Opinion
March 8, 1939.
1. BILLS AND NOTES: Indorser: Waiver. Waiver is an intentional relinquishment of a known right.
Implied waiver by the indorser of a negotiable instrument of presentment and notice of dishonor must be a clear, unequivocal, decisive act showing such purpose, or acts amounting to an estoppel.
2. BILLS AND NOTES: Indorser: Waiver. Where a claim was presented in the probate court against the estate of the indorser of a negotiable note, evidence of statements of the indorser that he would make arrangements to take care of the note, when he could arrange other matters, such general statements, where the witness did not undertake to say what was actually said by the indorser, were not substantial evidence to show a waiver of presentment and notice of dishonor.
Appeal from Circuit Court of City of St. Louis. — Hon. J.W. McAfee, Judge.
REVERSED.
H.A. and C.R. Hamilton for appellant.
(1) The obligation of an indorser is conditional, and to render him liable for the payment of a note the note must be presented to the maker for payment on the day it falls due and at the place specified in the instrument for payment. Notice of dishonor must be given to the indorser. R.S. 1929, secs. 2698, 2699, 2700, 2701, 2711, 2717, 2731. (2) To make a prima facie case against an indorser, plaintiff must allege and prove presentment for payment and notice of dishonor as required by law, and in the absence of such proof judgment must go in favor of the indorser. Jaccard v. Anderson, 32 Mo. 188; Jamison v. Copher, 35 Mo. 483; Faulkner v. Faulkner, 73 Mo. 327; Nevius v. Moore, 221 Mo. 330; Home Trust Co. v. Josephson, 95 S.W.2d 1148; Mechanics Sav. Inst. v. Finn, 1 Mo. App. 36; Long v. Todd, 207 Mo. App. 496; Lynes v. Holt Taylor Merc. Co., 268 S.W. 702. (3) A waiver is an intentional relinquishment of a known right. The intention to waive is the essential element of a waiver. Schwab v. Brotherhood of Am. Yeomen, 305 Mo. 148; Wolf v. Shulz Folding Box Co., 44 S.W.2d 866; Howe Scale Co. v. Geller, Ward Hasner Hdw. Co., 285 S.W. 141; Springfield Security Co. v. Boren, 275 S.W. 566; Brix v. Fidelity Co., 171 Mo. App. 518; Danville Lbr. Mfg. Co. v. Gallivan Bldg. Co., 177 N.C. 103. (4) A waiver of presentment and notice of dishonor, being in derogation of the statutory right of the indorser, will not be implied from doubtful acts or language of an indorser, but must be evidenced by some act or conduct of an unequivocal character. 3 R.C.L., p. 1239, sec. 464; 8 C.J., pp. 699-700, sec. 983; January v. Todd, 1 Mo. 567; Faulkner v. Faulkner, 73 Mo. 327; Orthwein v. Nolker, 290 Mo. 284; Ladd v. Anderson, 89 S.W. 1041; Freeman v. O'Brien, 38 Iowa 406; Isham v. McClure, 58 Iowa 515; Porter v. Moles, 151 Iowa 279; McMillan v. Montgomery, 121 Or. 28, 253 P. 879; Colbath v. Stebbins Lbr. Co., 127 Me. 406, 144 A. 1; Rice v. Fidelity Deposit Co., 103 F. 427, 43 C.C.A. 270; Johnson Co. v. Nevada Packard Mines Co., 272 F. 291; Isom v. Johnson, 205 Ala. 157; Parsons, Rich Co. v. Lane, 97 Minn. 98. (5) Waiver is a question of intention and is to be found as a fact by the jury from evidence tending to prove the intention to waive and cannot be declared by the court, unless the evidence shows an intention to waive so conclusively as to make the inference of waiver inevitable. Minor v. Edwards, 12 Mo. 137; Workingmen's Banking Co. v. Blell, 57 Mo. App. 410; Fairbanks, Morse Co. v. Baskett, 98 Mo. App. 53; Laumeier v. Hallock, 103 Mo. App. 116; Exchange Bank v. Thuringia Ins. Co., 109 Mo. App. 654; Compton Heights Laundry Co. v. General Auto Corp., 195 Mo. App. 313; Porter v. Moles, 151 Iowa 279; Ranchmen's State Bank v. Cooper, 123 Kan. 21; Garrett v. Neitzel, 48 Idaho, 727; Colbath v. Lumber Co., 127 Me. 406; Whipple v. Prudential Ins. Co., 222 N.Y. 39; Southwest Cotton Co. v. Valley Bank, 26 Ariz. 559.
James J. Seeley and Claudio Delitala for respondent.
Presentment for payment and notice of dishonor may be waived by an indorser and the waiver may be express or implied, and where the facts and circumstances relating to waiver are clearly established, waiver becomes a question of law. Therefore, Instruction 1 is not erroneous in failing to require a finding as to whether the facts hypothecated therein constituted a waiver. R.S. 1929, secs. 2709, 2737; Wilson v. Huston, 13 Mo. 146; Yeager v. Farwell, 20 L.Ed. 476, 13 Wall. 6; Belch v. Roberts, 191 Mo. App. 243, 177 S.W. 1062; Orthwein v. Nolker, 290 Mo. 284, 234 S.W. 787; Sigerson v. Mathews, 61 U.S. 496, 20 How. 496, 15 L.Ed. 989; Hay v. Banker's Life Co., 207 Mo. App. 277, 231 S.W. 1035.
Action originating in the Probate Court of the City of St. Louis. On October 4, 1934, the Wall Investment Company filed a claim in said court against the estate of Wm. M. Schumacher, deceased. The claim had for its foundation Schumacher's endorsement of a note. The probate court denied the claim and the company appealed to the circuit court. On a trial in said court judgment was for the plaintiff company for $11,780, which included interest. Defendant appealed.
It is not claimed that the owner of the note either made demand of the maker for payment or that notice of nonpayment was given to Schumacher. The only question for review is whether or not there was substantial evidence tending to show that Schumacher waived presentment for payment and notice of dishonor as required by law. The rule may be stated as follows:
"A waiver is an intentional relinquishment of a known right. To make out a case of implied waiver of a legal right, there must be a clear, unequivocal, and decisive act of the party showing such purpose, or acts amounting to an estoppel on his part. [First National Bank v. Maxwell, 123 Cal. 360, 55 P. 980, 69 Am. St. Rep. 64; Kilpatrick v. Railroad, 38 Neb. 620, 57 N.W. 664, 41 Am. St. Rep. 741; Viele v. Insurance Co., 26 Iowa 9, 96 Am. Dec. 83; Swedish American Natl. Bank v. Koebernick, 136 Wis. 473, 117 N.W. 1020, 128 Am. St. Rep. 1090.] It has been said that the law of waiver is a `technical doctrine introduced and applied by courts for the purpose of defeating forfeitures.' It has also been said that in insurance cases the courts are inclined to grasp any circumstances which indicate an election to waive a forfeiture, although insufficient to create a technical estoppel. But, even in insurance cases, the intention to waive must plainly appear, or else the acts or conduct relied upon as constituting waiver must involve some element of estoppel." [Schwab v. Brotherhood of American Yeomen, 305 Mo. 148, l.c. 155, 264 S.W. 690.]
"To constitute a waiver, there must be an intention to relinquish the right, or there must be words or acts calculated to induce the other contracting party to believe, and which deceive him into the belief, that the holder of the right has abandoned it; and the party deceived must have acted on his belief, so that an assertion of the right will inflict upon him a loss he would not have sustained if its holder had not appeared to relinquish it." [Rice v. Fidelity Deposit Co., 103 F. 427, l.c. 435.]
The facts follow: On November 15, 1928, Schumacher endorsed a note for $15,000 and six semi-annual interest notes, each for $450. They were secured by a deed of trust on real estate in St. Louis valued, at the time of the endorsements, at $25,000. The first four interest notes were paid by the maker but default was made in the payment of the fifth interest note due May 15, 1931. On July 24, 1931, James C. Seeley, an attorney, wrote a letter to Schumacher in which he stated that the writer represented the Wall Investment Company, who owned the principal note and the unpaid interest notes. In said letter he made demand for payment of said interest note by Schumacher, who did not answer the letter. At the time of the trial in the circuit court, Schumacher was not living, and the only testimony in the case on the question of waiver was the testimony of Mr. Seeley, who testified that after writing said letter he had a conversation with Schumacher at the office of the Wall Investment Company, with reference to the matter. He further testified on the question as follows:
"I discussed with Mr. Schumacher the unpaid interest note of $450, and he stated to me, at that time, that he was not in a position to pay this note, but that he would be able to do so later.
"By the COURT (Q.): What do you mean by this note? A. I am speaking now of Plaintiff's Exhibit B.
"By MR. DELITALA (Q.); What is the interest note? A. That is the interest note of $450. At that time I further questioned Mr. Schumacher, in view of the fact that an interest note was not being paid, I further questioned him about the payment of the principal note for $15,000, which would be due in November, and he stated that he would make arrangements to take care of it by that time. That was the nature of the conversation, the general nature of it." (Italics ours.)
Thereafter and on October 10, 1931, the Wall Investment Company caused the deed of trust on the real estate securing the notes to be foreclosed for nonpayment of the fifth interest note, and at the sale the property was bid in for $5500. Of course, this amount paid the fifth and sixth interest notes and the balance was endorsed as a credit on the principal note.
After said foreclosure and on November 2, 1931, Mr. Seeley wrote another letter to Schumacher in which he again stated that he represented the owner of the notes; that the deed of trust had been foreclosed; that there was due $11,230.93, including interest and delinquent taxes for the years 1929 and 1930, and demanded that Schumacher pay the balance due on the principal note. This letter also was not answered by Schumacher. Mr. Seeley testified with reference to this letter as follows:
"Q. Did you have some other conversation with Mr. Schumacher subsequently? A. Yes; after the property had been foreclosed I wrote Mr. Schumacher another registered letter, calling attention to the foreclosure, and requesting the payment of the balance due on the notes, and that conversation I had subsequently, it was some time in November of '31, or the first part of December, 1931, I don't recollect, it was out at his undertaking establishment on Natural Bridge Road.
"Q. Can you state what the nature of that conversation was? A. In that conversation I reviewed, with Mr. Schumacher, the fact that the notes which he had previously told me he would take care of had not been paid and foreclosure was necessary, and had been accomplished, and I asked him then for the payment of the balance on these notes, and he told me then that he was having some difficulty with financing, and he had an apartment house on Pine Street that he was about to lose, and he also referred to some money that he owed to an aunt of his, or a relative, and stated that as soon as these matters were straightened out he expected, and would take care of this obligation. Those were the two conversations, and the two places where I discussed the matter with Mr. Schumacher."
It should be stated that the trial below proceeded on the theory that the principal note matured before the conversations with Schumacher.
Plaintiff company argues that the statements of Schumacher that "he would make arrangements to take care of it by that time" and that he "would take care of this obligation," is substantial evidence tending to show that he waived presentment and notice of dishonor. We do not think so. The said statements are of doubtful meaning. By them he may have intended to state only that he would make arrangements to take care of his conditional obligation as endorser of the note. Furthermore, there was no evidence tending to show that Schumacher, by either word or act, caused the company to dispense with the presentment and notice of dishonor required by law to fix the liability of an endorser. Furthermore, Mr. Seeley testified only to the general nature of the statements made by Schumacher. In other words, he did not undertake to state what was actually said by Schumacher during the conversations with reference to the notes. There was no substantial evidence tending to show that presentment and notice of dishonor were waived. [January v. Todd, 1 Mo. 567; Faulkner v. Faulkner, 73 Mo. 327; Orthwein v. Nolker, 290 Mo. 284, 234 S.W. 787; Ladd v. Anderson (Tex. Civ. App.), 89 S.W.2d 1041; Freeman v. O'Brien, 38 Iowa 406; Isham v. McClure, 58 Iowa 515; Porter v. Moles, 151 Iowa 279; McMillan v. Montgomery, 121 Or. 28, 253 P. 879; Colbath v. Stebbins Lbr. Co., 127 Me. 406, 144 A. 1; Rice v. Fidelity Deposit Co., 103 F. 427, 43 C.C.A. 270; G.S. Johnson Co. v. Nevada Packard Mines Co., 272 F. 291; Isom v. Johnson, 205 Ala. 157; Parson, Rich Co. v. Lane, 97 Minn. 98.]
Plaintiff cites cases as follows: Wilson v. Huston, 13 Mo. 146; Yeager v. Farwell, 20 L.Ed. 476, 13 Wall. 6; Belch v. Roberts, 191 Mo. App. 243, 177 S.W. 1062; Orthwein v. Nolker, 290 Mo. 284, 234 S.W. 787; Sigerson v. Mathews, 61 U.S. 496, 20 How. 496, 15 L.Ed. 989; Hay v. Bankers' Life Co., 207 Mo. App. 277, 231 S.W. 1035. Those cases are distinguishable on the facts.
The judgment should be reversed. It is so ordered. All concur.