Case ID: mass_17/html/0498-01.html
Source: Caselaw Access Project
Author: {"author": "Parker, C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Chester Guild versus William Eager and Another.
    When a negotiable promissory note has been taken up by the last endorser, it still retains its negotiable quality, and an action may be maintained upon it by the endorser of such last endorser, against any prior party liable.
    The plaintiff declares on a promissory note, made by the defendants on the 25th of April, 1818, for 190 dollars, payable to one John Littlefield or his order, in 90 days, with grace, and endorsed by Littlefield to the plaintiff.
    At the trial upon the general issue before the chief justice, March term, 1821, the making of the note by the defendants, and the endorsement in blank by Littlefield, were admitted.
    A witness for the defendants testified that, on the day of the date of the note, he purchased it of Littlefield, who then endorsed it in blank, having received payment for it partly in goods and partly in cash; that before the note arrived at maturity, the defendants failed; and that the sum due on the note was afterwards paid to the witness by Littlefield, partly in money, and partly in another note signed by one Lynnfield, and endorsed by Littlefield; and the first note was then given up to Littlefield.
    
    The judge directed a nonsuit, subject to the opinion of the Court, whether the note, when it was thus taken up by Littlefield, ceased to be negotiable; and if the Court should be of [ * 616 ] opinion that the action could not be maintained, the * non suit was to stand ; otherwise the nonsuit was to be set aside, and the defendants were to be defaulted ; unless they could show probable grounds of payment, in whole or in part, before it was transferred to the plaintiff, in which case a new trial was to be granted.
    
      Morey, for the plaintiff.
    When a promissory note is paid or taken up by the last endorser, it remains a negotiable instrument in his hands; and as he has a full and complete right upon it against the maker and all prior endorsers, so he may transfer that right to another; and the new endorsee may maintain an action, in his own name, against any of the prior parties.
    
      This position has been agitated in three cases only in our own reports. The last of these, in order of time, is that of Emerson vs. Cutts 
      . There the court being of opinion that the note had not, in fact, been paid by the last endorser, the point now presented was merely alluded to. The next case prior to that is the case of Boylston vs. Greene 
      . There the last endorser, having paid the note, again negotiated it, and the new endorsee brought an action upon it against a prior endorser; and the court held that the action could not be maintained. They seemed, however, to say, that they perceived no good reason for the rule ; but, as they found it laid down generally, that a bill or note, being once paid, ceased to be negotiable, they were inclined to adhere to it. The only remaining case is that of Blake vs. Sewell 
      . This was, in fact, amerems* prius decision. Dana, C. J., directed the jury, that a note, having been once paid, ceased to be negotiable; and a majority of the justices present at the trial concurred in the direction. Yet this was the authority relied upon in Boylston vs. Greene, where the Court say that this rule had been laid down generally. The case of Blake vs. Sewell was decided solely upon the authority of the case of Beck vs. Robley 
      .
    In this last case, Brown drew a bill upon Robley, payable to Hodgson or order. Hodgson negotiated it. Robley * did not pay it, when it came to maturity; and Brown, [ * 617 ] the drawer, took it up, and afterwards transferred it to Beck, who brought this action upon it against the acceptor. A verdict being found for the defendant, on the ground that the bill ceased to be negotiable, when paid by the drawer, a new trial was moved for, but refused; “ for,” said Lord Mansfield, “ if it were negotiable, Hodgson would be liable, for which there is no color.” The only ground of the decision then was, that Hodgson, who had been discharged by payment of the bill by a. prior party, might be exposed to injury by a new negotiation ; and the reason given shows that if Hodgson, the last party to the bill, had paid it, he might have negotiated it again.
    Indeed, the law had been distinctly so settled before, in the case of Gomez Serra vs. Berkley 
      ; and if the reason given by Lord Mansfield is not sufficient to prove that nothing is to be found in the case of Beck vs. Robley, inconsistent with the position now taken by the plaintiff, the fact that the case from Wilson, in which the law had been settled, was not mentioned as overruled, clearly shows that the case of Beck vs. Robley, so far from impugning the doctrine contended for, confirms it.
    
      So Bayley understood the case of Beck vs. Bobley, and cites it as authority for the proposition, “ that a bill or note cannot be endorsed or negotiated, after it has been once paid; if such endorsement or negotiation would make any of the parties liable, who would otherwise be discharged ” .
    Further, it can never be supposed that the last endorser pays a note in order to extinguish it; but merely to redeem himself from the situation in which he stands as endorser. When the note comes back to him, he is remitted to his original rights, and holds an instrument of the same nature, and possessing the same legal qualities, that he did before he made the negotiation. So it may be said in the present case; for this note was never discharged, as between Littlefield and the defendants, or as°between [ * 618 ] *the plaintiff and the defendants. This doctrine is fully illustrated and confirmed in the recent case of Callon vs. Lawrence 
      .
    There cannot therefore be any doubt what the law now is, or what it always has been, in England. In this commonwealth, the case of Boylston vs. Green, resting entirely upon that of Blake vs. Sewell, and this upon the case of Beck vs. Robley, is without any well-derived authority to support it. Nor does it seem to have been much contested ; the Court yielding, with apparent reluctance, to what was supposed to be a well-settled authority. If, therefore, upon a reexamination, they shall find that the extent of former decisions has been misapprehended, it is humbly presumed, that they will go beyond erroneous decisions, and now establish the only true and convenient rule upon the subject.
    
      Leland, for the defendant.
    It has been often observed in courts of law,—and the observation should always have great weight,—that it is of more importance that rules should be established and known, than whether those rules are originally founded in the purest and highest reason. The state of the law must be acknowledged to be wretched indeed, when the solemn decisions of the highest judicial tribunal, published under the authority of the state, are not to be considered as precedents, to be relied on in cases in all respects similar. The case of Boylston vs. Greene is precisely like the present case. Yet the Court are urged to hold it for naught, to go behind it to find authorities in the books of other countries, wearing a different aspect. It is respectfully believed that this Court will hold itself bound by its own well-considered opinions, and that the same law will be administered to every suitor in similar cases.
    
      
       12 Mass. Rep. 78.
    
    
      
       8 Mass. Rep. 465.
    
    
      
       3 Mass. Rep. 556.
    
    
      
       1 if. Black. 89, note.
    
    
      
       1 IVils. 46.
    
    
      
      
        Bayley on Bills, 66.
    
    
      
       3 Maulé Selw. 95.
    
   The cause was argued at the last March term, and being corn tinued for advisement, the opinion of the Court was now delivered by

Parker, C. J.

The nonsuit, in this case, was ordered upon the strength of two decisions of this Court, in which *it was settled that, when a negotiable instrument had [ * 619 ] been paid and taken up by any party to it, it ceased to be negotiable; and this, since the decisions referred to, has been taken to be the law in this commonwealth.

The first case alluded to is that of Blake vs. Sewell, a short ac count of which is published in an appendix to the third volume of our reports; the case having been decided in the year 1799, which was before our series of reports commenced. The note on which the action was brought was made by Wilson to Sewell, or order, and endorsed by Sewell to Pomeroy, who endorsed it in blank, and delivered it, for a valuable consideration, to Rogers, who lodged it in the Bank of the United States for collection. It was there paid by Pomeroy, who took it up, and delivered it, for a valuable consideration, to the plaintiff in the action, his endorsement and that of Sewell remaining on it. There were several points of defence in the action; but that upon which the Court decided was the general proposition, that the note, having been paid at the bank by Pomeroy, ceased to be negotiable; and the authority, upon which the Court, relied, was the case of Beck vs. Robley.

The other case, decided by this Court, is that of Boylston vs. Greene. In this case the defendant was payee, and first endorser of the note. It had been lodged in the Norwich bank by Lathrop, the endorsee, who paid and took it up, and then assigned it, for a valuable consideration, to the plaintiff in the suit. The case of Blake vs. Sew-ell was relied upon in the defence; and the Court decided that the case came within the principle settled in the former case, and that the plaintiff could not recover.

In the opinion given by the Court in the last case, pretty strong intimations were thrown out, that they yielded reluctantly to the authority of Blake vs. Sewell; especially as the whole effect of preventing the plaintiff from recovering would be to give occasion to an action in the name of Lathrop, for the benefit of his assignee, the plaintiff in the suit.

* We have been called upon now to revise these de- [ * 620 ] cisions; and some authorities have been cited, and some arguments advanced, which have induced us to look more thoroughly into this question than either we or our predecessors seem to have done on the former occasions.

There is no doubt that in England, at this day, the proposition which has been received here without qualification, that a negotiable note, once paid, cannot afterwards be transferred, is restrained to cases, where, by such transfer, some party to the bill or note might be prejudiced, or troubled with a suit, who ought to be discharged. As, for instance, if there be several endorsers, none shall be allowed to transfer it but the last; because, if the note is taken up by any prior endorser, and again put in circulation by him, the subsequent endorsers may be exposed to a suit by the new assignee. But where no such consequence will follow, an assignment by the party taking up the bill is lawful, and the assignee may maintain an action upon it in his own name.

This seems to be a reasonable distinction; and it appears by an examination of the case of Beck vs. Robley, upon which alone the case of Blake vs. Sewell rests, that nothing more was decided than that an assignment of the latter character, viz., one which might prejudice some party to the instrument, who was legally discharged, could not be made. The reason which finally satisfied Lord Mansfield in this case, he having thought at the trial that the action was maintainable, was, that if the assignment was good, Hodgson, in whose favor the bill was drawn, and who had returned it to Brown, would be liable. Brown was the drawer of the bill, and when it was returned by Hodgson, he paid him the amount; Hodgson’s name having been before endorsed upon the bill.

The true character of this case seems not to have been considered when the attention of the Court was heretofore drawn to this question. Certainly the only point settled by it is, that where [ * 621 ] the putting of the bill or note into circulation *anew will endanger a party who ought not to be charged, then it cannot be negotiated.

The case reported by Sergeant Wilson cannot be law if the decision in the case of Beck vs. Robley went so far as has heretofore been supposed by the Court. In this latter case the payees of a promissory note endorsed it to Gomez, the plaintiff in the action. They took it back again, and paid the plaintiff the amount. After-wards, upon a new consideration, they again passed it to the plaintiff ; and although the objection was taken that the note had been once paid, the plaintiff recovered. Now, this is perfectly consistent with Beck vs. Robley, according to the view of that case as above given; but wholly inconsistent with it in the view that has been taken of it heretofore. It may be justly inferred that, as the case in Wilson was not even cited, much less overruled, in the case of Beck vs. Robley, the limited is the true construction of that case.

But a late case in the King’s Bench has brought these cases distinctly before the court, and has settled the law in that country, as the plaintiff in this action would wish to have it settled here. In the case referred to, one Pywell drew his bill on Lawrence, payable to himself or order. Lawrence, the defendant in the action, accepted the bill. It was then just like a promissory note payable to Pywell or order. He endorsed it to Taylor, and Taylor to Barnett, who paid it to his bankers. When it became due, the bankers presented it; but not being paid, it was returned to Barnett. A week after this, Pywell, the first endorser, called on Barnett, and paid the amount. Barnett struck out his and Taylor’s endorsements, and delivered the bill to Pywell; and six months after this Pywell paid it to Callón, the plaintiff. The case of Beck vs. Robley was cited, but was held not to be like the principal case; because in this there was not any name left upon the bill to be prejudiced. All the judges, in giving their opinions, deem it necessary to distinguish the case from that of Beck vs. Robley; which they do effectually by showing that Hodgson’s name was * left [*622] on the bill; whereas, in the case before them, the endorsements subsequent to Pywell’s were struck out.

Now, in our cases, the assignment was made by the last endorser, ' so that no one could be prejudiced who was not legally bound to pay; and, in the case before us, it was the payee himself who took up the bill, there being no endorsement upon it but his own ; which is making it precisely like the case of Callon vs. Lawrence. So that in England, such an action as the one now before us, would unquestionably be sustained. It may not be amiss to remark that among the justices of the King’s Bench, who decided this case, is Bayley, the author of one of the most approved treatises upon bills of exchange; in which book, long before this case came up, he had stated the law to be as adopted and sanctioned by the court; having given the construction to Beck vs. Robley, which is now thought the true one.

In this state of things, the law being clearly settled in England, the cases in our court having been decided upon a mistaken consideration of the case of Beck vs. Robley, and reason and convenience being altogether in favor of the English doctrine as now understood ; and, furthermore, it being settled here that the interest in the note would pass to the plaintiff in this action, so that the only effect of adhering to the former decisions would be to oblige him to bring his action in the name of his assignor; we have only to consider whether it is expedient to overrule the former decisions.

The importance of adhering to decisions once deliberately made will always be duly estimated by judicial tribunals. Every motive, personal and public, is in favor of it. But when a whole bench shall be unanimous in their opinion that any former decision of their own or of others is wrong, the duty is as imperative to overrule it, as it is to adhere, where there may only be doubts of its correctness. This is especially proper in cases which may be overruled [ * 623 ] without danger to commerce, or any * infringement of established rules of property. And the opinion, which we have now come to, makes no other change than to give a right of action directly, where it might be had indirectly, in a case where no one can possibly be injured.

The nonsuit is set aside, and a new trial granted . 
      
       [See note to Blake vs. Sewell, 3 Mass. 556.—Ed.]