O'Fallon v. Kerr

Napton, J.,

delivered, the opinion of the Court:

This was an action of assumpsit brought by Delaney in his life time against Matthew Kerr, upon the following note:

“$2080 01. St. Louis, August 17, 1842. On demand we promise to-, pay to M. Kerr or order, two thousand and eighty dollars and one cent, without defalcation or discount, and for value received, with interest from date at the rate of ten per cent per annum. J. & A. Kerr.” It was assigned in the following- words-: “Pay to D. Delaney. Matthew. Kerr.”

On the trial the plaintiff proved a demand upon Beverly Allen, theassignee of Augustus Kerr, serviving, partner of the firm, of J. & A. Kerr, on the 15th July, 1844, and a notice to Matthew Kerr, on the following day. It appeared, that all the parties resided in St. Louis — that J. & A. Kerr were in merehantile business, and in-excellent credit up to the death of J. Kerr, which took place in December 1848 — that Matthew Kerr was the uncle of J. & A., Kerr,, not engaged in any business, but was a mere accommodation endorser. No doubt was entertained, but that J. & A. Kerr would have paid the note, if ithad been presented at any time before J. Kerr’s death. At that time it was discovered that they were largely insolvent, and their assets would pay about 38 1-3 per cent. John Kerr’s estate would not pay 3 per cent.

On this state of facts, the court, (to whom the case was submitted)was of opinion, that the plaintiff could not recover. A motion for a new-trial was made and overruled-

The only question presented by the record, is-whether the facts in proof;' made out a case of sufficient diligence on the part of the holder against the makers of the note,, to authorize a recovery against the assignor.— The note is not so framed as to be a negotiable note within the meaning of our statute. The rights of the parties to the instrument have therefore to be regulated by our act concerning- bonds and notes. The sixth section of that act declares that an action can. be-maintained by an assignee against an assignor,, only where due diligence has been used in prosecuting a suit against the maker, or when the insolvency or non-residence of the maker rend'ers; such a suit unnecessary- or unavailing..— Has due diligence been used in this case?

This note is payable on demand. It is conceded and all the authorities concur, that a note payable on demand is due immediately, that is, is; payable on presentment — and suit may be instituted the day after the . note is given. Easton vs. McAlister, adm’r., 1 Mo. Rep., 662. But it is *555argued by the plaintiff in error, that the holder may postpone a demand -so long as he chooses, and the contract is not affected thereby; that the assignor is a mere security, and as such his liability is coextensive with that of his principal. This argument seems to proceed rather from a knowledge of the character and probable intentions of the parties to this note as inferred from the evidence on the record, than from any legal ■deductions drawn from the form of the instrument. A sufficient answer to such arguments is, that the law cannot be dispensed with to avoid the hardships of a particular case, and if a capitalist chooses to invest his money on such notes as these, he must be presumed to know the regulations which the legislature have prescribed for their interpretation. Here is a note given by J. & A. Kerr to Matthew Kerr, and assigned by Matthew Kerr to Dennis Delaney. Who that had ever read our statute book would suppose that such a note was given by the merchantile house of J. & A. Kerr, for money borrowed of Delaney, and was designed by the latter as a mere investment of money at interest, with M. Kerr for security? This, it is probable from the evidence, is so, but if such forms are adopted, with a view to the securityship of the assignor, it is apparent that they do not answer the object designed. The assignor is not a security, except sub modo. He is only responsible on a contingency.— Those who purchase sueh paper, look to the ability of the makers, if they suffer it to lie until after due. The holder cannot by deferring to make a demand for years, still hold the assignor a’esponsible.

In the case of Collins vs. Warburton & Risley, (3 Mo. Rep., 203,) the declaration set out a suit, instituted against the maker of the note, eight months .after the note became due; and this was not considered due diligence. The court said: “In this case we think the declaration defective in not averring that the suit was instituted at the first term of the court ..after the note became due, or showing some excuse therefor.” In the case of Harris vs. Harman, (3 Mo. R., 450,) ,there was evidence to show, that the makers of the note were solvent and able to pay at the date of the assignment, and had so continued up to the time the suit was instituted against the assignor. The court directed a verdict for the defendants, if the jury believe the facts to be so.

In the case now under consideration, the note was due nearly two. years before this suit was commenced, and for sixteen months after the note was due, the makers were able to pay and no demand was made or suit commenced against them. Nor has the administrator of John Kerr been sued, though his estate would, according to the evidence, pay a small dividend; nor the assignee of J. & A. Kerr, though the assets of *556that firm will pay 33 1-3 per cent. Under these circumstances, we are of opinion no diligence has been shown, and the plaintiff cannot recover.

The other Judges concurring, the judgment is affirmed.