
    William B. Bird and Others, Respondents, v. Joseph W. Kay, Appellant.
    
      Indorser of a note —facts constituting a waiver of notice of protest must be pleaded — agreement by an indorser to treat it as his own paper and see that it was paid.
    
    Evidence tending to show that the indorser of a promissory note waived presentment and notice of protest is not admissible in an action brought to charge him upon his contract of indorsement, unless the facts constituting the alleged waiver are alleged in the complaint.
    An allegation in the complaint that the indorsement was made with intent to give credit to the maker of the note, and that the note was delivered and accepted upon the faith of the indorsement, does not entitle the plaintiff to prove, for the purpose of establishing such a waiver by the indorser, that the note was accepted upon the indorser’s promise to treat it as his own paper and see that it was paid at maturity.
    
      Semble, that such promise, when made before the note was indorsed, was merged in the contract of indorsement.
    Appeal by the defendant, Joseph W. Kay, from a judgment of the Supreme Court in favor of the plaintiffs, entered in the office of the clerk of the county of ISTew York on the 13th day of March, 1899, upon the verdict of a jury, and also from an order entered in said clerk’s office on the 10th day of March, 1899, denying the defendant’s motion for a new trial made upon the minutes.
    
      John W. Boothby, for the appellant.
    
      John S. Melcher, for the respondents.
   Rumsey, J.:

The action was upon a promissory note made by one Cavendy, to his own order and indorsed by him and also by the defendant, and the plaintiffs seek to charge the defendant by reason of his liability as indorser of the note. The allegation of the complaint was that Cavendy “ endorsed the same, and thereupon the defendant endorsed the same, and after said endorsement by the defendant said note was delivered by said Cavendy, and thereafter, and before maturity, * * * came into the possession of these plaintiffs.” The complaint contained a further allegation that the indorsement by the defendant was made with the intent to give credit to the maker of the note, and that the note was delivered and accepted upon the faith of such indorsement, and that the plaintiffs took the note relying upon the indorsement of the defendant. The complaint then contained the usual allegations that the note was duly presented for payment at the place where, by its terms, it was payable; that payment was refused, and that thereupon the note was duly protested for non-payment, of all of which due notice was given to the defendant.

The answer denied that the defendant had notice of the presentation or protest for non-payment of the note. It alleged that the note was given for the accommodation of Cavendy without any consideration, and denied any knowledge or information sufficient to form a belief as to whether the plaintiffs took the note relying upon the defendant’s indorsement. It alleged, further, that the note was given to enable Cavendy to carry out a contract between himself and the Koal-Spar Company, and for no other purpose, and that it was so delivered.

Dp on the trial the plaintiffs proved the making of the note and its indorsement by the defendant, and that it was delivered to the plaintiffs before it was due by one Tarbel. The note was presented for payment and protested, but it was conceded that notice of protest was never given to the defendant. The testimony of Tarbel was then offered, by which the plaintiffs proposed to show that on the day on which the note was indorsed, and before it was signed or indorsed, Tarbel, who was the president and owner of the KoalSpar Company, had a conversation with Kay to the effect that Kay wanted him to accept the note as the payment of the purchase price of a quantity of kcal-spar, and that if Tarbel would accept it Kay would indorse it and would treat it as his own paper, and would see that it was paid at maturity; and that he did consider it as his own obligation, and that Tarbel was taking payment in this form as a matter of accommodation to Kay, so that while Kay was, in fact, the principal, it might not so appear on the face of it. This evidence, before it was given, was objected to by the defendant as immaterial, irrelevant, incompetent and inadmissible under the pleadings. The objection was overruled and the testimony was received under the defendant’s exception. After it had been read under objection the defendant moved to strike out so much of it as tended to show an agreement on the part of Kay to be bound absolutely by the indorsement, because it was not competent by paroi ■evidence to vary the contract of indorsement. The motion was denied and defendant excepted. At the close of the plaintiff’s case, and again at the close of the testimony, a motion to dismiss the complaint was made by the defendant upon the ground, among others, that the defendant had not been properly charged as indorser ■of the note, for the reason that the plaintiffs had failed to show that notice of the protest of the note was served upon him. This motion was denied. The defendant contradicted the testimony of Tarbel, and gave evidence tending to show that all that was said by Tarbel as to the conversation in Boston was not true. Upon this contradictory testimony the case was sent to the jury to determine whether Kay was in fact practically the maker of the paper, and had in fact made the agreement testified to by Tarbel to treat it as his own paper and see that it was paid at maturity, the jury being instructed that if such conversation was had and the note was taken by Tarbel upon the faith of that agreement, it was a waiver by Kay of the right to have a notice of protest, and he was chargeable as indorser, although no notice of protest had been served upon him. To these instructions of the court the defendant excepted. The-jury found a verdict for the plaintiffs, and the motion for a new trial having been denied, judgment was entered upon the verdict, and this appeal is taken from that judgment and from the order-denying a new trial. The question presented is simply whether,, upon the whole case, the plaintiffs, having admitted that notice of' protest was not given to Kay so as to charge him upon this note, were in a situation to prove acts of Kay which operated as a waiver of that notice, and if they were, was the evidence sufficient to establish such a waiver ?

Kay was liable upon this note only as indorser. (Spies v. Gilmore, 1 N. Y. 321; Bacon v. Burnham, 37 id. 614.) As such his liability depended upon the same conditions as that of any otherindorser, and it was necessary that the same proceedings should betaken to charge him. While there can be no doubt that an indorser may waive his light to have the note presented for payment and to-be notified of the protest of it, so that he will be liable without the-taking of such steps, yet if it is sought to charge him because of such waiver, it is necessary that the facts constituting the waiver-should be set out in the complaint, and those facts cannot be proved under allegations' alleging presentment of the note and protest, and that notice of these acts was given to the indorser. (Clift v. Rodger, 25 Hun, 39; Alleman v. Bowen, 61 id. 30.)

The complaint in this action alleged presentment of the note and protest, and the giving of due notice to the indorser,- and evidently the pleader relied upon those facts to establish the liability of the defendant. It contained in addition, as has been stated, an allegation that the indorsement was made with intent to give credit to the maker of the note, and that the note was taken upon the faith of the indorsement. These facts, however, are not sufficient to establish a. waiver by the defendant of notice of protest to which he would otherwise be entitled. The presumption always is that the indorsement of a note is made with the intent to give credit to the malter> and that the note was delivered and accepted upon the faith of it. It is that presumption which affords the consideration to sustain the liability of the indorser, and an allegation in the complaint of the presumption which the law raises from the indorsement does not add to the indorser’s liability, nor does it afford a basis for the making of proof of a waiver of the steps necessary to charge him, which is not otherwise alleged in the complaint. These facts having been, alleged in the complaint, however, it might not have been improper to prove them, as the plaintiffs sought to do; but while evidence for that purpose may have been admissible, it was not admissible for any other purpose than to prove the fact alleged in the complaint, and that fact was not sufficient to obviate the necessity of proof that the usual steps were taken to charge the indorser.

The plaintiffs cite cases in which such proof seems to have been given under an allegation of protest and notice to the indorser. These cases have been examined, and it is quite plain that in none of them was the question of pleading considered. The sole question examined in each one of them was whether the facts established were sufficient to warrant a finding that the indorser had waived the taking of the usual steps to charge him as such, and the question whether his pleading warranted proof of the facts, does not seem to have been considered in either of the cases. The plaintiffs in this-case, therefore, were not in a position to prove that the indorser had been charged in any other way than the usual mode of giving him notice of the protest of the note, and they were not at liberty, under their pleading, to show a waiver of that right.

The objection, therefore, of the defendant, to the evidence of Tarbel, as inadmissible under the pleadings, so far as it was offered to prove a waiver of the notice of protest, was well taken, and the evidence should not have been received for that purpose.

But even had the facts necessary to warrant the admission of that evidence been alleged, the evidence was not sufficient to warrant a finding that the defendant had done anything which would entitle the plaintiffs to charge him upon this indorsement, without the usual steps. The facts proposed to be proved were that if Tarbel would accept the paper, Kay would treat it as his own paper, and would see that it was paid at maturity, and that he considered it as his own obligation, so that while he was in fact a principal, it might not so appear upon the face of the paper. In our judgment, these facts-were not admissible to show a waiver. The alleged statement was-made before the contract of indorsement was executed. . The nature and extent of that contract is implied by law from the fact that the name of the indorser is written across the back of the note. When the indorsement is signed, the contract arises from it, and its terms .are as well settled as though they had been written out above the name of the indorser. It is a contract in writing, and all prior negotiations in regard to the paper are just as much merged in the contract made by the indorsement as they would have been had the terms of the indorsement been written out above the signature of the indorser. Parol evidence of- what was said before the indorsement, by way of establishing the nature of the contract, is just as inadmissible in regard to this contract as in regard to any other contract in writing, and the nature and extent of it cannot be varied by any prior conversation between the parties. (Bank of Albion v. Smith, 27 Barb. 489; 4 Am. & Eng. Ency. of Law [2d ed.], 458.)

The judgment and order must, therefore, be reversed and a new trial granted, with costs to the defendant to abide the result of the .action.

Van Brunt, P. J., Barrett, Patterson and O’Brien, JJ., concurred.

Judgment reversed, new trial ordered, costs to appellant to abide event.  