Opinion
October 16, 1929.
December 12, 1929.
Non-negotiable instrument — Oral guarantee — Endorsement on back of note — Liability of endorsee — Statute of frauds — Practice — Judgment for want of a sufficient affidavit of defense.
In an action of assumpsit on a non-negotiable instrument, the statement of claim averred that the defendant orally agreed with the plaintiff to guarantee the payment of the loan to be made by the plaintiff to the maker of the note and that the defendant endorsed the note before delivery. It was further averred that the plaintiff made the loan to the maker and that payment was later demanded of him and refused. There was no averment of written evidence of guaranty, except the defendant's signature on the back of the note.
In such case, the statement of claim was insufficient to support a judgment for the plaintiff.
The statute of frauds will prevent a recovery against a person whose name appears on the back of a non-negotiable instrument a collateral contract — where there is no written evidence concerning it except the signature on the back of the note.
Non-negotiable instrument — Demand note — Confession of judgment.
A note payable on demand after date, with authority to enter judgment before demand and maturity is a non-negotiable instrument.
Appeal No. 10, October T., 1929, by plaintiff from order of C.P., No. 2, Philadelphia County, March T., 1928, No. 2841, in the case of The Colonial Trust Company v. Frank B. Morse and J.H. Lorimer.
Before PORTER, P.J., TREXLER, KELLER, LINN, GAWTHROP, CUNNINGHAM and BALDRIGE, JJ. Affirmed.
Action of assumpsit on a non-negotiable instrument. Before LEWIS, J.
Rule for judgment for want of a sufficient affidavit of defense.
The facts are stated in the opinion of the Superior Court.
The court discharged the rule. Plaintiff appealed.
Error assigned was the order of the court.
A.L. Shapiro, and with him Harry Shapiro, for appellant.
Frank A. Harrigan, for appellee.
Argued October 16, 1929.
This suit is on a non-negotiable instrument in the following form as set forth in the statement of claim:
"$2,000.00 Phila., Pa., Dec. 22, 1924.
On Demand after date I promise to pay to the order of The Colonial Trust Co. Two Thousand 00/100 Dollars without defalcation, value received, with interest.
And further I do hereby empower any Attorney of any Court of Record within the United States or elsewhere to appear for me and after one or more declarations filed, confess judgment against me as of any term for the above sum within costs of suit and Attorney's commission of 10 per cent for collection and release of all errors, and without stay of execution and inquisition and extension upon any levy on real estate is hereby waived, and condemnation agreed to and the exemption of personal property from levy and sale on any execution hereon, is also hereby expressly waived, and no benefit of exemption be claimed under and by virtue of any exemption law now in force or which may be hereafter passed.
Witness my hand and seal.
25953 Leonard A. Fay (Seal) Endorsements: Dr. Frank M. Morse c/o Merchants Publicity Bureau J.H. Lorimer Lawrence and Ontario Sts. Leonard A. Fay 302 Peoples Tr. Bldg."
The plaintiff is the payee; the defendant is J.H. Lorimer who wrote his name on the back of the note. The court discharged the rule for judgment for want of a sufficient affidavit of defense on the ground that it raised an issue of fact for a jury.
The statement of claim is insufficient to support a judgment for the plaintiff because it shows that the statute of frauds is a bar to the action. The statement avers that the defendant "orally agreed with the plaintiff" to "guarantee the payment" of the loan to be made by plaintiff to Fay, the maker of the note, and that accordingly defendant "endorsed" the note before delivery and that plaintiff made the loan to the maker; that on June 30, 1926, payment was demanded of the maker and refused and that the refusal was followed by demand on defendant.
As plaintiff concedes that the instrument, payable on demand after date, with authority to enter judgment before demand and maturity, is non-negotiable (Bank v. Beaver, 25 Pa. Super. 494; Hoverter v. Consedine, 82 Ibid 294), the negotiable instruments law (1901, P.L. 194) does not define defendant's obligation as evidenced by the so-called anomalous endorsement. When we turn to the statement of claim for the alleged right of recovery we find an averment of an oral guaranty — a collateral contract — with no evidence in writing concerning it except defendant's signature on the back of the note. It has long been established that the statute of frauds prevents recovery in such case: Schafer v. Bank, 59 Pa. 144; Temple v. Baker, 125 Pa. 634; Alldred's Estate, 229 Pa. 627; Nugent v. Wolfe, 111 Pa. 471, 480. This conclusion makes unnecessary any reference to the affidavit of defendant further than to say that the defect in the statement is not supplied by it.
Judgment affirmed.