Paine v. Noelke — 54 How. Pr. 333

Majority

p. 333

N. Y. SUPERIOR COURT.

William Paine agt. Peter Noelke, impleaded, &c.

Headnote

Pleading — Complaint—Hon-negotiable promissory note — Demurrer— Defense.

Where it appears from the complaint that one of the two defendants made the note in suit in favor, but not to the order, of the plaintiff, the payee, therein named ; that the other defendant indorsed it, and that it was thereupon delivered to the plaintiff:

Held, that, inasmuch as such an indorsement before delivery imports the liability of a maker, these averments, taken together, must be deemed equivalent to an allegation that the two defendants made the promissory note, and that both are jointly liable as makers thereof.

Although not negotiable, the instrument is a promissory note, and as such imports a consideration, though none is expressed. Want of consideration is matter of defense (Affirming 8. C., 53 How., 273 ).

A question of pleading must be determined according to the course of practice prevailing in the courts of this state, although the obligation sued upon, i. e., a promissory note, was made in another state.

In the absence of proof to the contrary, it will be presumed by the courts of this state that the law of another state in regard to a subject-matter before the court, is the same as the law in this state.

General Term, November, 1877.

Before Curtis, Oh. J., and Freedman, J.

Appeal from order overruling demurrer.

The complaint averred:

(1.) That on the 1st day of June, 1874, at Bergen, in the state of Sew Jersey, the defendant, Charles D. J. Roelke, made his certain promissory note in writing, dated on that day, and thereby promised to pay to the plaintiff the sum of $1,000, with interest, payable semi-annually, one year from said date.

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'(2.) That the defendant, P. Noelke, indorsed said note when said Charles D. J. Noelke delivered the same to the plaintiff.

(3.) That said note, at maturity, was duly presented for payment to the said Charles D. J. Noelke, but was not paid, of all which due notice was given to the defendant, P. Noelke;

(4.) That no part of said note has been paid, &c., &c.

The defendant, Peter Noelke, demurred on the ground that the said complaint did not state facts sufficient to constitute a cause of action against him.

The demurrer was overruled and judgment ordered in favor of the plaintiff thereon, with liberty to defendant to answer on payment of costs.

James Wiley, attorney, and A. C. Anderson, of counsel for appellant.

C. Edgar Smith, for respondent.

The conflict of opinion prevailing among the courts of the different states as to the nature of the contract implied by a blank indorsement of a promissory note before delivery to the payee, is quite extensive.

In the case of a negotiable note, it has been repeatedly held, in this state, that a person making such an indorsement is presumed to have intended to become liable as second indorser, and that on the face of the paper, without explanation, he is to be regarded as second indorser, and as such not liable upon the note to the payee, who is supposed to be the first indorser, but that such presumption may be overcome by parol proof that the indorsement was made to give the maker credit with the payee (Coulter agt. Richmond, 59 N. Y., 478 ; Smith agt. Smith, 37 N. Y. Superior C. R., 203).

In the case of a non-negotidble note, the obligation assumed by such an indorsement must of necessity be either that of maker or guarantor, and the better opinion in this state seems

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to be that the contract should be construed as an absolute promise to pay as a maker of the note (Richards agt. Waring, 39 Barb., 42 ; affirmed 1 Keyes, 576).

In both cases, however, the maker is presumed to have made the note upon a sufficient consideration.

Thus, although bills and notes almost always contain the words “ value received,” and although it was formerly thought necessary to insert them, and that an instrument without them would not be a bill of exchange, it has long been settled that they are immaterial, and a consideration is equally presumed to exist without them or with them (Parsons on Notes and Bills, vol. 1, p. 193, and cases there cited).

That the same presumption exists in regard to bills and notes without words of negotiability, has been distinctly held in Downing agt. Backentoes (3 Caine's R., 137), Goshen Turnpike Co. agt. Hurtin (9 Johns. R., 217), Bank of Troy agt. Topping ( 13 Wend., 557 ). The decisions in these cases rést upon the statute (1 R. S., 151, 768; 1 R. S., 151; 1 Rev. St., 768) by which all notes in writing, made and signed by any person, and containing a promise to pay any sum of money therein mentioned, are made due and payable as therein expressed, and are to have the same effect, and are made negotiable in like manner as inland bills of exchange, according to the custom' of merchants, no matter whether the promise be to pay to the payee personally, or to his order, or to the order of the maker, or unto the bearer (sec. 1). The statute further provides that the payees * * * of every such note payable to them or their order, * * * may maintain action for the sums of money therein mentioned, against the maker * * * of the same, in like manner as in cases of inland bills of exchange, and not otherwise (sec. 4).

It was, therefore, distinctly laid down in Goshen Turnpike Company agt. Hurtin, and Bank of Troy agt. Topping (supra), that the presumption stands good until the defendant destroys it, and hence that it is not requisite that a consideration should appear upon the face of the note, or be pleaded.

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It is only in the case of instruments which either do not fall within the statute, or which contain in themselves something which destroys the presumption, that a different rule applies. Thus, in Prindle agt. Caruthers ( 15 N. Y., 425 ), the instrument on which the complaint was founded, was not a promissory note because it was not payable at all events. If neither Henry Caruthers nor his wife had survived till the first day of April succeeding the making of the instrument, nothing would ever have been payable upon it. It was held necessary, therefore, that the promise should appear from the complaint to have been made upon consideration. Inasmuch, however, as the complaint set forth the instrument in full, and the same purported to have been made for value received, the court came to the conclusion that a consideration had been sufficiently alleged.

So in Spear agt. Downing ( 12 Abb., 437 ), the instrument sued upon was not a promissory note, payable at all events, and as its language rather negatived than supported the presumption of a legal liability, the court held that, though the instrument was pleaded in full under section 162 of the Code, the absence of any allegation showing a consideration was a fatal defect.

In Richardson agt. Carpenter ( 2 Sweeny 360 , and 46 N. Y., 660 ) the discussion took place upon the proofs, and not upon the pleadings. The money was payable out of a particular fund, and, therefore, the instrument was not a draft within the law-merchant. The remarks made in the course of that discussion by Mohell, - J., in this court, and by G-boveb, J., in the court of appeals, were to about the same effect as the decision in Spear agt. Downing.

A promissory note, in order to fall within the "statute, must consist of a written promise to pay a certain sum of money, at a future time, unconditionally and at all events. It must not depend on any contingency, nor be payable out of any particular fund. The note in suit comes fully up to these requirements. It is a written promise to pay to the plaintiff

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the sum of $1,000, one year from the date thereof, absolutely and unconditionally.

The learned judge below was, therefore, correct in holding that, “ inasmuch as it appears from the complaint that one of the two defendants made the note in suit in favor, but not to the order, of the plaintiff, the payee therein named that the other defendant indorsed it, and that it was thereupon delivered to the plaintiff, and inasmuch as such an indorsement before delivery imports the liability of a maker, these averments, taken together, must be deemed equivalent to an allegation that the two defendants made the promissory note, and that both are jointly liable as makers thereof. Although not negotiable, the instrument is a promissory note, and as such imports a consideration, though none is expressed. Want of consideration is matter of defense.”

The appellant insists, however, that the effect of his indorsement is to be determined according to the laws of New Jersey, where the note was made, and that upon this point the rule of law stated in Richards agt. Waring (supra), is not the law of that state. This question, it seems to me, is. not involved in the present appeal, which presents simply a question of pleading that must be determined according to the course of practice prevailing in the courts of this state. In the absence of proof to the contrary, it will be presumed by the courts of -this state that the law of another state in regard to a subject-matter before the court, is the same as the law in this state (Leavenworth agt. Brockway, 2 Hill, 202 ; Chendy agt. Arnolds, 15 N. Y. R., 353; Robinson agt. Dauchy, 3 Barb., 21 , 29; Hoffmann agt. Carow, 22 Wend., 324 ).

The order should be affirmed, with costs.

Cubtis, Oh. J., concurred.

Cases cited

Richardson v. Carpenter 2 Sweeny 360 N.Y. Super. Ct. 1870-04-30 p. 336