Case ID: mass_21/html/0460-01.html
Source: Caselaw Access Project
Author: {"author": "Wilde J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Nathaniel Cornwall versus William Gould.
    At the request of the defendant, a negotiable note was signed by A, payable to thi •daintiff, and by him indorsed for the purpose of being discounted at a bank for the use of the defendant, who promised to indemnify the plaintiff; and upon the note’s being discounted, the defendant received the money from the bank. The plaintiff afterwards took up the note by giving a new negotiable note, signed by himself and indorsed by B. It was held : —
    That the plaintiff had no claim against A, but only against the defendant: —
    That the giving of the new note was equivalent to a payment of the first, and so would support an action against the defendant for money paid : —
    That after verdict, it was too late to object that the plaintiff had made the payment without having been duly notified as an indorser : —
    That taking collateral security for his indemnity would not prevent the plaintiff fromf resorting to an implied promise, unless it were agreed that he should look only to such security
    And that in case die indorser of the new note should be compelled to pay it, he would havexno right of action against the defendant, it not appearing that he indorsed it at the defendant’s request.
    Assumpsit for money had and received ; lent and accommodated ; and paid, laid out and expended. Two special counts were filed at the term of the trial.
    The ground of the action was, that in April 1822, in Georgia, a promissory note was made at the request of the defendant, for the sum of 1700 dollars, by J. Denniston, payable to the plaintiff, and by him indorsed for the purpose of being discounted for the use and benefit of the defendant at a bank in Georgia; that the note was discounted at the hank and the money received by the defendant, who had undertaken to indemnify the plaintiff, and for that purpose had assigned to him conditionally a patent right; that after one or two renewals of the note at the hank, it was paid by the plaintiff out of his own funds, by giving a new note signed by himself and indorsed by one Clafflin, and that he had received nothing therefor from the defendant.
    The jury were instructed by the chief justice, that if they were satisfied that the note was made at the request of the defendant and for his use and benefit, and that the plaintiff was the party to the note on whom the bank relied, and that the debt was paid to the hank by the plaintiff, this would con stitute a good ground of action for money lent and accom modated. Also, that the giving a new note to the bank by the plaintiff, with another indorser, in lieu of this note, after it had been several times renewed, the first being given up as paid, was, without evidence of payment of the new note, a payment in law of the first note, so as to entitle the plaintiff to recover upon the money counts.
    
      March 13th.
    The defendant objected to the filing of the two special counts, as being for a different cause of action; which objection was overruled.
    A general verdict was found for the plaintiff, and the de fendant moved for a new trial.
    
      Fletcher now supported the motion.
    He made several objections to the special counts, which it is unnecessary to state. The counts for money had and received, and money lent and accommodated, are not supported, because the defendant did not receive the money from the plaintiff, but from another source, the plaintiff having only become conditionally liable as surety for its being repaid. Bank of England v. Glover, 2 Ld. Raym. 735; Ford v. Keith, 1 Mass. R. 139.
    Neither can the plaintiff recover on the count for money paid. It does not appear that the plaintiff was notified as indorser, and if he has made a voluntary payment, he has no claim against the defendant. Skillin v. Merrill, 16 Mass. R. 40; Munroe v. Easton, 2 Johns. Cas. 75. But the plaintiff shows no such payment as will sustain this count. A surety cannot recover of his principal, unless he has actually paid money, and not merely given his promissory note. The first case in which any thing but the payment of money has been held sufficient to support a count for money had and received, is Barclay v. Gooch, 2 Esp. R. 571, and that case was overruled in Taylor v. Higgins, 3 East, 169; Fell on Guarr. Append. 369. In some instances, giving a negotiable note has been held to be an extinguishment of a simple contract debt, because otherwise the debtor might be twice charged ; but the reason does not apply here, where one note was substituted for another. Maxwell v. Jameson, 2 Barn. & Ald. 51; Cumming v. Hackley, 8 Johns. R. 156; 11 Johns. R. 518; Anthon’s N. P. Cas. 132, note.
    
      
      March 26th.
    
    The plaintiff having taken express security in the assignment of the patent right, he cannot recur to an implied promise. 2 T. R. 105; 7 Mass. R. 107; 8 Mass. R. 150; 1 Caines’s R. 47.
    If giving the last note was a payment, then it was by Cornwall and Clafflin together, and the action should have been joint. Perhaps Clafflin may ultimately be compelled to pay that note. He will then have his action against the defendant, who will thus be obliged to pay twice.
    
      Shaw and Bartlett, for the plaintiff,
    to show that giving the last note was a payment, and also that the original transaction might be viewed as a loan by the plaintiff, through the bank as his agent, and so the action'was sustainable upon the original money counts, cited 5 T. R. 513; 6 Cranch, 253; 6 Mass. R. 143; 7 Mass. R. 290; 9 Mass. R. 548; 2 Esp. R. 570; 3 East, 169; Wade v. Wilson, cited in 2 Barn. & Ald. 47; 8 Johns. R. 156; 11 Johns. R. 518; 5 Mass. R. 299; 3 Cowen, 280; 2 N. Hamp. R. 333; 11 Mass. R. 494; 7 T. R. 572; Fell on Guarr. 238; 1 Mass. R. 139.
   Wilde J.

delivered the opinion of the Court. This is an action of assumpsit. The declaration contains the usual money counts, and two special counts, all however founded on the same cause of action. At the trial a general verdict was returned for the plaintiff, and the defendant now objects to one of the special counts as insufficient to warrant a judgment on the verdict. But this objection cannot prevail. The- rule is, that when there are several counts for the same cause of action, and a general verdict is returned, it may be altered so as to apply to any one count, because such alteration cannot prejudice the defendant on the question of damages. The general question therefore is, whether there is any one count supported by the evidence.

First, it is objected to the count for money paid, that no money has in fact been paid, and that the giving a negotiable note of hand for a prior debt is not equivalent to pay-merit, so as to warrant a recovery in this form of action. This objection is applicable also to the other counts. But if the law was correctly laid down in the case of Barclay et al. v Gooch, 2 Esp. R. 571, this objection cannot prevail. It is said that this case has been overruled ; and it certainly has been doubted. It was also a case at nisi prius; but it was afterwards sanctioned by the opinion of the other judges. It is also confirmed by a similar decision in New York in the case of Witherbee v. Mann, 11 Johns. R. 518, and has been mentioned with approbation by this Court. Douglass v. Moody et al. 9 Mass. R. 553, [Rand’s ed. 554, n. (a)]. The cases, in which a different doctrine seems to be maintained, are all distinguished from the case of Barclay et al. v. Gooch, and cannot therefore be considered as overruling it.

In these later cases it has been held, that a bond given for a prior debt, due on simple contract not under seal, was not such a payment as would support an action for money paid ; yet the prior debt was certainly extinguished by the bond. The distinction, however, is, that bonds can in no sense be considered as money; whereas negotiable bills and notes are frequently so considered, and are so treated in the ordinary transactions of business. It may he said that this is a technical distinction, and it is so ; but to a technical ohjec tian a technical answer is sufficient.

Another objection to the plaintiff’s recovery is, that the debt paid was not the debt of the defendant, but of one Denniston. It appears by the report of the case, that Denniston gave his note at the request of the defendant, who received the money after the note had been discounted at the bank. It was indorsed by the plaintiff for the use of the defendant, who promised to indemnify him; so that it is clear, that the plaintiff had no claim on Denniston. If he had paid the note, the defendant would have been liable to him ; and from this liability the defendant has been discharged by the plaintiff. So far as the plaintiff’s rights are concerned, the debt was the defendant’s, and not Denniston’s.

It is also' objected, that the payment by the plaintiff was voluntary and not in consequence of any legal liability, there being no proof that he had been duly notified by the bank so as to charge him as indorser. It is a sufficient answer to this objection, that notice may be presumed, and that it is now too late to make the objection, as it was not made at the trial. If the cashier of the bank, whose deposition was tasen and used at the trial, had been interrogated, the fact might have been ascertained.

Another objection is, that the plaintiff took security from the defendant for his indemnity ; and cannot, therefore, resort to an implied promise. This would be true, if it had been agreed, or understood, that the plaintiff should look only to his security for his indemnity ; but this does not appear, and the taking collateral security for the fulfilment of a promise to indemnify, whether express or implied, does not discharge the promisor from his obligation.

The last objection is, that the defendant would be liable to Clafflin, should he be compelled to pay the outstanding note. But this objection also fails, for on the facts proved the plaintiff alone is liable to Clafflin. To make the defendant liable it must appear, either that Clafflin signed the note at his request, or that he agreed to indemnify him. There is no evidence of either fact, nor any circumstance proved from which the defendant’s liability to Clafflin can be presumed.

Upon the whole, we think the plaintiff is entitled to recover on the count for money paid, and that the verdict may be altered, and judgment rendered on that count. 
      
       See Baker v. Sanderson, 3 Pick. (2d ed.) 353; Kingsley v. Bill, 9 Mass R. (Rand’s ed.) 200, n. (a).
     
      
       See 1 Chitty’s Pl. (6th Amer. ed.) 384, n. 1; Pearson v. Parker, 3 N Hamp. R. 366; Whitcomb v. Williams, 4 Pick. (2d ed.) 231, n. 1.