and that if he would sign a note for $7,500—the four notes having been curtailed in the sum of $400 at some time not slated—it would be all right. Ryan hesitated, and said he was no longer liable as indorser upon any of those notes; but the vice president insisted that he was, and added that the assets of the corporation were sufficient to pay them; that he needed the $7,500 note only to enable the bank
The affidavit shows that the notes were never transferred from the payee bank, and that it never indorsed them. He was the only indorser. A fair construction of the affidavits warrants the conclusion that he signed the notes at or before the time they were delivered and for the purpose of enhancing their credit. If this were not the fact, it should have been so alleged, clearly and distinctly, as the seventy-third rule requires.
In the leading case of Good v. Martin, 95 U. S. 90, 93, 97 (24 L. Ed. 341) the court said:
*369 “ * * * But if any one not the payee of a negotiable note, or, in the case of a note not negotiable, if any party writes his name on the back of the note, at or sufficiently near the time it is made, his signature binds him in the same way as if it was written on the face of the note and below that of the maker; that is to say, ho is held as a joint maker, or as a joint and several maker, according to the form of the note.”
In the same decision we also read:
“Decided cases almost innumerable affirm the rule that, if one not the promisee indorses his name in blank on a negotiable promissory note before it is indorsed by the payee, and before it is delivered to take effect as a promissory note, the law presumes that he intended to give it credit by becoming liable to pay it either as guarantor or as an original promisor.”
To the same effect, see Bendey v. Townsend, 109 U. S. 665, 667, 3 Sup. Ct. 482, 27 L. Ed. 1065; Browns Valley State Bank v. Porter, 232 Fed. 434, 439, 146 C. C. A. 428; Chandler & Taylor Co. v. Norwood, 14 App. D. C. 357, 367; Randle v. Davis Coal Co., 15 App. D. C. 357, 359.
Daniel, in his work on Negotiable Instruments (6th Ed.) § 713, says:
“That a third party whose name is on the hack of a note before that of the payee * * * is held by numerous authorities * * * prima facie as a joint maker.”
And he cites Good v. Martin, supra, and many other cases in support of his statement. The same authorities hold that as between the original parties to the Hole it is always open to the defendant to show by parol or otherwise the capacity in which he indorsed. It may be that he was lo be held only as an indorser, and, if so, the law will enforce the agreement. The rule we are applying here deals only with the prima facie case made by Ryan’s affidavit, which, as we have seen, was against him. If he was a technical indorser on the original notes, it was for him to show it. In this he failed. The taking of the renewal notes did not release him on the theory that he was an indorser.
“The acceptance of a negotiable note for an antecedent debt will not extinguish such debt, unless it is expressly agreed that it is received as payment.” Peter v. Beverly, 10 Pet. 532, 568 (9 L. Ed. 522).
In Downey v. Hicks, 14 How. 240, 249, 14 L. Ed. 404, it was ruled that a “note of the debtor himself, or of a third party, is never considered as a payment of a precedent debt, unless there be a special agreement to that effect.” Many decisions are cited. See, also, Maxwell v. Holmesville Mill & Power Co., 231 Fed. 684, 686, 145 C. C. A. 570; Edison Electric Illuminating Co. of Boston v. Tibbetts, 241 Fed. 468, 154 C. C. A. 300; In re Howe (D. C.) 235 Fed. 909.
The affidavit does not set forth any special agreement, nor any other fact to indicate that Ryan was to be released from liability for the
From the foregoing considerations it is clear the affidavit does not state a defense. The judgment must be, and it is, affirmed, with costs.
Affirmed.
Mr. Justice STAFFORD, of the Supreme Court of the District of Columbia, sat in the place of Mr. Justice ROBB in the hearing and determination of this appeal.