Linthicum v. Bagby

Urner, J., delivered the opinion of the Court. The essential question in this case is whether there is legally sufficient evidence to support- the theory that notice of dishonor of the promissory notes in suit was impliedly waived by the indorser. The notes sued on are four in number and the total of the balances of principal and interest they represent is $6,832.27. They were the last in their respective series of many renewal notes given in the course and settlement of the maker’s transactions, as a poultry merchant, in the purchase of supplies from the plaintiff firm through a period of fifteen years.

For the current indebtedness contracted in such purchases promissory notes would be given or renewed at the settlement periods for such amounts as the state of the accounts between the parties would require. All of the notes, original and renewal, were indorsed by the maker’s mother, who died sometime after the last renewal notes were given, and whose personal representative is the defendant in this action. In no instance did the plaintiffs give notice to this indorser of the non-payment of a note, but the renewals were invariably delivered with the same indorsement at or shortly after the maturity of the notes they were to supersede. Sometimes a week would elapse after the maturity of a note before the renewal would be delivered.

"\yhen presented to the payees ⁶⁴⁶ with the customary indorsement the notes would be in blank and the amount would be inserted by either the maker or the payees after it had been ascertained from the accounts. No communications passed between the payees and the indorser in regard to any of the notes. The indorser entrusted the notes to her son, the maker, occasionally six or seven of them at a time with her signature placed on them while they were blank, and he was thus enabled to make use of them as needed in his settlements with the payees. The inquiry is whether such conduct on the part of the indorser, continued without variation through the long course of her son’s dealings with the plaintiffs, and involving the indorsement of approximately one hundred original and renewal notes affords a sufficient legal basis upon which to predicate an implied waiver of the notice of presentment and dishonor which would ordinarily be requisite for the enforcement of the indorser’s liability.

The Negotiable Instruments Act (Code, Art. 13, sec. 128) provides: “Notice of dishonor may be waived either before the time of giving notice has arrived or after the omission to give due notice and the waiver may be express or implied.” This provision is declaratory of a well settled principle of the common law. Schwartz v. Wilmer, 90 Md. 141 ; Turnbull v. Maddux, 68 Md. 587 ; Seldner v. Mount Jackson Nat. Bank, 66 Md. 488 . A waiver of notice of dishonor may be implied by any conduct or words of the indorser by which the holder of the note is reasonably induced to believe that such waiver was intended.

In 8 C. J. 699, it is said that the waiver “may result from implication and usage or from any words or acts which by fair and reasonable construction are of such a character as will satisfy the mind that a. waiver was intended, or which will justify the holder in assuming that the indorser intended to dispense with notice, or to induce the holder to forego the usual steps necessary to fix the liability of the indorsers.” The principle is stated to the same effect in 3 B-. ⁶⁴⁷ C. L. 466, p. 1240, and in Worley v. Johnson, 33 L. R. A. (N. S.) 639. In this case a long and definite course of dealing, had established a regular system of