ADAMS V. ADDINGTON.
their expenses were the same as if they had handled the cotton ; and, within certain limits, it is easy to see how this may be. When a cotton factor has an office and force of clerks, his expenses may be as heavy to do a small business as to do one up to the full capacity of his force. The services of 'a cotton' factor are very similar to those required of professional men, where skill, experience, and judgment form so large an element of the value that mere clerical work becomes next to nominal. The jury in their verdict seem to have followed the evidence on this point, and there is no reason to disturb their finding. Substantial justice has been done between the parties, and it is vain to consider what would have resulted ha.d the facts been different. The motion for new trial is overruled.
(Oircuit Oourt, N. D. Tea:as. 1.
PROMISSORY NOTE-PROVISION FOR ATTORNEY'S FEES.
A promissory note containing a provision to the effect, " and in case of legal proceedings on this note, agree to pay 10 percent. of th,e amount for attorney's fees," is negotiable under the law-merchant. See 14 FED. REP. 667 et seq.
Plaintiff having sued both the indorsers and the makers of a promissory note, bad thu right to discontinue the action as to the indorsers, although the defendant had set up certain equities as existing between them and the indorscrs.
On Application for Leave to File a Motion for a New Trial. This suit was instituted against J. P. and Z. T. Addington, as the makers, and Mulhall & Scaling, as the indorsers, on a promissory note, of which the following is a copy:
"GAINESVILLE, TEXAS, November 8, 1880. "Seven months after date - - , or either of us, promise to pay to Mulhall & Scaiing, or order, ten thousand eight hundred and 67-100 dollars, at the otlice of Putman, Chambers & Co., in Gainesville, Texas, for value received, with interest at the rate. of 1 per cent. per month aftel' maturity until
*Reportcd Joseph P Hornor, }<;sq" of tho
paid, and in ease of legal proceedings on this ,note, agree to pay \10 per cent. of the amount for attorney's fees. ' [Signed] ".T. P. ADDINGTON.
"$1O,8!H.67. .. Z. T. ADDINGTON.
Upon the trial of the case it was shown by the testimony of the makers-, that the note was executed for the purpose of being negotiated at the bank in Gainesville, and that the negotiation failed because the makers could not or would not give indorsers satisfactqry to the bank. The court permitted the plaintiffs to discontinue the Buit as to the indorsers, without prejudice to any of the rights or equities between the makers and indorsers. Judgment ",as rendel'ed in favor of the plaintiffs, against the makers of the note, for the amount, principal, interest, and 10 per cent. of the principal for attorney's fees. The defendants moved for a new trial upon the grounds-First, that the note, by reason of the stipulations contained in it to pay attorney's fees in the event that it is sued upon, renders the same nonnegotiable; second, the court erred in permitting plaintiffs to discontinue as to Mulhall & Scaling, the indorsers. W. L. Crawford, M. L. Crawford, and L. F. Smith, for plaintiffs. S. Robertson and C. L. Potter, for defendants. PARDEE, J. The note sued on was made in Texas, and was made pnyable in Texas. In that state it is a valid contract, and its stipulations can be enforced in the courts. Miner v., Paris Ex. Bank, 53 Tex. 559; Roberts v. Palmore, 41 Tex. 617. Therefore all questions of usury, public policy, costs, and penalties are eliminated from this case, and no point is left for discussion, save the question of the negotiability of the note. And this last question is one arising under the law-merchant, where the courts of the United States are not bomid by the decisions of the local courts under local statutes, bnt rather by the general principles of the commercial law. As shown by the note of Mr. Adelbert Hamilton to the case of Merchants' Nat. Bank v. Sevic1', 14 FED. REP. 662, the weight of authority is in favor of the negotiability of instruments containing stipulations similar to those contained in the one here sued on. And, on principle, why should such instruments not be negotiable? 'fhe amount to be paid at maturity is fixed and certain. As to what amount is to be paid in case of dishonor, and after maturity, there may be uncertainty, depending upon contingencies. Is not the same true of every promissory note negotiable by the law-
lDAMS V. ADDINGTOIl.
merchant? The simplest one in ,form will <larry with it· an obligation to pay protest fees and interest in case of dishonor. The protest fees are contingent upon protest being made, and upon the number of indorsers notified. The interest payable is contingent upon time. Bills of exchange, which, in the mat,ter of certainty of amount, stand upon the precise footing of promissory notes, carry with them an implied contract in c8.seofdishonor to pay notarial expenses and interest, (and in case of foreign bills payable abroad,) re-exchange and expenses besides. That makers of promissory notes may make stipulations affecting their liability and. the rem.edies to· be taken against them in case of dishonor, and after maturity, without destroying the negotiable character of the notes, seems to be well settled. A note' in the usual form to which is added, "Waiving right (jf appeal and of all valuation and exemption laws," is negotiable.. Zimmerman v. Anderson, 67 Pa. 421; Woollen v. Ulrich, 64 Ind. 120. So is one with a power of attorney to confess judgment attached. Osborn v. Hawley, 19 Ohio, 130; Cushman v. Welsh, 19 Ohio St. 536; Kirk v. In's. 00. 39 Wis. 138. So is one directing 'the appropriation of the proceeds of the note. Treat v. Cooper, 22 Me. 203. Likewise a stipulation may be made that no interest shall accrue prior to a certain date. Helmerv. Krolick, 36 Mich. 371. Or, if not paid at maturity,· t.he note shall bear interest at an increased rate. Houghton v. Francis, 29 Ill. 244; Towne v. Rice, 122 Mass. 67; Parker v. Plymell, 23 Ran. 402. In Towne v. Rice, supra, a note in the terms 'following was held to be negotiable:
.. $11,520.42. BOSTON, July I, 1878. "Four months after date we promtseto pay to Louis Rice, receiver, or order, eleven thousand five hundred twenty and 42-100 dollars, for value received. with interest at the rate of 2 per cent. per month after due, having deposited with the holders as collateral security, with authority to sell the same at the brokers' board, or at public or private sale, at his option, on the non-performance of this promise, and without notice, (23) twenty-three receiver's certificates of indebtedness, $1,000 each, of the Alabama & Chattanooga Railroad."
In Arnold v. Rock River V. U. R. Co. 5 Duer, 207, in addition to above, the note provided that a person, not the promisee, should hold and sell the collateral security, and this stipulation in addition:
. "And in case the proceeds thereof, after paying the principal and interest thereon with all expenses of sale, shall be insufficient, we hold ourselves bound to pay the balance on demaud i" and this note was held negotiable.
In all the foregolllg instances of notes and bills of exchange, the amount to be paid at maturity was certain; the collateral or addi. tional contract, embodied in the instrument or supplied by the law, relating solely to the amount promised to be paid, and in the contingency of dishonor, and expenses thereby incurred. Now, if negotiable instruments may carry with them, either as;"ballast" or "baggage," a collateral contract in case of dishonor to pay reduced or increased interest, to. waive delays and homestead exemptions, to confess judgment, to appropriate the proceeds, to sell collateral securities, to pay (in cases of bills) re-exchange and expenses, all without losing their negotiable character, there is no principle founded in reason which shall declare a promissory note to be not negotiable because it contains a collateral contract that in case of dishonor the maker shall pay the expenses directly resulting from his own miscarriage or default. It seems to me, both on principle and authority, we properly ruled on the tl'ial of this case that the note sued on was negotiable. If the note was negotiable the plaintiffs, who are innocent holders, may enforce the stipulation for attorneys fees against the maker. Hubbard v. Harrison, 38 Ind. 3.23; British Bank v. Ellis, 6 Sawy. 97; [So C. 2 FED. REP. 44:;J Daniell, Neg. Inst. § 62; and see Miner v. Bank, 53 Tex. 559. The remaining question in this case is whether the court ruled correctly on the right of plaintiffs, prior to the trial, to discontinue against indorsers who' were not necessary parties defendant to the suit. The question arises under the Texas practice, (article 1259, Rev. Code,) to the effect:
"The court may permit the plaintiff to <1iscontinue his suit as to one or more of several defendants who Illay have been served with process, or who may have answered when such discontinuance would not operate to the prejudice of the other defendants."
It is claimed that defendants had made an issue with the indorsers of the note as to fraud in obtaining possession of the same, thereby .making, the indorsers primarily liable, remitting defendants to the position of sureties, and, under the articles 3662 to 3668 of the Texas Code, defendants had the right to litigate that issue in the suit, brought by plaintiffs against botb makers and indorsers. It is conceded that plaintiffs need nut have sued the indorsers, but having done so it is urged that they must flOW stand by and await indefinite litigation in no wise affecting them or their interests. The
CASTRO V. DE URIARTE:
position of the parties as makers, indorsers, and holders of negotiaby the Texas statutes in ble paper cannot be affected in this relation to principal and surety. Under the law-merchant, which in this court controls the liabilities of the parties, the Addingtons stand to the plaintiffs in the position of principals in the note sued on, and the plaintiffs ought not, . against their consent, be dragged off into a litigation to determine the fraud between the makers and indorsers. The discontinuance does not interfere with the rights of the defendants to pursue the indorsers who may have defrauded them, and therefore I do not think that legally it operated to their prejudice. And I .understand this ruling to be in accord with the practice in the state courts, as declared by the supreme court of the state. See Shipman v. Allee, 29 Tex. 20; Cook v. Phillips, 18 Tex. 31; Austin v. Jordan, 5 Tex. 130; Dean v. Duffield, 8 Tex. 237; Horton v. Wheeler, 17 Tex. 55. These cases declare the rule"That where a defendant need not haye been joined, and the liability of the defendants is such that an action can be maintained against the others withas to such defendant, out joining him, the plaintiff may enter a nolle and have his judgment against the others."
For all the foregoing reasons the application for lea.ve to file a motion for a new trial is denied.
(Di8trict Court, 8. D. New YQ7'k. March 30, 1883.)
ExTRADITION-WARRANT OF ARREST-DESCInPTION OF OFFENSE.
In a warrant of arrest in extradition proceedings the offense or accusation need be described in general terms only, such as are used in the statute or treaty. 2. S.
A preliminary mandate from the executive is not such prQceedings, unless made obligatory by the treaty.
to jurisdiction in
In the convention with Spain, the provision that it shall be competent for demanding government to obtain a mandate or preliminary warrant, is permissive only, and not obligatory; .the demanding government may, at its option, proceed, under section 5270 of the Revised Statutes, without a preliminary mandate, or may demand it under the provisions of the treaty.
The construction of treaties adopted by the executive department should be followed when not repugnant to the language or purpose of the treaty.