Skinner v. Mahoney , 140 Miss. 625 ( 1925 )

^* Headnotes 1. Bills and Notes, 8 C.J., Section 527; Liability of a stranger who indorses commercial paper before delivery, see note in 18 L.R.A. 34; Character under negotiable instrument law of one who places his name on back of note prior to or at time of delivery, see notes in 14 L.R.A. (N.S.) 842; L.R.A. 1916D, 223; 3 R.C.L., pp. 1123, 1124; 1 R.C.L., Supp., p. 995; 2. Bills and Notes, 8 C.J., Sections 895, 988 (Anno); 3. Bills and Notes, 8 C.J., Section 557 (Anno). This is a suit by the appellant, Mrs. Bettie J. Skinner, trustee, to recover from the appellee, Mrs. G.R. Mahoney, the amount of fifty thousand dollars, as evidenced by five notes for ten thousand dollars each, on the back of which notes Mrs. Mahoney had written her name in blank; the maker of the notes being Alice Mahoney Vincent, who had purchased a plantation from Mrs. Bettie J. Skinner, trustee, and executed the notes here involved as part payment on the purchase price of the plantation.

On December 21, 1920, a few days prior to the maturity of the first one of the notes, the appellee, Mrs. Mahoney, requested an extension of five years on the principal of that note, and this extension was granted by Mrs. Skinner. The letter requested the extension "as comaker and indorser of the notes executed by G.S. and A.M. Vincent in your favor for fifty thousand dollars of the balance of the purchase money on the plantation," etc. Mrs. Skinner extended the first note for five years by writing on it, "Principal extended for five years."

When the second note became due the following year, the maker, Mrs. Alice Mahoney Vincent, failed to pay the note, and, under an accelerating clause of the deed of trust given by Mrs. Vincent to secure the payment of the five notes here involved, as well as to secure other amounts due on the purchase price of the plantation, Mrs. Skinner declared all of the notes due at once, and then she proceeded to foreclose and finally brought this suit against the appellee, Mrs. Mahoney, to recover against her the amount of the five notes of ten thousand dollars each as indorser or comaker thereon.

When the second note became due, and the maker, Mrs. Vincent, did not pay it, the payee, Mrs. Bettie J. Skinner, trustee, failed to present the note to Mrs. Vincent for payment, and also failed to notify the appellee, Mrs. Mahoney, that payment had been demanded and that the maker had failed to pay the notes, or any one of them. The record shows without dispute that Mrs. Mahoney received no notice of the failure of the maker to pay the notes when due, nor was Mrs. Mahoney notified of the acceleration of the notes by the holder, Mrs. Skinner, trustee, nor of presentation and dishonor after acceleration.

At the trial of the case, the appellee, Mrs. Mahoney, resisted the suit on the ground that she had no notice of the failure of the maker to pay the notes when due, and that she had no notice of the acceleration under the deed of trust, and that, in fact, none of the notes were presented to the maker for payment at the time of the acceleration or at any other time. The lower court peremptorily sustained this contention, and held that Mrs. Mahoney was not liable on the notes as indorser or otherwise, and from this judgment the appeal is prosecuted.

The appellant contends that the lower court should have allowed a recovery against Mrs. Mahoney because, first, she was a comaker of the notes; second, that, if not a comaker, then she was an indorser and waived notice of nonpayment when she asked for an extension of five years in which to pay the first note, and that, when the extension was granted, she waived notice of presentation and nonpayment, and that, since the accelerating provision of the deed of trust was binding upon her as either comaker or indorser, it was not necessary to notify her of the exercise of the option of the accelerating clause of the deed of trust.

We think the position of the appellant is untenable, and that the judgment of the lower court is correct because the record discloses the undisputed fact that the appellee, Mrs. Mahoney, was only an indorser on the notes and not a comaker, even though she may have thought she was a comaker when she wrote the letter to Mrs. Skinner, the holder of the notes, asking for an extension of five years in which to pay the first note. It is true she wrote the letter saying that, "as a comaker and indorser, I am asking the extension;" yet it is manifest that she was not in fact a comaker, but was an indorser by having written her name in blank on the back of the notes. Taylor v.Ross, 129 Miss. 536, 92 So. 637; section 2641, Hemingway's Code.

We do not think the indorser on the notes waived her right to notice of presentation and nonpayment. The extension of the time in which to pay the first note was not, in our opinion, a waiver of notice, because this note was declared due under the acceleration clause of the deed of trust before it was due under the extension contract. The indorser, Mrs. Mahoney, was released from the payment of the first note, or any other one of the notes, upon the failure of the holder to notify her of the acceleration, for the reason that, when the holder of the notes declared all of them due and payable, it became her duty to then notify the indorser of the failure of the maker to pay the extended note, and all of the other notes, which had suddenly become due and payable by acceleration.

There is a further contention by appellant, first made in her reply brief, that, even though the appellee cannot be held liable for the principal amount of any of the five notes, still judgment should go against her for at least the interest on the first note, because there was no extension as to the interest when she secured the extension of the time of payment as to the principal. But we are unable to see any merit in this position, because liability for the principal amount must exist before there is liability for the interest on the principal, and, since there is no liability as to the principal, there is none as to the interest.

In view of these conclusions, we think the judgment of the lower court should be affirmed.

Affirmed.