McGee v. Connor , 1 Utah 92 ( 1873 )

McKean, C. J.,

delivered the Opinion of the Court.

The Respondent brought his action in the Third District Court, and complained of the defendants as follows: “ The above-named Plaintiff complains of the above-named Defendants, and for cause of- action alleges, that heretofore, to-wit: on the 22d day of October, 1872, at Salt Lake City, the Plaintiff and Bernard D. Sloan were co-partners, under the firm name óf D. G. Magee & Co.; that at the date and place last aforesaid, the Defendant, John M. Murphy, made his certain promissory note to the said D. B. Magee & Co., in words and figures following, to-wit:

“$1,080.00.

Salt Lake City, Gctoher 22d, 1872.

Sixty (60) days after date, for value received, I promise to pay to the order of D. B. Magee & Co., onethous- and and eighty dollars, negotiable and payable at the Banking House of Wells, Fargo & Co., in lawful money of the U. S., without defalcation or discount, without interest.

JOHN M. MCRPHY.”

That at the time of making said note, and before its delivery, the Defendant, Patrick Edward Connor, for value received, indorsed the same by writing on the back of said note his signature in words following, to-wit: “P. Edw. Connor;” and that the said note, so indorsed, was then and there delivered by the said Defendants to the said D. B. Magee & Co.;.that afterwards, and before the said note became due, the partnership heretofore existing as aforesaid, between the Plaintiff and the said Bernard D. Sloan, was dissolved; that after said dissolution, to-wit: on the 29th day of November, 1872, the said Bernard P. Sloan, for a good and valuable consideration paid to him by the Plaintiff, assigned and transferred all his interest in said note to the Plaintiff, who then became, and still is, the owner and holder thereof; that on the 24th day of December, 1872, the said note was presented for payment at the said Banking House of Wells, Fargo & Co., in Salt Lake City, and payment of the same' was demanded, but was not paid; that notice thereof was given to the said Defendant, Patrick Edward Connor; that the Defendahts have not paid the said note, nor any portion- thereof.

Wherefore the Plaintiff demands judgment against the Defendants for the sum of ten hundred and eighty dollars, with interest thereon at the rate of ten (10) per cent, per annum, from the 24th day of December, 1872, and his costs of action.” The complaint was verified.

To this complaint the Defendant, Connor, simply answered, “ That notice of dishonor of said promissory note in said complaint mentioned was not given to this Defendant.”

On the 18th day of August, 1873, the Plaintiff’s Attorney caused to be served on the Defendant Connor’s attorney, a notice that at the opening of the District Court on the 28th day of August, or as soon thereafter as counsel could be heard, he would move the Court for judgment for the Plaintiff against the Defendant Connor for the full amount claimed in the complaint, the motion to be based on the pleadings on file in said action.

That motion was argued by the respective counsel on the 10th day of September, 1873, and judgment was rendered thereon for the Plaintiff against the Defendant Connor, for the sum of $1,157.10, with $20 costs and disbursements.

The Defendant Connor appeals from that judgment to this Court, and assigns as error,- that the Court below erred in granting the said motion.

As to whether a person who placeshis name on the back of a promissory note, as did the Defendant Connor, thereby renders himself liable as maker, guarantor, or indorser, is a question upon which there is a wide conflict of authority in different States. This question is learnedly commented upon in Redfield & Bigelow’s Leading Cases upon Bills of Exchange and Promissory Notes, pp. 110 to 156 inclusive. In a note on page 155, those authors say:

“It may be stated, as the result of the foregoing caséS and citations, that in the following States, one who, not a party to negotiable paper, places his name, without more, on the back of the same, before an indorsement by the payee, renders himself, in the absence of proof, liable as maker or surety: Massachusetts, Vermont, Maine, New Hampshire, Michigan, Louisiana, Missouri, South Carolina, Texas; also in Rhode Island, Georgia, Ohio and Minnesota, if the party signed befqre delivery to and to secure the payee. In the following as indorser: New York, Mississippi, Pennsylvania, Tennessee, Iowa, Wisconsin, California, Indiana. In New York this liability cannot be changed by parol proof. In the following as guarantor: Illinois, Connecticut, Ohio; also in Virginia, if the paperds not negotiable. In New York and Louisiana, if the paper is negotiable, such person becomes maker or guarantor.”

The case now at bar is, it seems, the first that has come before this court involving the questions now presented for our consideration. There is here no statute controlling these questions, and we must look to the Supreme Court of the United States for their authoritative decision. The case of Rey et al. v. Simpson (22 How., 341) has been cited by the counsel for the respective parties, and each claims it to be decisive of the case in favor of the client. Let us examine it.

That action was brought in a District Court of the Territory of Minnesota, upon a promissory note, of which the following is a copy:

$3,517.07¿

St. Paul, June 14, 1855.

Six months after date, I promise to pay to the order of James W. Simpson, three thousand five hundred and seventeen dollars, and 07½-100, value received.

(Signed) ALEX. REY.”

Marshall & Co. (William R. Marshall and Joseph M. Marshall) indorsed their firm name bn the back of this note before it was delivered to Simpson, who afterwards brought his action thereon against Ray and the Marshalls. In his complaint, in which Marshall & Co. were called “endorsers,” Simpson alleges “that, after making and signing the note, the Defendant Rey then and there delivered the note to the other Defendants, and that they then and there, by their partnership name, indorsed the same, by writing .the name of the firm on the back of the note, and then and there re-delivered the same to the first-named Defendant, who afterwards, and before the maturity of the note, delivered it so endorsed to the Plaintiff. He also alleges that the two Defendants, Marshall, so indorsed the note for the purpose of guarantying the payment of the same, and of becoming sureties and security to him, as the payee thereof, for the amount therein specified; and that he, relying upon their indorsement, took the notes and paid the full consideration therefor to the first-named Defendant.”

Simpson recovered judgment against all the Defendants, in the Courts of the Territory, and the Marshalls carried the case to the Supreme Court of the United States, which court, after setting forth the substance o.f the complaint, as stated above, adds:

“ Other matters, such as due presentment, non-payment, and protest, are also alleged in the complaint, which it is unnecessary to notice at the present time, as the questions to be determined arise out of the allegations previously mentioned and described.”

It hardly needed this last paragraph to convince one that a notice of protest could not relate back sis months and change the original contract of the parties. That contract rendered Marshall & Co. liable, as makersof the nóte. They were therefore not entitled to notice of protest, and Simpson need not have given it.

The Court held that, under the Minnesota .Practice it was proper to allege in the complaint “ that Marshall & Co. so indorsed the note for the purpose of guarantying the payment of the same, and of becoming sureties and security to the payee thereof,” The; Court.might also have said that it would have been permissible'for the Defendants, Marshall & Co., to allege in their answer, that, they indorsed the note only as indorsers and notas makers-or guarantors. It certainly was permissible for -either party to plead, an.d, consequently, to prove such allegations. In affirming the judgment of the Minnesota courts, the Supreme ,Court recognized the doctrine that “ one who, not a party to negotiable paper, places his name, without more, on the back of the same, before an indorsemeht by the payee, renders himself, in the absence of proof, liable as maker or surety.” It is clear that while it was permissible for Simpson to allege the purpose for which Marshall & Co. indorsed the note, still, if he had only set forth the time and maniier of their indorsing it, and had said nothing of the purpose, his complaint would: still-have contained a good cause of action,.and the law of the case would have, been the same,,.unless Marshall &. Co. had pleaded, and. proved á purpose, an understanding, inconsistent with the legal presumption that they were makers of the note.

The Civil Practice Act of Utah (sec. 39, subdiv. 2,) requires that “The complaint shall contain — A statement of the facts constituting the cause of action in ordinary and concise language.”

Now, according to the facts set forth in the complaint in the case at bar, the manner of making or indorsing the note in question by the Defendant, Connor, was without any understanding or purpose other than what the law presumed; although it was competent for either party, in his pleading, to have alleged that it was intended that Connor should be held liable only as an indorser. But neither party has made any material allegation in-consistentwith the legal presumption that Connor put his name on the note as a maker. To allege that Con-nor, sixty days after the making of the note, had notice of its dishonor, was as immaterial as it would have been to have alleged that Murphy had like notice. In the case of either, the notice, and consequently the allegation, was alike unnecessary. Such unnecessary notice of protest was also given in Rey eb al. v. Simpson; and it went for nothing in the decision of the case. In the complaint in that case, Marshall & Co. were called “ in-dorsers but they were held to be makers.

The Civil Practice Act contains the following provisions :

“ Sec. 65. Every material allegation of the complaint when it is verified, not specially controverted by the answer, shall, for the purpose of the action, be taken as true.”

“ Sec. 66. A material allegation in a pleading is one essential to the claim, or defense, and which could not be stricken from the pleading without leaving it insufficient.”

There is but one allegation in the complaint that could be stricken out without leaving it insufficient, and that is the allegation that notice of presentation and non-payment of the note was given to Connor. All the other allegations being material, and none of them being-controverted by the answer, must be taken as true. The Plaintiff was therefore entitled to judgment in the court below, and that judgment should be affirmed here. Ordered accordingly.