Case ID: mass_27/html/0213-01.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

Nathaniel Eaton versus Zebulon Carey.
    The defendant and one B. gave each to the other his negotiable note, of the same date, for the same sum, payable at the same time. B. raised money upon the note given to him, by pledging it to one M., and after it became due the defendant signed another note as surety for B., for the purpose of redeeming the first note, and directed B. to use it for that purpose and return to him the first note. B. raised money upon the new note, and therewith took up the first note, but instead of returning it to the defendant, he negotiated it to the plaintiff. In an action upon this note by the plaintiff against the defendant, it was held, that the note was given upon a valid consideration, and that the money paid to M. was B.’s money and not the defendant’s, and therefore that B. liad a right to negotiate the npte again and the plaintiff was entitled to recover.
    Assumpsit on a promissory note, dated March 11th, 1828, for $ 50, payable to Joshua N. Bartlett or order, in thirty days, and indorsed in blank. Trial before the late chief justice Par~ her.
    
    The defence was, that the note was dishonored at the time when it came to the hands of the plaintiff, and that being an accommodation note between Bartlett and the defendant, without any valuable consideration, the plaintiff was not entitled to recover.
    It was proved that the note was made at the request of Bartlett, to raise money for his use, and that he carried it to one Mills, who lent him $ 40 and took the note in pledge, Bartlett promising to pay the money in three weeks. The note remained with Mills until about the 12th of May, when the defendant signed a note as surety for Bartlett, to one Prentiss, for the purpose of raising $ 50 to redeem the note from Mills. The defendant directed Bartlett to carry the note to Millbury for that purpose, and return to him the first note. The money was paid to Mills by Bartlett, on or about the day of the date of the second note, and the first note was taken up ; after which Bartlett pledged the note so taken up, to the plaintiff, upon a loan of $ 40, the plaintiff not knowing of the former disposition of the note.
    On the same day on which the note was given by the defendant to Bartlett, he took from Bartlett a note for the same sum, payable at the same time. This note, on May 28th, 1828, was put in suit by the defendant, in the same writ with an account against Bartlett, who had absconded, and at December term 1828, judgment was rendered in that suit for $ 109-08 damage ; which sum was made up of the note and the account. In January 1829, an execution on the judgment was levied on real estate of Bartlett, and was satisfied to the amount of $ 56-67, leaving the balance of the execution, which was more than the amount due on the note at the time of the judgment, still unpaid, Bartlett being insolvent and having no property to be levied on.
    Upon these facts a default was entered, subject to the opinion of the Court.
    
      Oct. 9th.
    
    Newton and W. Lincoln, for the defendant.
    The note in suit having been indorsed when it was overdue, the same defence may be made as if the action were brought by Bartlett; a..ii Bartlett could not maintain an action, because the note was w'ithout consideration. The fact that Bartlett gave his note to Carey, does not affect the question of consideration ; it was intended that one note should exactly balance and defeat the other. When the note in the hands of Mills was paid, the consideration of both notes failed entirely. The note held by the defendant might be set off against the one in suit, and its having passed into a judgment is immaterial. Sargent v. Southgate, 5 Pick. 315 ; Evans v. Prosser, 3 T. R. 186 ; Baskerville v. Brown, 2 Burr. 1229 ; Peabody v. Peters, 5 Pick. 1.
    The note was paid to Bartlett, by substituting for it the note which the defendant signed as surety. Bartlett agreed to carry the new note to Mills, and to return the first note to the defendant, and the defendant stands discharged, in the same manner as if this had been done. Payment was made to Mills, and it is of no consequence whether this was done by Bartlett acting for Carey the promisor, or by Carey himself. Peabody v. Peters, 5 Pick. 1. The whole purpose of the note was answered by raising a sum of money upon it once, and to negotiate it again was a fraud upon the defendant.
    
      Washburn, for the plaintiff.
    This being an accommodation note, made with the intent that it should be sent into the market for the benefit of Bartlett, the want of consideration can be no defence against an indorsee, whether he took it before or after it became due. Charles v. Marsden, 1 Taunt. 224 ; Bradford v. Hubbard, 8 Pick. 157 ; Fentum v. Pocock, 5 Taunt. 192; Kerrison v. Cook, 3 Campb. 362; Brown v Mott, 7 Johns. R. 361 ; Chitty on Bills (Philad. edit. 1821), 240.
    The payment to Mills must be considered as made with Bartlett’s money, he being the principal in the new note ; Whitaker v. Smith, 4 Pick. 84 ; and the original note, not having been taken up by the maker, continued negotiable. Guild v. Eager, 17 Mass. R. 615.
    But the note was founded on a valid consideration, having been given for a similar note made by Bartlett. Cushing v. Gore, 15 Mass. R. 69 ; Chitty on Contr. 16.
    The defendant has elected to consider Bartlett’s note as valid and unpaid, having brought his action upon it and recovered judgment, and he is therefore estopped to allege that the note now in suit is without consideration. Mowry v. Adams, 14 Mass. R. 328. The defendant cannot make use of any claims against Bartlett, not having filed them in set-off; Braynard v. Fisher, 6 Pick. 355 ; there being no agreement that they should be considered as payment, which was the case in Peabody v. Peters, 5 Pick. 1.
    
      Neicton, in reply, denied that there was any difference, as to want of consideration, between accommodation notes and other notes, indorsed when overdue.
    
      My 1831.
   Per Curiam.

The facts of this case are somewhat complicated ; when understood, we think there is no great difficulty in the application of the rule of law.

It is quite clear, that the note was negotiated to the plaintiff, when overdue, and therefore he must take it subject to any legal defence which might be made to it, if it remained in the hands of the promisee.

Two grounds of defence are relied upon ; want of consideration, and payment.

As to the first, the facts do not warrant it. The defendant and Bartlett made an exchange of notes, for equal amounts, for the purpose of raising money, and without any restraint in the negotiation of them. Each therefore was a good consideration for the other, and each party might negotiate the note of the other, or hold and collect it in his own name, as he thought fit. But it has been argued, that the note given by Bartlett to the defendant was meant only as a receipt or defeasance intended to cancel the note in suit in this action. But this argument is directly repugnant to the fact agreed, that the defendant took a note from Bartlett. It must therefore be taken to be a promissory note, a valid and available contract for the payment of money to himself or his order, according to the terms of it ; and so Carey himself considered it, by putting it in suit, long before this action was brought, and obtaining a judgment on it.

As little ground is there for maintaining the defence of payment. Had the note been paid by the defendant, either to Mills or any other holder, after it was due, it could not be indorsed over so as to charge him again. But it was not paid by him or with his money. The facts show, that when the note was in the hands of Mills, the defendant became surely with Bartlett, on another note, to raise money to enable him, Bartlett, to take it up, and this was done. But the money thus raised was Bartlett’s money, notwithstanding the defendant was his surety. Whether the defendant has paid this note on which he was surety for Bartlett, does not appear, nor would it make any difference. If he has, he has his remedy over against Bartlett for money paid to his use; or for aught appears, he may have adequate indemnity. In either view, the money thus raised was Bartlett’s money, and therefore the note was taken up by him, as promisee and indorser. But it is well settled, that one who takes up a note as indorser may either sue the promisor for money paid, or indorse the note, in such manner as to charge the promisor, at his election, and though thus negotiated when overdue, the indorsee may maintain an action against the promisor, or other prior parties who may be chargeable. Guild v. Eager, 17 Mass. R. 615. This payment to Mills, having been made by Bartlett, the indorser, he might well transfer it to the plaintiff, though overdue at the time, and the plaintiff’s action upon it is well maintained.

Judgment on the default. 
      
       The able editors of the second American edition of Bayley on Bills, seem, upon apparently very cogent reasons, to entertain strong doubts of the entire correctness of the above conclusion. Bayley on Bills, (2d Am. ed.) 529, note (z.)