The petition for rehearing does no more than reiterate the arguments made at the hearing of this cause, but in view of the divergence of opinion on the part of the members of this Court as indicated by the dissenting opinion filed, the cause has been carefully reconsidered. The foundation of respondents' argument is that the contracts of the maker and of the endorsers are not the same; that the obligation incurred by the maker was secured by the mortgage, and that the obligation of the endorsers was not, "so that (using the language of the petition for rehearing) it is impossible to say that the instrument itself either is or is not a contract secured by a mortgage."
The fallacy of this contention lies in the assumption that because the incidents of the liability of maker and endorsers of a note are in some respects different, the instrument is not expressive of a single obligation secured by the mortgage, but is expressive of two distinct contracts, one secured by the mortgage and one not so secured.
The obligation of the maker is to pay the indebtedness. The obligation of the endorsers is precisely the same. The fact that under the Negotiable Instruments Law, for example, the endorser's obligation to pay arises only after the note is dishonored, "and the necessary proceedings on dishonor be duly taken," does not alter the fact that, in the language of the statute, the endorser agrees that "he will pay the amount thereof." Section 6817, Code.
The endorser not only agrees to pay the note, but by his endorsement guarantees its genuineness and, in the respects *Page 464 provided by statute, its legality. Sections 6816 and 6817, Code. In other words, the liability of the endorser arises out of the note in precisely the same sense that the liability of the maker so arises. The fact that there are mechanical and procedural differences in the assertion and enforcement of the endorsers' liability, and that there are substantive legal differences in defining the same, cannot alter the fundamental proposition that the liability of the endorser and that of the maker arise out of the same instrument. This being so and the instrument being one "secured by a mortgage of real property," it is not perceived that the position of the endorsers is different from that of the maker in respect to the application of the pertinent limitation statute.
This conclusion gains added force from a consideration of the fact that the credit extended on the note in question was not extended on the promise to pay made by the maker, or on the endorsement made by the endorsers, or on the two obligations combined. It was extended on such obligations plus the security of the real estate mortgage.
The obligation of the endorsers is inseparably intertwined with that of the makers under the provisions of the Negotiable Instruments Act.
The contention of respondents would involve the interpolation into the statute of words which are not there. The language of the statute is that the twenty-year limitation period shall apply to "an action upon a bond, or other contract in writing, secured by a mortgage of real property." Code 1932, § 387.
Respondents' contention would change this language to read: An action against the makers, upon a bond or other contract in writing, etc.
Careful reconsideration of the matter in the light of the lucid argument made by respondents' counsel, and of the petition for rehearing, convinces us that the opinion filed correctly disposed of the issue before the Court. *Page 465
Let this order be reported with the opinion heretofore filed.
MESSRS. JUSTICES BAKER, BONHAM and FISHBURNE concur.
MR. CHIEF JUSTICE STABLER and MR. PHILIP H. STOLL, ACTING ASSOCIATE JUSTICE.
We dissent. We think a rehearing should be granted.