Meyers Co. v. Battle, 170 N.C. 168 (1915)

Nov. 24, 1915 · Supreme Court of North Carolina

170 N.C. 168

THE MEYERS COMPANY v. J. T. J. BATTLE.

(Filed 24 November, 1915.)

1. Bills and Jiotes — Negotiable Instruments — Indorser — Presumptions — Holder — Interpretation of Statutes.

One placing bis signature on tbe back of a negotiable paper is deemed an indorser thereof, and under tbe express terms of tbe statute should “clearly indicate by appropriate words bis intention to be bound in some other capacity,” when such exists, in order for him to avail himself thereof as a defense in an action brought by a holder in due course.

2. Bills and Notes — Corporations — Treasurer — Indorser — Presentment for Payment — Dishonor—N otice.

Where the treasurer of a corporation indorses the corporate note, payable at a certain bank, and at its maturity the corporation has no funds at the bank: Held;, it is not necessary, in an action upon the note by a holder in due course against the indorser, that the note should have been presented to the bank for payment, or that the treasurer indorsing it, being fixed with notice of the insolvency of the maker, should have had notice of dishonor.

Appeal by plaintiff from Lyon, J., at tbe April Term, 1915, of Guileokd.

Civil action tried upon these issues:

1. Did tbe defendant place bis signature upon tbe notes sued on as original promisor and not as indorser? Answer: Yes.

2. Were tbe notes sued on properly and legally presented for payment? Answer: N>.

3. Was notice of dishonor and nonpayment given to defendant, as required by law? Answer: Yes.

4. Was presentment for payment waived on tbe part of tbe defendant? Answer: No.

5. Was notice of dishonor and nonpayment waived on tbe part of defendant? Answer: Yes.

6. What, if anything, is tbe defendant due and owing tbe plaintiff because of tbe note due 6 April, 1910? Answer: $130, with interest from 6 April, 1910.

7. What, if anything, is tbe defendant due and owing tbe plaintiff because of tbe note due 6 May, 1910? Answer: $140.75, with interest from 6 May, 1910.

In apt time motion to nonsuit was made and renewed. His Honor reserved bis judgment and submitted tbe issues. After tbe verdict was rendered, be set it aside and granted tbe motion to nonsuit. Plaintiff appealed.

Brooks, Sapp & Williams for the plaintiff.

Thomas O. Moyle for defendant.

BeowN, J.

This action is brought to recover of tbe defendant as indorser on two notes executed by tbe Southern Trading Stamp Company by J. T. J. Battle, payable at tbe Commercial National Bank, and indorsed by said Battle by writing bis-name across tbe back.

Tbe plaintiff undertook to prove by parol evidence that defendant signed as an original promisor and not as an indorser. We suppose by tbe term “original promisor” is meant that defendant signed either as principal or surety, so as to dispense with notice of nonpayment as well as presentation in order to charge him.

We think bis Honor erred in admitting such evidence. Tbe statute (Rev., 2212, 2213) declares that a person placing bis signature upon an instrument, otherwise than a maker, drawer, or acceptor, is deemed to be an indorser, unless be clearly indicates by appropriate words bis intention to be bound in some other capacity. It is so held in Perry v. Taylor, 148 N. C., 362, and Houser v. Fayssoux, 168 N. C., 1.

There is nothing in or on tbe notes sued on which indicates that tbe defendant intended to be charged other than as indorser. Of course, this does not prevent an indorser from showing that bis indorsement was an accommodation indorsement or from showing the relation of indorsers as between themselves.

His Honor erred, however, in sustaining the motion to nonsuit, as well as in instructing the jury to answer the second issue “No.”

There is abundant evidence that the notes were presented for payment to the maker’s office and evidence from which it may be inferred that they were presented at the Commercial National Bank. There is evidence that the maker was utterly insolvent when the notes fell due and had no funds at the bank with which to pay the notes. The defendant was treasurer of the company and is, of course, charged with knowledge of that fact.

Presentment and demand at the specified bank are necessary in order to charge a drawer or indorser in the absence of some good and sufficient reason for failing to make presentment there. One of those reasons is that the maker had no funds at the bank to1 meet the obligation. If the maker of a note, payable at a bank, has no funds in the bank when it falls due, demand of payment there is unnecessary. Sherer v. Bank, 33 Pa. St., 134; 7 Cyc., 988, notes.

The judgment of nonsuit is set aside.

New trial.