Salmons v. Brockett

32 Ohio C.C. Dec. 429, 19 Ohio C.C. (n.s.) 202, 1911 Ohio Misc. LEXIS 376

• Court: Cuyahoga Circuit Court
• Decided: November 13, 1911
• Status: Published

Opinion

WINCH, J.

The question in this ease is whether'a demurrer by defendant Brockett to plaintiff’s amended petition was properly sustained.

It declares upon two promissory notes for $2,200 each, both executed July 20, 1904, by the Cleveland Printing & Publishing Co., payable to the plaintiff four months after date, which would be November 20, 1904, and both endorsed by defendants, W. M. Day, F. J. Staral and A. J. Brockett.

The question raised by the demurrer‘is whether said petition sufficiently alleges that notice of dishonor and ‘ demand were waived by the endorsers.

On this point the petition reads as follows:

“Each of said endorsers waived the notice of dishonor and nonpayment and demand required by the statute to be given them in this, to wit: That on or a day or two prior to November 20, 1904, the date when the within notes became due, W. M. Day, one of the three endorsers to the aforesaid notes, and the president and treasurer of the Cleveland Printing & Publishing Co., brought three renewal notes, two for two thousand dollars ($2,000) each, dated November 20, 1904, with the same endorsers on the back, and one for four hundred dollars ($400) endorsed by Luther Allen, and requested this plaintiff to accept said three notes in place of the two original notes herein described, and stated to this plaintiff that the Cleveland Printing & Publishing Co., of which he was the president and treasurer, could not pay the original notes above set forth when due on November 20, 1904. This plaintiff thereupon rejected and refused to accept the renewal notes.”

The law on this subject is now found in Secs. 8187 and 8214 Cl. C.

Section 8187 provides that presentment for payment is dispensed with by waiver, express or implied.

Section 8214 reads as follows:

“Notice of dishonor may be waived either before the time of giving notice has arrived, or after the omission to give due notice. The waiver may be express or implied.”

It is claimed that in this case the waiver of demand was implied from the knowledge of the endorsers that the notes would not be paid at maturity, waiver of notice of dishonor from the conduct of the endorsers in offering renewal' notes endorsed by themselves.

The first point is not well taken. It was held in the case of Bassenhorst v. Wilby, 45 Ohio St. 333 [13 N. E. 75]:

“The known insolvency of the maker, and that he himself can not pay, does not dispense with the necessity of presentment for payment in order to fix the liability of the endorser. ’ ’

The second point, waiver of notice of dishonor, may be implied, as quoted by counsel for plaintiff, from Boyd v. Toledo Bank, 32 Ohio St. 526 [30 Am. Rep. 624] “if- the conduct on the part of the endorser toward the holder of the note is calculated to put a person of reasonable prudence off his guard, or induce him to omit demand, or to give notice of dishonor.”

But was there any such conduct in this case ? What did the endorsers do? They offered two renewal notes for part of the sum due, and a note endorsed by Luther Allen in payment of part of it. This the plaintiff refused to accept. It does not appear that Brockett was promptly notified that these three notes were not accepted. Was he not hereby lulled into temporary security instead of plaintiff’s being put off his guard?

In the case last cited, Boyd, when asked by one of the makers to endorse a renewal note, which it had agreed to accept in payment of the note sued upon, promised to do so, and told the maker to leave the note at the bank and he would come in in a few days and endorse it.

The note was left at the bank, and it was informed of Boyd’s agreement. The day for demand and notice went by, the bank relying upon Boyd’s promise to endorse the renewal note. He afterwards refused to endorse it. Judge Wright delivering the opinion, justly remarks: “Had he kept his word and endorsed the note on Monday, the necessity of notice and protest was waived.”

But had the bank not agreed to accept a new note endorsed by Boyd, it would not have been misled by Boyd’s failure to go in on Monday and endorse the note. So here plaintiff was in no way misled by the tender of the new notes endorsed by Brockett, for he refused to accept them, and had plenty of time after his refusal to demand payment of the original notes, and give notice of their dishonor.

The case of Jenkins v. White, 147 Pa. St. 303 [23 Atl. 556] is cited by counsel for plaintiff as sustaining his claim. The syllabus of the case reads as follows:

‘ ‘ The offer of a renewal note with the same makers and endorsers as the original note, constitutes a waiver of protest. Such an offer shows that the endorsers did not expect the original note to be paid at maturity, and they could not have been injured by the failure to give notice of its non-payment. ’ ’

This is not in accord with the Ohio rule announced in Boyd v. Toledo Bank, supra, which bases the waiver upon the fact that the holder was misled by the conduct of the endorser and not upon the fact that the endorser is not prejudiced by the failure to give notice. The latter, in Ohio, at least, is entitled to stand upon his legal rights, unless his conduct was misleading to the holder to his prejudice.

The case is also distinguishable from the case at bar in that tbe renewal not tendered was identical with tbe original note in amount-. Here tbe endorser tendered new notes.for only part of the original notes, expecting the balance thereof to be paid by tbe Luther Allen note.

Tbe case of First National Bank v. Weston, 49 N. Y. Supp. 542, was upon the original note, although destroyed upon the giving of a renewal note with the same endorsers, and although there had been many subsequent similar renewals, all accepted by the bank. Of course, notice of dishonor of the first note was waived, for the holders acted upon the proposal of the endorsers. The case is in line with the Boyd case.

The case of May v. Boisseau, 8 Leigh (Va.) 164, is in point and in line with the Ohio cases.

The demurrer to the amended petition was properly sustained, and the judgment thereon is affirmed.

Henry and Marvin, JJ., concur.