262
vol. 39.
aright of action against tlle. conspira,tors independent of-the drafts. U. S. v. National Park Bank, 6 Fed. RElP. &52. After a diligent search no authority has been found where a recovery has been refused upon the facts here presente4. Two .are repqrted in: which the defendant. C Rep .. 357, and U. S. succeeded. U. S. v. . linton Nat. Bank, 28 v. Centra.l Nat. BQm.k,6 Fed. Rep. 134. / But in the former. case there was a delay of 12 years.in giving notice after knowledge of the forgery, and in the latte;rca,se was no notice of any kind. The motion to set aside theveedict i!3 denied. is entitled to judgment for $1,924.80, and inteNst 15, 1884.
COFFIN
v.
SPENCER
et al.
(Oircuit Oourt, D. Indiana.
July 20,1889.)
NEGOTIABLE INSTRUMENTS:- NEGOTIABILl'ry':":'" CERTAINTY AS TO TIME OF PAYMENT.
A promissory note' stipulated that "the payee or holder of this note may renew or extend the ·time of payment of the same froIl\ time .to time as often as required, without notice, anclwithout prejudice to the rights of such payee or holder to enforce payment against the makers, sureties, and indorsers, and each of them, partieEihereto, at any time, when the same may be due and payable." Held, that the note was not negotiable.
At Law. On demurrer to anSwer. The action is upon an ,fnstrument qf. the following' tenor: RICHMOND, Sept. 15t1l,1884. "$1,941.58. "Four months after datel promise to pay to the order of Turner W. Haynes, nineteen hundred and forty-on!3. 58-100 dollars, at the First National Bank of Richmond, Indiana, value received, without any relief from valuation or appraisement laws, with interest at the rate of eight per cent. per annum after maturity, and five per cent. attorney's fees. The drawers and indorsers severally waive presentment for payment, protest, and notice of protest, and non-payment of this note. And the payee or holder of this note may renew or extend the time of payment of the same from time to time, as often as required, without notice, and without prejudice to the rights of such payee or holder to enforce payment against the makers, sureties, and indorsers, and each of them, parties hereto, at any time whlln the Bame may be due and payable. WILLIAM F. SPENCER. "Indorsed: F. 'V. HAYNES." If this is a promissory note negotiable as by the law-merchant, the defense alleged, it is conceded, is not good; but, if the paper is 11on. negotiable, the answer is sufficient. Burchenal &- Rupe, for plaintiff. D. M. Bradbury and Fox &- Robbins, for defendants. WOODS, J., (after stating theJacts as above.) The question presented is whether or not the instrument sued upon is a negotiable promissory note,
COFFIN: ". SpENCER.'
263
and the solution of the question depends upon the meaning and force of the stipulation for renewal orextensioh of tii-ne of payment, which it is claimed makes the time of payment or maturity uncertain. The stipulation is in these words: "And the paj'ee or. holder of this note mllY renew or extend the time of payment of the same from time to time, as often as required" without notice, parand without prejudice to the rights of such payee or polder to ment against the makers. sureties, and indorsers. and each of them, parties hereto, at ·any time, when the same m,ay: be due and payable." By transposition of the italicized Clattsetwo readings, quite different in effect, are possible, as fol.lows: (1)" And the payee or holder of this note, when the .sf-Lme may be dne and payable, may renew or extend the time of payment from time to time," etc.; or, (2) "And the payee or holder of this note may renew or extend the time of payment, etc., without prejudice to the rights of such payee or holder, :when the same is due and payable, to enforce judgment against the makers, sureties, and indorsers, and each of them, parties hereto." The .latter I think the true reading, and it means that at any time before or after the maturity of the note by its terms or by the terms of any agreement for renewal or extension, the holder, whether the payee or any assignee, may by agreement with the maker, or with an indorser or other party liable on the paper, renewal' extend the date of payment, "from time to time," that is to say, definitely, without prejudice ultimately to his remedies against any of the parties. Every successive taker of the paper is, of cOlirse, bound to take notice of this stipulation, and, instead of looking only to the fa<;e of the instrument for the time of its :maturity, as in case of commercial paper he must, is put upon inquiry whether or not any agreement for a renewal or extension of time has been made by his proposed assignor or by any previous holder. "A bill of exchange always implies a personal general credit, not limited or applicable to particular circumstances and events, which cannot be known to the holder of the bill in the general course of negotiation." Story, Bills, § 46. And in Hartley v. WilkiTUJon, 4 Maule & S. 25, Lord ET,LENBOIWUGH says: "How can it be that this note is a negotiable instrument for the payment of money absolutely, when it is apparent that the party taking it must inquire into an extrinsic fact in order to ascertain if it be payable." See, also, Insurance ,Co. v. Bill, 31 Conn. 534. The note in suit, it seems clear enough, cannot be deemed negotiable. It follows that the. third paragraph of uliswer is good, and the demurrer thereto should be overruled; and, I suppose, too, that the complaint fails to show jurisdiction of this court over the parties, in that the payee and indorser of the:note, being a citizen ot this state, and not entitled to have sued in this court,the assignee cannot. And for this reason the demurrer might be ca.rried back, and sustained to the complaint.
264
In re
WATIES
& Co. et al.
Ex parte
CHICK
(Di8triet Oourt, D. South Oarolina. June 22, 1889.) BANKRUPTcv-PnEFERREDCLAIMS-WAGES OF LABORERS.
In computing the time under Rev. St. U. S. 5101, Riving priority to the wages of operatives, clerks, etc.,' to the amount of $50, 'for labor performed within six. months next preceding the publication of the notice of proceedings in bankruptcy," the period intervening between the institution of the proceedings and the final adjudication is to be disregarded.
In Bankruptcy. Report on final dividend. Clark & MuUer, for assignee. John Bauskett, for petitioners. SIMONTON, J. A petition, in involuntary bankruptcy was filed against John Waties & Co. on 26th October, 1875. The registrar, before whom the case was brought, granted the prayer of the petition. His ruling was E:et aside by the district judge. The circuit court, reviewing the matter, revised the decree of the district court, and the firm were adjudicated bankrupts on 8th February, 1877. The estate has been administered and a scheme {or final dividend made. The petitioners except to the scheme prepared by the registrar on the ground that they were operators and clerks of the bankrupts within the period of six months before the institution of the proceedings in bankruptcy, and as such entitled to a preference to the estate of $50 each, and that this has not been allowed to them by the registrar. Section 5101, Rev. St. provides: In the order for a dividend the following claims shall be entitled to priority, and to be first paid in full in the following order: (1) Fees and costs of the proceedings; (2) debts to the United States; (3) debts to the state; (4) wages due to any operator, clerk, or house servant to an amount not exceeding $50 for labor .performed within six months next preceding the first publication of the notice of proceedings in bankruptcy. Under a literal application of this provision the petitioners could have no claim. The first puhlication of the notice of the proceedings in bankruptcy was made after the adjudication in February, 1877, 16 months after petition filed instituting the proceedings. Indeed, a literal application of the provisions of this subdivision would exclude similar charges in very many cases of involuntary bankruptcy, certainly in all contested cases. Between the filing of the petition and the final decision in contested cases six months will frequently elapse. When it is considered that these claims are highly favored by the act, being in the same category with the expenses attending the proceedings, and with debts due the public, coming next after these last, a construction making them a dead letter in so many instances cannot be the correct one. Proceedings in involuntary bankruptcy generally come on the respondents suddenly, and without warning. No time is given for preparation. The business is