Case ID: tenn_23/html/0093-01.html
Source: Caselaw Access Project
Author: {"author": "Green, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Applewhite vs. A. T. & E Shaw.
    1. The last endorser of a bill of exchange took a mortgage on the estate of the drawer for his indemnity, and subsequently discharged the bill and prosecuted his suit against the first endorser to judgment. Held: on bill filed by first endorser against the last, to compel the application of the indemnity to the discharge of the judgment, that no such equity existed against the second endorser by reason of sucli indemnity.
    2. If the second endorser had received payment in whole or part from the drawer, to that extent he would not be entitled to a recovery against the first endorser. This, however, is a defence which should have been made at law; and not having been made, a court of equity would give no relief.
    A. T. Shaw drew a bill of exchange in favor of Applewhite, on Kirkman, Hanna & Co. Applewhite endorsed the bill for the accommodation of the drawer, and then E. Shaw, the broker of the drawer, endorsed it, taking a deed of trust on the estate of his brother for his indemnity. E. Shaw took up the bill, and prosecuted his suit in the Circuit Court of Tipton county against Applewhite, and recovered judgment the sum of $546.
    Applewhite filed this bill against A. T. &! Chancery Court at Brownsville, in October, 184 the above facts; and charges also, that A. T. SI that the property was sufficient to discharge th<: that he had proved in the Circuit Court that saicRi&»J said he was “almost indemnified out of said property.”*''" The bill further declares, that said E. Shaw had the control of said trust property, and prays that'he may be decreed an equitable trustee for the complainant, and that he account for the property, and that it be applied to the discharge of the judgment. To this bill there was a demurrer. Chancellor McCambell, at the November term, 1842, sustained the demurrer, and ordered the bill to be dismissed. The complainant appealed.
    
      McLcmahan and Harris, for the complainant.
    
      Searcy, for the defendants.
   Green, J.

delivered the opinion of the court.

The bill alledges, that the defendant A. T. Shaw was the drawer of a bill of exchange for four hundred dollars; that complainant was the first endorser thereon, and defendant E. Shaw the second endorser, and that both endorsements were made for the accommodation of the drawer; that the drawer of said bill, A. T. Shaw, having become insolvent, executed a deed of trust to the said Ephraim, to indemnify and save him harmless against said liability; that the said Ephraim brought suit against complainant as first endorser on said bill, he, the said Ephraim, having paid and taken up the same, and recovered judgment thereon for the sum of $546 50 damages; that the property conveyed to said Ephraim was .sufficient to have discharged said liability, had it been applied in that way; and that complainant proved upon the trial at law, that said Ephraim had acknowledged “that he had already been indemnified out of the property conveyed in said deed of trust, almost to the amount of the debt, but not quite.” Complainant does not know how the property in said deed has been appropriated, and the partial satisfaction could not be allowed under the pleas which he filed in the cause at law, so that he lost the benefit thereof; and a judgment was rendered against him for the whole amount.

The bill prays, that the execution of said judgment be enjoined, and that said Ephraim be compelled to apply the property conveyed in said deed to the extinguishment of said judgment. To this bill there is a demurrer. We are of opinion, that the first endorser of a bill or note has no equity against the last endorser, who may take up such bill or note by reason of any security he may have obtained from the maker or drawer. He has a right to secure himself by taking a deed of trust or mortgage, and still to pursue his legal remedy against a prior endorser. But if he had actually received payment in whole or in part from the drawer, he would have no right to recover to that extent from the complainant. But if this were so, the complainant might have had an ample defence at law. If he did not make it, either from negligence in failing to get proof, or for want of proper pleas to the action, it is his misfortune. He cannot have a new trial here. Affirm the decree, and sustain the demurrer.