Opinion
No. 35705.
Filed October 23, 1964.
1. Bills and Notes. Presentment for payment is not necessary in order to charge the person primarily liable upon a promissory note. 2. Guaranty. Where a guaranty agreement contains an absolute promise to pay the debt of another upon written demand, the petition satisfied the requirement of a written demand and the plaintiff is not required to allege or prove a written demand. 3. Appeal and Error. A litigant may not change his position in this court and set up issues not raised in the trial court.
Appeal from the district court for Douglas County: PATRICK W. LYNCH, Judge. Affirmed.
Webb, Kelley, Green Byam, for appellants.
Crawford, Garvey, Comstock Nye, for appellee.
Heard before WHITE, C.J., CARTER, MESSMORE, YEAGER, SPENCER, BOSLAUGH, and BROWER, JJ.
This is an action at law to recover amounts due the plaintiff, Arthur Fulmer St. Louis, Inc., for merchandise sold to the defendant, Auto-Re-Nu-Inc. The defendant, James D. Borland, Jr., is the president of Auto-Re-Nu-Inc. The defendant, M. J. Flannigan, is a stockholder of Auto-Re-Nu-Inc.
The first cause of action arose out of a $12,000 order sold to Auto-Re-Nu-Inc., on or about April 1, 1961. As a part of this transaction Auto-Re-Nu-Inc., and Borland and Flannigan executed separate promissory notes payable in installments. There was a balance due on these notes of $8,000 with interest.
The second cause of action was for the balance due the plaintiff for merchandise sold to Auto-Re-Nu-Inc. on open account after April 1, 1961. Borland and Flannigan had executed separate written guaranty agreements which provided that if invoices to Auto-Re-Nu-Inc. from the plaintiff were not paid when due, Borland and Flannigan would pay them "on receipt of written demand therefor." The balance due the plaintiff on open account was $3,275.26 with interest.
The jury returned a verdict for the plaintiff and against all defendants on both causes of action. The defendants' motion for new trial was overruled and they have appealed.
The assignments of error relate to the plaintiff's failure to plead and prove written demand upon the promissory notes and guaranty agreements and a contention that the promissory note of Auto-Re-Nu-Inc., referred to in the first cause of action, contained words of cancellation upon its face. These are the only matters which need to be considered by this court in disposing of the appeal.
The liability of each defendant to the plaintiff upon the promissory notes was that of a maker. Presentment for payment is not necessary in order to charge the person primarily liable upon a promissory note. 62-170, R.R.S. 1943. Furthermore, the notes provided that demand was expressly waived by all makers and guarantors. Thus, the plaintiff was not required to plead or prove any demand upon the promissory notes.
The guaranty agreements signed by Borland and Flannigan each provided as follows:
"* * * I hereby guarantee to you payment of all sums which shall hereafter become due to you for invoices for merchandise sold to Auto-Re-Nu-Inc. — Omaha — Nebraska, and I further agree that if said invoices shall not be paid when due I will pay same promptly on receipt of written demand therefor."
There is no issue in this case with respect to notice of default. Borland and Flannigan do not contend that they did not have notice of the failure of Auto-Re-Nu-Inc. to pay its invoices when due or that they should be released from liability because they were damaged by a failure of the plaintiff to give notice of default within a reasonable time.
The issue here is whether the plaintiff was required to allege and prove a written demand upon Borland and Flannigan because the contract contained an express provision for written demand. The defendants rely upon First Nat. Bank of Waterloo v. Story, 200 N.Y. 346, 93 N.E. 940, 34 L.R.A. N.S. 154, 21 Ann. Cas. 542, which held that a demand is necessary to enforce a collateral promise to pay the debt of another where the agreement is to pay upon demand.
The guaranty agreement involved in this case was an absolute promise to pay the amounts due the plaintiff for merchandise sold to Auto-Re-Nu-Inc. A written demand made simultaneously with the filing of the action would be a full compliance with the written demand requirement of the guaranty agreement. In such a situation we believe that the better rule is that the petition of the plaintiff satisfies the requirement of a written demand and that the plaintiff is not required to allege or prove a written demand. See Texas Water Supply Corp. v. Reconstruction Finance Corp., 204 F.2d 190.
The last assignment of error refers to the notation, "Void 4-13," which appears in the lower margin of the promissory note of Auto-Re-Nu-Inc. The defendant Auto-Re-Nu-Inc. contends that the notation amounted to a cancellation and that the plaintiff cannot recover upon the note in the absence of proof that the cancellation was inoperative.
The notation appears to have been made with a pencil and the marking is very faint. The notation appears at the extreme lower edge of the document, and it is doubtful whether it could be considered to be a cancellation of the instrument.
Auto-Re-Nu-Inc. made no contention in the trial court that its promissory note had been canceled. Its answer admitted the execution of both promissory notes as alleged by the plaintiff and alleged that the promissory note and guaranty agreements executed by Borland and Flannigan were "in fact secondary to and in guaranty of the purported obligation of this answering defendant." This allegation is binding upon Auto-Re-Nu-Inc., and it cannot now contend that its note was canceled. A litigant may not change his position in this court and set up issues not raised in the trial court. Maryland Casualty Co. v. Munnelly, 172 Neb. 827, 111 N.W.2d 772.
The judgment of the district court is correct and it is affirmed.
AFFIRMED.