First National Bank v. Hartman

Mr. Justice Trunkey

delivered the opinion of the Court, October 5th, 1885.

On the former trial of this action the defendant offered to prove, among other things, that the note was discounted by the plaintiff for the benefit of Swartz and the proceeds went to his credit; and that on July 25th, 1877, the day the note became due, before Hartman guaranteed it, Swartz delivered to the plaintiff a guaranty as follows: “I hereby guarantee the payment of all notes drawn by Diller & Groff and indorsed by me, now held by the First National Bank of Lancaster, Pennsylvania, whether matured or to mature.” The offer was rejected.

After referring to what was said in Zahm v. The Bank in regard to the liability of the guarantor, as applicable to this case, it was said by Justice Stehrett : “The testimony offered and excluded by the court would have tended to prove that Swartz, the second indorser, continued liable to the bank notwithstanding the note may not have been formally protested. His guaranty, alleged to have been given to the bank before the maturity of the note, was virtually a waiver of protest so far as he was concerned:” Hartman v. The Bank, 103 Pa. St., 581. In view of the excluded offer of proof, that was unquestionably sound, and would be decisive against the plaintiff should the jury find there was such waiver of protest as continued the liability of Swartz as indorser. According to the offer Swartz’s guaranty was made prior to Hartman’s, as well *198as before the maturity of the note, without circumstances showing absence of intent to waive protest. .

The words “protest waived ” are equivalent to an express waiver of demand and notice of non-payment. A waiver of protest without more is sufficient to dispense with demand and notice. Its very purpose is to supersede the ordinary steps and save trouble and expense : Annville Nat. Bank v. Kettering, 106 Pa. St., 531. Hartman’s guaranty on its face dispensed with the giving of notice to the indorsers, and that included their release. If he gave it to save the expense of protest, the consideration was good. That the plaintiff would let the indorsers go was involved in his contract. If subsequently, though on the same day, the date of maturity of the note, the plaintiff and Swartz made a new contract, expressed and intended to be an additional guaranty to that already made by Hartman, such guaranty was not a virtual waiver of protest. Informing Swartz that the note was unpaid, in the negotiation between him and the cashier, not with* intent to continue his liability as indorser, was not notice of such character as makes him liable on his indorsement instead of the new contract of guaranty. It is clear that Hartman intended a release of the indorsers, and it may well be inferred from the testimony of Harner that the Bank so intended, and took a new obligation. There is testimony tending to show that Diller & Groff are the principal debtors and while this, if true, is not a controlling fact, it is consistent with the desire of both the bank and Swartz to hold on to Hartman’s guaranty. The questions of fact ought to have been submitted to the jury. It was error to affirm the defendant’s fourth point that “under all the evidence in the case the verdict must be for the defendant.”

The assignments of error need not be remarked seriatim. They are sustained as to all rulings therein complained of which are not in acoord with .this opinion and with the opinion in First National Bank of Lancaster v. Zahm’s Executors, just decided. (Ante, p. 188).

Judgment reversed and venire facias d& novo awarded.