Keyser v. Warfield

Boyd, J., delivered the opinion of the Court. The appellee sued the appellants’ intestate to recover one-half of the amounts paid by the appellee on two promissory ⁷⁸ notes discounted by the Merchants National Bank of Baltimore. Each of the notes was originally in this form : $2,500.00.. July 31st, 1896.

On demand after date Maryland Mnfg. and Construction Co. promise to pay to the order of.......... twenty-five hundred dollars at Merchants National Bank. Value received. S. Davies Warfield, President. Henry B. Keyser, Treasurer.

Endorsed, S. Davies Warfield, Henry B. Keyser. Mr. Warfield was president and Mr. Keyser treasurer of the Maryland Manufacturing and Construction Company. The two notes were taken to Mr. Thomas, the president of the Merchants Bank, without any security on them. He declined to discount them unless they were endorsed by Messrs.

War-field and Keyser and they signed their names on the backs of them. They were subsequently paid by Mr. Warfield, who sued Mr. Keyser for the one-half so paid by him, and he obtained judgment for $2,836.34. Afterwards Mr. Keyser departed this life and the appellants were appointed administrators of his estate. There are three bills of exception in the record.

The first exception was to the ruling of the Court in permitting the plaintiff, after offering his oral testimony, to insert the name of the Merchants National Bank of Baltimore as payee of the said notes; the second was to- the refusal to grant two prayers offered by the defendant at the conclusion of the plaintiff’s testimony to take the case from the jury, and the third was to the granting of the plaintiff’s prayer and the rejection of the defendant’s 1st, 2nd, 3rd and 4th prayers, offered at the end of'the case. As the defendant proceeded with his testimony after the action of the Court at the conclusion of the plaintiff’s case, the prayers embodied in the second bill of exceptions are not open for review by us. Barabasz v. Kabat, 91 Md. 53 . As the principal question is the effect of the evidence as to whether Messrs.

Warfield and Keyser were joint makers or endorsers (it being conceded that no notice of protest or non-payment of the notes was given), and the prayers' ⁷⁹ involve that, it will be more convenient to first consider the rulings presented by the third bill of exceptions. There have been a number of cases decided by this Court involving what are usually spoken of as irregular endorsements. The liability of such endorser is not determined by the fixed rules of the law merchant, but it depends upon the relation he bears to the instrument and the intention of the parties thereto. 4 Am. & Eng. Ency. of Law, 2 ed. 488; 7 Cyc., 669.

Courts have differed as to the presumption of such endorsements — some had held the signers to be liable as endorsers, others as makers, sureties or guarantors, although the result of each case is largely dependent upon its own particular facts. An early case in this State was that of Sullivan v. Violctt, 6 Gill, 181, in which one who had written his name on the back of a note payable to the plaintiffs or order was held to be liable as maker, but no opinion was filed. In Ives v. Bosley, 35 Md. 262 , the note sued on was payable to the order of Bosley, signed by Elisha J. Guyton, and endorsed in blank by Charles T. Guyton and William M. Ives, the appellant. The plaintiff proved that the signatures were all upon the note when it was delivered to him by E. J. Guyton for the payment of the money which he then loaned to him.

The defendant, Ives, offered to prove that at the time he placed his name upon the back of the note he signed it as endorser Upon objection the Court ruled the testimony inadmissible and that ruling was affirmed. This Court said : “The obligation of I ver, as established by the proof of the plaintiff, is clearly that of an original promisor,” and after stating the facts which are in substance above mentioned, added, “These facts established by conclusion of law the responsibility of Ives as a joint maker or original promisor * * * . It is true as was urged in the argument, that the contract entered into by'a blank endorsement will generally receive such a construction as will give effect to the intention of the parties, and that parol evidence will be admitted to show and explain what liabilities were intended to be assumed at the time of the transaction. * *, * If, however, the contract set up is differ*. ⁸⁰ ent from that which attaches by presumption of law, it must be established by proof, showing that both parties, promisor and promisee, so intended and agreed.” After quoting from Rey v. Simpson, 22 How. 341 , the Court added,: “Applying these principles to the present case, it is clear that the defendant cannot avoid the liability of a joint promisor, which the law has attached to his blank endorsement, unless he proves a different understanding of all the parties.” That case was followed in Walz v. Alback, 37 Md. 404 ; Owings v. Baker, 54 Md. 82 ; Schroeder v. Turner, 68 Md, 506; Gisriel v. Burrows, 72 Md. 366 ; Thompson v. Young, 90 Md. 75 , and other cases. In those cases the names of the payees were in the notes, all of the signatures were on them before they were delivered to the payees, and the parties were held liable as joint makers, excepting in Owings v. Baker, and Gisriel v. Burrows, where the testimony showed that it was the understanding and agreement of all the parties to the notes that those writing their names on the backs should only be held to the liability of endorsers.

In Sittig v. Birkestack, 38 Md. 158 , the form of the note sued on differed from those in the above-mentioned cases in that the name of the payee was left blank. It was signed by H. Austermuhle, and on the back were the names of Catharine Austermuhle, Henry Sittig and Henry Birkestack. The latter was the holder and had loaned H. Austermuhle the money represented by the note. The case had been previously tried and the judgment then obtained by the plaintiff was reversed by this Court and a new trial awarded, as is shown by the report of the case in 35 Md. 273 .

At the first trial the attorney for Birkestack, the holder, inserted his name as payee.' In speaking of that in 38th Maryland the Court said: “The question whether the appellant signed his. name on the note as maker was submitted to the jury by the instructions granted and conceded; and if that was the nature of the contract between the parties, the appellee as holder of the note, acting in good faith, had authority to insert his name as payee.” In Dunham v. Clogg, 30 Md. 284 , the note was ⁸¹ payable to blank order and given by the maker to one, G. D. Vaughn. The blank was filled by making it payable to the order of Stetson Vaughn, who before maturity endorsed it and the plaintiff in that case became the owner. In the course of the opinion it was said: “In the absence of fraud, the appellee having signed the note, leaving a blank for the name of the payee, the holder could fill the blank with his own name, and endorse it in blank as it was payable to order, which would give it currency, by simple delivery, and the possession of it in such case would be prima facie evidence of title, enabling the holder to sue in his own name. The same effect is given to the note, under such circumstances, as if it had been made payable to bearer.” In Boyd v. McCann, 10 Md. 118 , it was said that the holder of a note payable to blank order could fill it up with his own name as payee and other cases might be cited to show how such a note is regarded in this State.

So far as the prayers are concerned (which we are now considering), we do not think the fact that the name of the payee in these notes was left blank distinguishes this case from those of Ives v. Bosley and others above cited. While the bank was the holder of the notes it undoubtedly had the right to insert its own name as payee, if there was no understanding to the contrary, and we do not see why the principles announced in Ives v. Bosley are not as applicable to notes held by the bank in which it had the right to insert its-name, as if it had been actually so inserted. The plaintiff’s prayer, which was granted, submitted to the jury to find amongst other things that the defendant presented the notes to Mr'. Thomas, the president of the bank, “and