Case ID: scl_31/html/0427-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Curia, per O’Neall, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

William Enston vs. Alicia Friday.
    
    Where, after suit brought on a negotiable note, it is lost, the plaintiff, on proof of the existence and loss of the note, may recover ; semble.
    
    Where, after suit brought on a negotiable note, it is purchased by a third person, the suit may, with the consent of the plaintiff, go on for the benefit of the purchaser.
    A mortgage, given to indemnify the indorser of an accommodation note to be discounted in bank, stands as security for each successive renewal, whether it be expressed in tho mortgage that it shall so stand, or not; note.
    
    
      Before O’Neall, J. at Charleston, Spring Term, 1845.
    
      The report of the presiding Judge is as follows :
    “ This was an action of assumpsit, on a note made by A. Friday, indorsed by the defendant and John Lee. It was conceded that there had been a demand of payment on the maker, and notice to the indorsers in due time. Since the suit was commenced, and after the declaration was filed, and probably after issue joined, the note was lost. The signatures of the makers and indorsers were proved by a witness, who had seen the original note before it was lost. It appeared that a judgment had been recovered against Lee on this note, which had been paid by his son, on the express understanding that this suit should be continued for his benefit.
    “ The jury were told that, generally speaking, the rule was, that an action at law would not lie on a lost note. To this, however, there were many exceptions, arising out of this principle ; that where the party could not be put in jeopardy of having the note again to pay, the action at law might be maintained. Here the note was lost after it was dishonored, and that might possibly be enough to sustain the suit. But certainly, the rule did not apply to a case where the note was in existence when the suit was brought. If the action was well brought, no subsequent misfortune, without fault on the part of the plaintiff, could defeat it.
    
      
      “ The case of Noonan vs. Gray, 1 Bail. 437, was that on which the defendant relied to defeat the action, by 'the payment made by Lee’s son. I have always regarded that case as shaken, if not virtually overruled, by Alston vs. Alston, 2 Hill, 362, and that will (if I recollect it rightly) abundantly appear, by referring to the original opinion,  Be that, however, as it may, I did not regard the case of Noonan vs. Gray, as standing in the way. The understanding that this case should be continued for the benefit of Lee, Jr. shewed, that although Enston was satisfied, that yet Lee, Jr. was using his name to collect the money which was legally due to him. A note is not discharged by a payment even by an indorser ; it merely discharges his liability, and authorizes him to strike out his indorsement, and pursue those indorsers who preceded him, as well as the maker. As to the alleged incompetency of the proof to shew that the payment was made by John Lee, Jr., the son of John Lee, Sr., I have made no note of anything, except that Mr. Phillips, the plaintiff’s attorney, proved that “ the note was paid by John Lee-’s son; this suit was to be continued for the benefit of John Lee, Jr.” How his knowledge was obtained, I do not remember.”
    
      The defendant appealed, and now moved for a new trial, on the following grounds.
    1. Because it was proved that the plaintiff in this action had received full payment of the note sued upon.
    2. That the evidence proved a payment of the judgment recovered on the same note against John Lee, another indorser, and that such payment was made hy John Lee, such defendant.
    3. Because the evidence given to shew payment of the-said judgment by John Lee, Jr., was incompetent.
    4. Because the note sued upon in this case was lost, and was. a negotiable note, and was indorsed, and could not be recovered by a suit at law.
    
      Elliott and Cooper, for the motion.
    Phillips, contra.
    
      
       The opinion in the case of Alston vs. Alston, referred to by the presiding Judge, does not seem to touch the' question decided in the case of Noonan vs. Gray. That opinion is as follows :
      Harper, J. The principal point involved in this case, was determined at Columbia several years ago, in the case of Green vs. Morgan. It is within my recollection, that other cases involving the same point, were so decided about the same time. Judge Nott, delivering the opinion of the court in the case referred to, says, “ but there is ope point in the case to which the decree does not extend, pn which it is necessary that an opinion should be expressed. That is, whether the renewal was not an extinguishment of the original note which the mortgage was intended to secure, and whether it was intended to embrace the several successive renewals. In this particular case, perhaps, that is not a difficult question, because the mortgage expressly declares that the note is to be renewed, and that it shall stand as security for future renewals. But as we have other cases before us involving the question, where no such express provision is made, we may as well avail ourselves of this opportunity fo decide the question, as to reserve it for another case; and I am the more disposed to do so, as it is one on which I feel no difficulty. The usage of banks in that respect, was very well known, and every person giving security as an indemnity against a note to be discounted in bank, must be presumed to do so with reference to that usage ; and although each successive note is, for certain purposes, a new contract, and therefore an extinguishment of the original note, it is no extinguishment of the debt; it is only a renewal of the evidence of it. The debtor and creditor still stand in the same relation to each other, and the security continues, so long as a fragment of the original debt remains unpaid.”
      The evidence received by the presiding Judge, was to establish the usage of the bank referred to. The testimoney is, that it is always understood that a note indorsed for the maker’s accommodation, to be discounted in bank, is to be renewed, unless the contrary be expressed. So fully is the usage established, that I think it may be regarded as part of the general popular understanding, that when a note is indorsed, to be discounted in bank, for the accommodation of the maker, it is to be subject to renewal.
      The motion is dismissed.
      Johnson, J. concurred.
    
   Curia, per O’Neall, J.

In this case, the court is satisfied with the law ruled by the Judge below. But to the fourth ground, (the lost note) it is a very sufficient answer, that the note, which on the trial was supposed to be lost, has since been found ; is now in the possession of the plaintiff’s attorney, and will be by him deposited, under our practice, in the record. There is, therefore, no danger to the defendant of any loss from the possibility that the note might get into other hands. So, too, on the first and second grounds, it is plain that the payment alluded to, was not intended to be a satisfaction of the debt; and if not so intended, it cannot have the effect. It is now stated, and not denied, that the judgment of this plaintiff against John Lee, Sr. was assigned to John Lee, Jr. That is a purchase, not a payment, of the debt. The motion is dismissed.

Richardson, Evans, Butler and Wardlaw, JJ. concurred.