Wright v. Andrews

Daneorth J.

The note in suit in this case, is evidence of a contract made in Massachusetts by parties residing there, and so far as appears to be performed there. Hence it must be construed in accordance with the laws of that commonwealth. The defendants signed the note upon the back in blank.

The case finds that at the time the note was executed and delivered there was in force in Massachusetts a statute of the following tenor : “ All persons becoming parties to promissory notes payable on time by a signature in blank on the back thereof, shall' be entitled to notice of the non-payment thereof the same as indorsers.” It will be noticed that this statute does not require a demand of the maker, but simply a notice of non-payment; which as the case finds was not seasonably given.

It is suggested in the argument that under the statute a notice to a party whose signature is upon the back of the note in blank is in all cases required and that therefore its omission in this case is fatal to the maintenance of the action. It is true that no exceptions in express terms are made in the statute. But the notice required is such and only such as indorsers would be entitled to. If then the facts are such as would excuse notice to an indorser, the same facts must necessarily excuse notice to a promisor signing as Ihese defendants did. The necessity of notice to an indorser depends upon the contract, which may be express or implied, so notice to a surety “ the same as an indorser ” must in a like manner depend upon such contract as may be made by the parties or inferred from the facts. It cannot be required in the latter case, if under the same circumstances it would not be in the former.

The main question then involved in this case is whether upon the facts found by the justice presiding the defendants were entitled to notice of the non-payment of the note.

Whatever conflict there may be in the decisions of different courts in regard to the necessity of notice to an indorser who has security for his liability as such, there appears to be none, when the property pledged for such indemnity is appropriated to, and the indorser is authorized by the contract to use it for the payment of the note. In such case it is very clear that notice may be dispensed with. By such appropriation there is a trust reposed in the indorser, and by his acceptance of it an implied promise on his part that such trust shall bo faithfully performed. In a certain sense the indorser becomes original promisor and assumes the place of the maker of the note. lie therefore suffers no injury from the fact that he is not notified of the omission of an act which fidelity to the principal, as well as to the payee, required him to perform. Story Prom. Notes, § 281. Red. & Big. Lead. Cas. 467. Haskell v. Boardman, 8 Allen, 38, 41. Ray v. Smith, 17 Wall. 411, 416.

In this case the presiding justice found that at the time the defendants indorsed the note as sureties “ they were fully secured for all liability assumed by them as such.” This security appears to have been a bank book showing a deposit in a savings bank, in the name of the maker’s wife. Subsequently as the case finds, one of the defendants went with the wife and got the money out of the bank, “ to be appropriated in payment of the note.” This appears to have been done with the consent of both husband and wife. Hence whatever may have been the effect of the original security the subsequent appropriation brings the plaintiff’s case within the principles of undisputed law. That this took place after the maturity of the note is not material, for it was not only a waiver of any release whieh might have accrued to the surety, but was a confirmation of the original pledge, and the appropriation after the maturity can be no less effectual but rather more so than if made before. The implied promise would rather be strengthened, for the inference is that both maker and surety at that time looked to that fund as the sole means of paying the note. Nor does the fact that the surety paid the money to the maker of the_note for a purpose of his own, change the result; for when that purpose failed of its accomplishment, the money was returned and now remains with the defendants, as we may well infer, to carry out the original design. Whether the money belongs to the husband or wife there seems to be no reason why the defendants should withhold it from the payment of the note to which it was appropriated with the consent of both, and which consent so far as appears has never been withdrawn.

Exceptions overruled.

Appleton, C. J., Walton, Barrows and Libbey, JJ., concurred.