Hoover v. McCormick

Bills and notes: Indorsement or guaranty? Immaterial mistake: Collateral security: Consideration. 1. A mistake by which one who intended merely to indorse a note, with a waiver of demand, protest, and notice of nonpayment, signed instead a guaranty of payment, is immaterial, since his liability in either case is the same. 2. Failure of the payees of a note, through mere delay, to realize on collateral security, does not discharge an indorser or guarantor. 3. A written contract between principal and agent, under which the latter was to sell agricultural implements, provided that he should indorse all notes taken from purchasers which did not bear a property statement by the maker. Held, that there was a valid consideration for such an indorsement.

APPEAL from the Circuit Court for Grant County. The action was brought against Spensley, as maker, and MoCormioh, as guarantor, of two promissory notes. MeOor-micle's answer alleged that plaintiffs received from Spensley chattel mortgage security for the payment of the notes, from which, with reasonable diligence, they could have realized enough to pay the notes in full, but that they have failed to avail themselves of such security; also that if his signature was in fact obtained to a guaranty upon the notes, it was obtained by fraud on the part of plaintiffs in representing that he was signing only an indorsement; and that he signed such guaranty by mistake and misapprehension, being deceived by plaintiffs into a belief that he was simply indorsing the notes; and that there was no consideration for either indorsement or guaranty. It appeared by the evidence that MeQormick was agent of the plaintiffs, under a written contract, for the sale of agricultural implements manufactured by plaintiffs. One of the provisions of this contract of agency was that McCormick was to indorse all notes taken from purchasers of plaintiffs’ implements, which did not bear a property statement by the maker. McCormick sold one of plaintiffs’ implements to Spensley, and took the two notes in suit in part payment. The notes were payable to plaintiffs’ order, and each contained a stipulation providing that the makers and indorsers each waived presentment for payment, protest, and notice of nonpayment. The notes were upon printed blanks furnished by plaintiffs to McCormick for the purpose, but no property statement was made upon them. Upon settling his accounts with the plaintiffs’ agent, McCormick turned over a quantity of notes, including the notes in suit, which were not yet due, and some cash, which were all credited to him upon his agency account. Upon turning over these notes the plaintiffs’ agent noticed that there was no property statement upon them, and requested McCormick to indorse them. McCormick thereupon took them, and signed a printed guaranty upon the back of each, as follows: “For value received I (or we) hereby guaranty the payment of the within note at maturity, or at any time thereafter, and waive demand, protest, and ,notice of nonpayment thereof.” Chattel mortgages upon personal property were given by Spensley as collateral security to the notes, and were turned over to the plaintiffs with the notes. Testimony tending to show that the mortgaged property was of sufficient value, to pay the notes was ruled out by the court, and exception taken by the appellant. It appeared that $25 had been realized from the sale of a part of the chattel-mortgaged property. ( Under the charge of the court a verdict was rendered against both defendants for the amount due on the notes, and from the judgment on the verdict McCormick appealed.