Bergmann v. Roll

Rosenberry, J.

The contention that there is a misjoinder of causes of action is based upon the proposition that the makers, the indorser of a promissory note, and guarantor of a mortgage securing the note, cannot be joined in one action. Cottrell v. New London F. Co. 94 Wis. 176, 68 N. W. 874; Midland T. C. Co. v. Illinois S. Co. 163 Wis. 190, 157 N. W. 785. See, also, Schultz v. Wise, 93 Neb. 718, 141 N. W. 813; Wolf v. Eppenstein, 71 Oreg. 1, 140 Pac. 751; Bowen v. Clark, 25 Oreg. 592, 37 Pac. 74; Graham v. Ringo, 67 Mo. 324. This contention is met by the plaintiff with the proposition that Richard Roll, Jr., is an indorser and not a guarantor. The liability of Richard Roll, Jr., if any, is such as he incurred by reason of the writing and sending of the letter of October 18, 1918, Exhibit C. It is alleged in the complaint that he “guaranteed said note, and which said guaranty was attached to said note,” and it is argued that thereby he became an indorser.

There are two answers to this contention. First, by the language of Exhibit C, Richard Roll, Jr., undertook to guarantee and stand back of the mortgage. He nowhere mentions the note. Giving this language its broadest possible construction, it can be interpreted to mean no more than that Richard Roll, Jr., undertook to make good any deficiency there might be after the foreclosure of the mortgage and the application of the proceeds of the mortgage sale to the note. So that by the terms of the instrument itself he was a guarantor and not an indorser. Second, the plaintiff wholly misconceived the effect of attaching a separate document, executed subsequently to the making and delivery of a promissory note, to the note itself.

By sec. 116.68, Stats. (Uniform Negotiable Instruments Act), an indorser is defined as follows:

“A person placing his signature upon an instrument otherwise than as maker, drawer or acceptor is deemed to be an indorser, unless he clearly indicates by appropriate words his, intention to be bound in some other capacity.”

The only exception to the rule that an indorser becomes such only by placing his signature upon the instrument is that where the.back of the instrument has been covered by indorsements or other writing, leaving no room for further indorsements, a strip of paper called an allonge may be attached to the instrument and subsequent indorsements may be written thereon. When these conditions are complied with the writing upon the allonge has the same effect as if it were made upon the instrument itself. Crosby v. Roub, 16 Wis. 616; Osgood’s Adm’rs v. Artt, 17 Fed. 575; Bishop v. Chase, 156 Mo. 158, 56 S. W. 1080; Commercial S. Co. v. Main St. Pharmacy, 174 N. C. 655, 94 S. E. 298.

It appearing, therefore, that if Richard Roll, Jr., had any liability it was that of a guarantor and not that of an- in-dorser, as to him there was an improper joinder of causes of action and the demurrers as interposed on that ground should have been sustained. Whether he is liable as a guarantor, no acceptance having been alleged and no consideration stated, are questions not now properly before us and are not passed upon.

Richard Roll having signed his name upon the back of the instrument was an indorser within the terms of the section previously quoted. On his behalf it is contended that he is discharged, first, because there is no allegation as to presentment, demand, and notice of nonpayment. The plaintiff meets this contention by saying that it is alleged in the complaint that the defendants made payments on the note. The allegation is as follows: “That from and after the making of said note and up to and until October 1, 1926, the said defendants made payments thereon and such payments were indorsed on the back of the note.” There are four defendants, two of whom were prima facie primarily liable upon the instrument. The other two defendants, if liable at all, are secondarily liable. We are asked to construe the allegation that payments were made by the said defendants to mean that there was a joint payment although the defendants were liable in different relations and the liability was several, not joint. Boyd v. Beaudin, 54 Wis. 193, 11 N. W. 521. We incline to the view that such an allegation as this, where there is not a joint liability, should not be construed to allege a joint payment, and, in the absence of any showing to the contrary, that the allegation should be interpreted to mean that the payments were made by those primarily liable upon the instrument, that is, by the parties from whom payment was due, and not by a party who is shown not to be liable by the remaining allegations of the complaint.

As to the defendant Richard Roll the allegation of a payment is not sufficient to amount to a waiver. In order to amount to a waiver, payment must have been made with full knowledge of the facts and circumstances. Knapp v. Runals, 37 Wis. 135; 29 L. R. A. 314, note. If payment has been made in ignorance of the fact that demand was not made and notice given, it has been held that an indorser may recover back the money so paid. Garland v. Salem Bank, 9 Mass. 407, 6 Am. Dec. 86.

Where a party seeks to excuse actual presentment, demand, and notice of nonpayment on the ground that the same have been waived by the party he seeks to charge, he must plead the facts. 8 Corp. Jur. § 1190 and cases cited.

If there were a definite allegation here that the payment was made by Richard Roll, it might be presumed therefrom that it was made with notice that there was no presentment, demand, and notice of nonpayment. To reach this conclusion we are required to infer, first, that the payment was made by Roll; second, that it was made by him with full knowledge of all the facts and circumstances; in other words, to base an inference upon an inference. It has been said that an inference upon ah inference will not be permitted. U. S. v. Ross, 92 U. S. 281. See cases collected in 1 Wigmore on Evidence (2d ed.) p. 258, § 41. Mr. Wigmore attacks this proposition in his characteristic manner, saying:

“The judicial utterances that sanction the fallacious and impracticable limitation, originally put forward without authority, must be taken as valid only for the particular evidentiary facts therein ruled upon.” Vol. 1, p. 260, § 41.

This view has been indorsed. See Hinshaw v. State, 147 Ind. 334, 47 N. E. 157; State v. Fiore, 85 N. J. L. 311, 88 Atl. 1039.

We shall not enter upon a discussion of what are facts and what are inferences and when an inference is properly supported by an inference. The Code requires the plaintiff to set forth “a plain and concise statement of the facts constituting each cause of action.” When, in order to sustain a pleading, the pleader must resort to inferences based upon inferences to spell out the indispensable allegations of fact, it is held that the pleading is not in compliance with the statute, especially so where the pleading is promptly challenged by demurrer.

There being no allegation that there was presentment, demand, and notice of nonpayment and no allegation of the payment by Richard Roll with full knowledge of the facts and circumstances, it appears from the allegations of the complaint thát Richard Roll was discharged as an indorser and the demurrers should have been sustained upon that ground.

There being no allegation of payment by those secondarily liable upon the instrument, it clearly appears upon the face of the complaint that any claim that plaintiff may have against the defendants secondarily liable is barred by the statute of limitations (sub. (3), sec. 330.19), and the demurrer should have been sustained upon that ground. Payments made by a maker do not toll the statute as to those secondarily liable on the instrument. State Bank v. Pease, 153 Wis. 9, 139 N. W. 767; sec. 330.47, Stats. If payment by one of a number who are jointly liable does not toll the statute as to those liable with him, it certainly cannot do so when the payor is one of a number who are severally liable.

We cannot escape the feeling that if a small part of the skill and learning displayed here in an endeavor to support the plaintiff’s complaint had been expended in the drafting of the complaint, the whole controversy might long since have been disposed of upon the merits.

By the Court. — The order appealed from is reversed, and cause remanded with directions to sustain the demurrers and for further proceedings according to law.