64 Ind. 120 | Ind. | 1878
William W. Woollen, Jr., as the holder, sued John H. Ulrich and Daniel Ulrich as makers, and James B. Drake as endorser, of a promissory note as follows:
“ 1400.00. February 5th, 1872.
“ Six months after date (or before if made out of the sale of J. B. Drake’s Horse Hay-Fork and Hay-Carrier), wpromise to pay James B. Drake or order four hundred dollars, payable at the First National Bank at Indianapolis, value received, with use, without any relief from valuation or appraisement laws. If suit shall he instituted to enforce the payment hereof, we agree to pay a reasonable attorney’s fee.
“ S. Rea. Daniel Ulrich.”
Endorsed: “J. B. Drake.”
The complaint alleged facts amounting to an averment that the plaintiff had become, in good faith, the purchaser of the note before maturity for a valuable consideration-
Drake made default.
The other defendants auswered jointly, in three paragraphs.
1. Admitting the execution of the note, but alleging that its execution was procured by fraud ; that two men, whose names were unknown to said defendants, came to the residence of the defendant John H. Ulrich, in Huntington county, on the 5th day of February, 1872, and represented themselves to be agents for the sale of the patent for J. B. Drake’s Horse Hay-Fork and Hay-Carrier, and solicited the services of said defendants as agents in the same business for Rock Creek, Polk and Lancaster townships, in said county; that defendants agreed to take an agency for said townships upon certain terms and conditions and none other.
“Whereupon one of said agents or pretended agents, whose name is unknown to these defendants, proceeded to and did fill up in writing a printed blank which said agents or pretended agents said was a letter of agency to sell said article in said townships, according to said contract. These defendants then and there stated to said agents or pretended agents of J. B. Drake, that they did not understand such business themselves, that they agreed to take such agency on the above terms and no others, and that they would rely on said agents or pretended agents to prepare the said papers according thereto; whereupon said agents assured these defendants that said printed, blank, so filled up in writing as aforesaid, was a statement of their said agreement, and none other, whereupon these
“ That the article covered by the patent to J. B. Drake, above described, was worthless, and could, not be sold by he defendants; that the odiousness of the patent-right business was such at the time and long before, and such business was so generally characterized by fraud and swindling, as to be sufficient to put all persons on inquiry as to the condition of a note given for patented articles, or in connection with the patent right business, and that the condition of the note sued on was sufficient to put the plaintiff on his inquiry, and sufficient notice to him of the false manner in which such note had been procured.”
2. Alleging a want of consideration, which the plaintiff’ well knew when he purchased the note.
3. Averring a failure of the consideration for which the note was given, of wliieh the plaintiff had notice at the time when he obtained the same.
The defendant John H. Ulrich also answered in a separate paragraph, setting up substantially the same facts contained in the first paragraph above set out, except that he did not directly admit the execution of the note, and claimed that he and his codefendant did not know that the paper they had signed was a note, for some time after they signed such paper, but understood and believed that said paper was merely an agreement to act as agents for the sale of Drake’s Horse Hay-Fork and Hay-Carrier, as above herein stated.
The defendant Daniel Ulrich also answered in a separate paragraph, repeating in substance the same facts
The last two paragraphs were each verified by the affidavits of the parties respectively pleading them.
The plaintiff demurred separately to each paragraph of the answer, and the court overruled his demurrer to all the paragraphs.
Issue being joined, the cause was tried by a jury, who returned a verdict for the defendants, the Ulrichs, and judgment was rendered in their favor upon the verdict.
Error is assigned here upon the overruling of the demurrer to the several paragraphs of the answer.
A note similar to the one in suit was held by this court, in the case of Cornell v. Nebeker, 58 Ind. 425, to be a negotiable note, and we think the decision in that ease is well sustained by the authorities upon which it is based. Walker v. Woollen, 54 Ind. 164.
In considering the sufficiency of the first paragraph of the joint answer, the important question to be determined is, whether the alleged facts show due care and diligence on the part of the Ulrichs to prevent being imposed upon when they were induced to sign the note sued upon.
It is not alleged that these defendants could not read, nor that they were not men of ordinary intelligence, nor that they made any effort to read the paper which they admit they signed. It is averred that the persons who presented the note for signature were strangers to the defendants, yet the defendants admit that they signed such note, wholly relying upon such strangers, as to the character and contents of the instrument they were signing.
It maybe laid down as an established rule, that, although a man may he moved by fraudulent misrepresentations to execute a negotiable note, yet, if he carelessly and negligently so execute it, and permit such note to fall into the hands of an innocent purchaser before maturity, he can not be heard to deny his liability to pay it. Haviug thus negligently thrown his note upon the market, as between himself and such innocent holder, he must bear the loss.
There is no escape that we can see from the conclusion, that, upon the facts stated in this first paragraph of the joint- answer, the Ulrichs were guilty of great negligence in the execution of the note in controversy, and that for that reason, if for no other, such first paragraph of the answer was bad upon demurrer. Steele v. Moore, 54 Ind. 52.
What we have said applies with equal force to the separate answers of both the Ulrichs.
The separation of the note from the agreement, charged by Daniel Ulrich, did not necessarily invalidate the note in the hands of an innocent holder. Cornell v. Nebeker, supra.
The courts have gone to great lengths to protect the rights of the bona fide holder of negotiable paper, and we are not prepared to say that public policy is not best subserved by the line of judicial decisions adopted for that purpose.
The appellant has made no question upon the sufficiency of the second and third paragraphs of the joint answer of the Ulrichs, and we have consequently not considered those paragraphs.
The judgment below in favor of John H. Ulrich and Daniel Ulrich is reversed, at their costs, and the cause remanded for further proceedings not inconsistent with this opinion.