Rhoads v. National Bank

Urner, J., delivered the opinion of the Court. A judgment by confession was entered by the Circuit Court for Baltimore County, on March 1st, 1934, in favor of the National Bank of Cockeysville and against Albert E. Rhoads and Elmira E. Rhoads, his mother, on a promissory note, dated April 1st, 1931, and payable on demand, containing a power of attorney for the confession of a judgment on the note at any time after it matured. On November 4th, 1935, Elmira E. Rhoads, the appellant, filed a petition to strike out the judgment. The ground of the petition, as later amended and finally dismissed, and as now urged on appeal, is that the appellant signed the note as indorser and that it should have been presented for payment, and notice of its dishonor given to her, within a reasonable time after its date, as a condition of the liability contracted by her indorsement.

It was alleged in the petition that no such notice was given until some time in February, 1934, nearly three years ¹²⁵ after the note was executed, and that the indorsement is unenforceable because of that delay. In support of the judgment it is argued that the terms of the appellant’s indorsement of the note specifically made her primarily liable for its payment and had the eifect of waiving the presentment and notice which slhe claims to have been requisite. The indorsement, signed both by the appellant and by her son, the maker of the note, was in the following form: “In consideration of one dollar paid to the undersigned and of the making at the request of the undersigned of the loan evidenced by the within note, the undersigned hereby jointly and severally guarantee to National Bank of Cockeysville its successors, endorsees, or assigns the punctual payment at maturity of the said loan and hereby assent to all the terms and conditions of the said note, and consent that the securities for the said loan may be exchanged or surrendered from time to time, or the time of payment of the said loan extended, without notice to or further assent from the undersigned, who will remain bound upon this guarantee, notwithstanding such changes, surrender or extension; and the undersigned further agrees that it or they or any of them, shall be regarded as principals of the within note, as between the undersigned, or any of them, and any holder of this note.” The provision in the note for a confession of judgment was expressly applicable to both the maker and the indorser. In Johnson v. Phillips, 143 Md. 16 , 122 A. 7, 10 , the form of indorsement stipulated that all the provisions of the note should apply to and bind indorsers as though they were makers.

The note included a power of attorney for a confession of judgment. The indorser was held to be amenable to such a judgment jointly with the maker of the note. The court declined in that case to discuss the question whether the party signing the indorsement was a guarantor or simply an indorser, because “the form of the indorsement made him liable to be sued as a maker.” It is not denied that the appellant in this case was subject to the provision in the note for a confession ¹²⁶ of judgment, if she is not to foe exempted from liability upon the ground stated in her petition. The following quotations from the Negotiable Instrument Law (Code, art. 13) are pertinent: “82.

A person placing his signature upon an instrument otherwise than as maker, drawer, or acceptor is deemed to be an indorser, unless he