Opinion
Appeal from the District Court of the Ninth Judicial District, Butte County.
COUNSEL:
Cited Story on Promissory Notes, §§ 271, 272, 289, 292; Prac. Act, § 175; Creamer v. Perry, 17 Pick. 334.
R. S. Mesick, for Appellants.
Jos. E. N. Lewis, for Respondent.
Cited Lovell v. Evertson, 11 Johns. 57; Nelson v. Dubois, 13 Ibid. 175; Hunt v. Adams , 5 Mass. 338; 3 Ibid. 274; Sumner v. Gray, 4 Pick. 312; Story on Bills, 316; Story on Prom. Notes, 333-335, 457; 3 Kent's Com. 114; Mead v. Small, 2 Greenl. 207; Bank v. Griswold, 7 Wend. 165; 13 Barb. 163; Bond v. Farnham , 5 Mass. 170; 5 Pick. 436.
JUDGES: Heydenfeldt, J., delivered the opinion of the Court. Murray, C. J., concurred.
OPINION
HEYDENFELDT, Judge
Suit against makers and indorsers of a note. The indorsers rely upon want of demand and notice. This defence is replied to with the assertion that the maker placed in the indorsers' hands property which they sold and turned into money.
The facts as found by the special verdict of the jury, are:
1. That the maker was indebted to the indorsers in various sums, and the latter were also their accommodation indorsers on this note
2. The maker turned over property to the indorsers as general security, without any direction as to the application of the proceeds.
3. The property was insufficient in value to pay the debts including this note.
4. There was no demand upon the maker, and no notice of non-payment to the indorsers.
Where payment by the maker to the indorser is relied upon as an excuse for want of demand and notice, it must be a payment directly and specifically for the note, and not as security for all transactions in the aggregate. The makers, in this case, did not specify that the payment to the indorsers was to meet this particular note, and it therefore results that the indorsers had a right to apply the fund to any indebtedness they held against the maker, and further, to stand upon their strict legal rights as to demand and notice in regard to the note in suit.
It follows from this view that the judgment is erroneous, and must be reversed.