Lee v. Selleck

In determining the Zea: loci contractus, the engagements of the maker and indorser of a note are to be treated as independent contracts. The liability of the maker, on a note executed in New York and payable in Illinois, is controlled by the law of Illinois, the State in which his engagement is to be performed. The duty of the indorser arises only on default by the maker, and by an unrestricted indorsement in New York to the holders, he undertakes to pay them in the State in which they reside. An indorsement, written in Illinois for the accommodation of a maker in Wisconsin, but intended to be delivered at New York for the purchase of goods, takes effect as a contract on delivery there, and the liability of the indorser is to be determined by the law of New York, and not by the statutes of Illinois. Under the Illinois statutes, the holders of a promissory note are not bound to pursue their remedy against the maker in the courts of another State, as a condition precedent to recovery against the indorser.

The appeal is from an order of the Supreme Court at the General Term in the second district, reversing the judgment at Special Term, in favor of the defendant, and granting a new trial. The case, as decided in that court, is reported in 32 Barbour, 522. The appellant was sued in this State as indorser of a promissory note for $3,378.75, made in August, 1857, and payable eight months after date, at George Selleek’s bank, Morris, Illinois, with current exchange on New York. The facts material to the'issue, as found by the judge, are substantially these: The note at maturity was duly presented and protested, and due notice was given to the indorser. At the date of the note, and ever since that time, the maker, Benjamin Selleck, was solvent, and resided at Beloit, in the State of Wisconsin. He made the note in the city of New York, and forwarded it thence for indorsement to George Selleck, who resided at Morris, Illinois. The appellant wrote his indorsement there, and transmitted the note by mail to the maker at Beloit, who mailed it to the plaintiffs at New York. They received it in that city with the appellant’s indorsement thereon. The note was given for goods' sold and delivered by the plaintiffs to Benjamin Selleck, on an agreement that he would give his note with this indorsement, and the plaintiffs received it about ten days after the delivery of the goods. By the statute of Illinois then in force, the effect of such an indorsement, if all the parties had been residents of that State, and the contract had been concluded there, would be to bring the case within the following provision, the indorser being regarded as the plaintiffs’ assignor: “ Every assignor or assignors, or his, her, or their heirs, executors, or administrators of every such note, bond, bill or other instrument in writing, shall be liable to the action of the assignee or assignees thereof, or his, her, or their executors or administrators, if such assignee or assignees shall have used due diligence, by the institution and prosecution of a suit against the maker or makers of such assigned note, bond, bill or other instrument of writing, or against his, her, or their heirs, executors, or administrators for the recovery of the money or property due thereon, or damage in lieu thereof; provided, that if the institution of such suit would have been unavailing, or that the maker or makers had absconded or left the State, when such assigned note, bond, bill or other instrument in writing became due, such assignee or assignees, or Ms, or her executors or administrators, may recover against the assignor or assignors, or against his, or their heirs, executors or administrators, as if due diligence by suit had been used.” The following were the judge’s conclusions of law applica ble to these facts: 1. That the law of the State of Illinois governs the contract of indorsement of said note, and the liability of the indorser. 2. That the fact that the note was sent by the indorser by mail, to the maker in Wisconsin, and by him forwarded by mail to the plaintiffs in Hew York, does not make the contract of indorsement a Hew York or Wisconsin contract, governed by the law of either of those States, but the indorsement is governed by the laws of Illinois. 3. That the residence of the maker, Benjamin Selleck, in Wisconsin, at the time of the making and indorsement of said note, doe's not ■ relieve the plaintiffs from the necessity of prosecuting the maker at law, before resorting to the indorser. 4. That the plaintiffs have not used due diligence by the institution and prosecution of a suit against Benjamin Selleck, the maker, it not appearing that the institution of such suit would have been unavailing. 5. That the plaintiffs, on the evidence, are not entitled to recover against the defendant, George Selleck, and that the said George Selleck is entitled to judgment against the plaintiffs for his costs. To each of these conclusions the plaintiffs duly excepted. A new trial having been granted at the General Term, the appellant stipulates that if the order be affirmed, judgment absolute shall be rendered against him.