Case ID: miss_6/html/0413-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Per Curiam.\n    ", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Planters’ Bank v. Chewning & Dawson.
    
      A note was made by .Lockhart payable to Chewning & Dawson, and by them endorsed to Crozier, and by the latter endorsed to H. & S. Dawson, and by them endorsed to Chewning, McNeil & Co., who endorsed to the plaintiffs. The last endorsement was stricken out before suit and not noticed in the proceedings.-
    By the court: striking out the last endorsement did not discharge Chewning & Dawson. The case bears no analogy to those cases in which endorsers are discharged by the note falling into the hands of the maker; nor to the cases in which subsequent endorsers are discharged by'its coming to the hands of the prior endorser in the course of business. ' '
    IN ERROR.
    This was an action of assumpsit on the promissory note of Lock-hart, to Chewning & Dawson, for six thousand and two hundred dollars, endorsed by the payees to R. Crozier, and by him endorsed to H. &. S. Dawsori, and by them to the plaintiifs. The action was brought against all the parties, under the act of 1837.
    At the trial it was admitted that Dawson was a partner in both firms of Chewning & Dawson, and H. &. S. Dawson, and that the same Chewning was a partner in the firms of Chewning & DaAV-son, and Dawson and Chewning, McNeil & Co,., the .endorsement of which last firm was erased from the note before suit, and was not noticed in the declaration.
    On this state of facts the judge charged the jury, that the defendants, Chewning & Dawson, (the action having been discontinued as to all but them,) were released from all liability, and they must find for defendants. A writ of error was taken to the High Court of Errors and Appeals.
    Boyd, for plaintiff in error.
    The court erred in three points. 1. In directing the jury which party to find ■ against in their verdict. 2. In giving any charge whatever not asked for in writing. 3. In deciding that the successive endorsements as set forth in the declaration,, discharged the first endorsers'from their liability to a remote endorsee.
    
      They are all liable to third persons, who sue them, in fact, on their separate liabilities as separate endorsers, though but one action is brought. How are Chewning & Dawson released from liability by endorsing the note to one of their own firm? And when he again endorses it either by himself or in conjunction with other partners to a third person, how does he get released? Suppose Crozier who received the note from Chewning & Dawson had endorsed it back again to them in full, and they had then endorsed it in full to plaintiffs, would this have discharged their liability? Certainly not. Much more then will not an assignment to one of them have that effect.
    The judge evidently got confused with the case of the maker of a note who, after it has been negotiated, gets it back and endorses it; this is prima facie evidence of satisfaction in favor of the original endorsers. But the case is widely different where there are successive endorsements, and the same name appears among several of them.
    This affords no presumption whatever of payment; on the contrary it shows the direct reverse, particularly where all the endorsements are on the paper at the time of its execution, as the declaration shows to have been the case here. The endorsers are accommodation endorsers, as evidenced by the pleadings, and nothing can discharge any of them, as to third persons, but a payment to the'holder.
    The case will appear plain in this point of view. Suppose Chewning, McNeil & Co., whose names are erased, had taken up the npíQjtcauM^Eiot ttiey have sued H. & S. Dawson, and could not they in turn tíkte sited Crozier, and he Chewning & Dawson? Most clearly this would have been proper. But if Lockhart, the maker, had taken -upf i¿he note, he never could have reissued it so as to bind; tjie, endorsers or any of them.
    Itvee£tainly is"of qo'consequence, how many times a given endorser may puf his name on the back of a note. So long as the maker is bound, and the note is kept out by successive endorsements, third persons may acquire the right of suit against these endorsers. 5 Cowen’s Rep. 688-89, 709, 711-12.
    But really those questions do not arise in the case. The suit has been discontinued against all but the first endorsers, and the real point is, whether the first endorser, who is also the third and perhaps the fifth endorser, is discharged from paying the last en-dorsee, by the fact, that he, (the endorser,) has several times taken . up, and as'many times reissued the note in question. ■
    The intermediate endorsers might perhaps contend, that after the note has been once taken up by any. party prior to them in liability, he should not again put it forth to their prejudice; but how can the party who reissued it, claim to, be exempt from his liability to a remote holder ? Surely ho stands just where he did before he had taken it up arid reissued it. The taking up of the note by the maker,-would probably release all the endorsers, for their'liabilities are subsequent to his. So the taking up of the note by the first endorser, might release all the subsequent endorsers. But if the note is reissued., the' first endorser who again sets it afloat, would be bound, though all the others were discharged. We have arguéd the case on the idea of succéssive endorsements from hand to hand, for value) in the. course of business. But the declaration here shews clearly that the execution of the note and the endorsements were at the same time, and of course for accommodation, and this would relieve the case from difficulty. ' •'
    ■It is probable the learned judge'who decided the case in the court below, thought that H. & S. Dawson could not.sue Chew-ning & Dawson, at law, and so could not transfer a right to the plaintiffs to sue them. But this reasoning will not hold good. If Chewning & Dawson, the first endorsers, ha^^Bwdfñ^enote and reissued it with all the original endors*nSte¿SliA)Ri¿p|(C. & D.) would still be liable themselves to 5¿h@$iler,no matter .what might become of the -liability of .these omér when Dawson, who is in both firms, takes if his pavmsjlt of it is recognized as the act of the firm of fchewai«gg^&3%w|*fi, so must his act of reissuing it be equally therWu, and sqfi«^om releasing, it is the very thing that binds them, wSSSñfiSffischarges all the other subsequent endorsers.
    If the act of Dawson is to be considered the act of Chewning & Dawson, his payment, their payment; his endorsement, their endorsement; then so long as this note remains in the hands of an endorsee and unpaid.; so long must Chewning & Dawson, the first endorsers, be liable, no matter bow many times the names of each and all of them may be on the paper, nor how many of the other and subsequent endorsers may be discharged. They stand in the situation of the drawers of a bill, accepted by Lockhart and endorsed by numerous endorsers to the plaintiffs, and as drawer they will remain liable, till they or the acceptor pays it, notwithstanding all the endorsers may be released.
    Plis Honor, then, in this view, must have been misled by a wrong application of the correct legal principle, or by a false analogy of the law. On the principle which he seems to have adopted, no suit could be maintained on a promissory note; for as the maker could not sue himself, so he appears to think he could not give to another a right which he has not himself. A most valuable discovery, and well suited to the times! No half way measure, like that of declaring the obligation of endorsers to be no moral obligation; no halting and partial relief to a particular and favored class of debtors; but a liberal, sweeping, catholic provision, extending to all debts and money obligations, striking at the root of the matter, and nipping litigation in the bud.
    Truly, legal maxims are dangerous weapons in the hands of an experienced master.
    Montgomery on the same side.
   Per Curiam.

The plaintiff's brought suit against the defendants as indorsers of a promissory note. The note was made by Lockhart, payable to Chewning & Dawson, and by them indorsed to R. G. Crozier : by Crozier it was indorsed to H. & S. Dawson, and by them indorsed to Chewning, McNeil, & Co., who indorsed it to the plaintiffs. The last mentioned indorsement was stricken out, and not noticed in the pleadings. On this state of the case, the court charged the jury, that they must find for the defendants, because it appeared that the note sued on was indorsed by Chewn-ing & Dawson to R. G. Crozier, and afterwards came by indorsement to the hands of H. & S. Dawson, before it was indorsed to the plaintiffs, and because it (the note) appears to have been indorsed by Chewning, McNeil, & Co. after it was by H. & S. Dawson, which indorsement of Chewning, McNeil, & Co., had been erased.” It was admitted that H. Dawson was a member of both firms, and that Chewning was also a member of the first firm, arid also of the firm of Chewning, McNeil & Co.

' It is difficult to perceive on what legal principles, or by what course of reasoning this charge was given. So far from not being liable at all, H. Dawson was liable in a' double capacity, and so would Chewning have been, if the last indorsement had not been stricken out. The case bears no analogy to those cases in which the indorsers are discharged by the note falling into the hands of the maker; nor to the cases in which subsequent indor-sers are discharged by its coming to the hands of a prior indorser in the course of business. It is wholly immaterial what the rights of Chewning & Dawson, and H. & S. Dawson were towards each other, the bank became a subsequent holder by virtue of their indorsements, and both firms, became liable for the payment. But to place the case in the most favorable point of view, suppose Crozier had indorsed the note back to Chewning & Dawson, then by indorsing it again, they would have become liable to the holder. ■ Now if H. & S. Dawson really lifted the note, or paid for Chewning & Dawson, and put it out again, they became liable on their last indorsement. H. & S. Dawson were in reality a ‘different firm from Chewning & Dawson, and as to third persons . the indorsements present no difficulty.-. It-does not follow becapse H. & S. Dawson could not have sued Chewning & Dawson, that a subsequent indorser may not sue both firms.' When' the note came tp the hands of the bank, the 'difficulty was removed.

It -was not improper to strike out the indorsement of Chewn-ing & McNeil; the propriety of such a course cannot now be questioned. An endorsement may be stricken out even at the trial, if it be necessary.' In any(point of view, there was error in the charge ¡ ; . , • , ,

The judgment must be reversed, .the cause reinanded, and venire de novo awarded.