Case ID: tenn_33/html/0417-01.html
Source: Caselaw Access Project
Author: {"author": "McKiNNsy, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Eakin & Co. vs. S. N. Burger et al.
    
    L Pleading. Non-assumpsit. .While it is true that upon a plea of non-assumpsit not verified by affidavit, tbe maker of a note cannot deny tbe execution, nor the endorser his endorsement thereof; yet upon such plea without oath, either is at liberty to urge if the fact be so, that from the plaintiff’s own showing upon the face of the declaration, he has no legal interest in the note, and consequently can maintain no suit thereon.
    2. Same. Misjoinder of parties. Statute of jeofails of 1852, ch. 152. The act of 1852, ch. 152, authorizing amendments in pleading, and the striking out and supplying parties to an action does not extend to cases where suit is brought against the maker and endorsers of a negotiable instrument in the name of the holder to whom the legal title has not passed.
    3. Same. Same. Same. Where the holder of a negotiable note to whom the same had been transferred by the payee without endorsement, but with the guaranty of said payee written upon a separate piece of paper, brought an action of assumpsit in his own name against the maker, endorser, and guarantor, and in one count of his declaration set forth the guaranty and the precise liability of the guarantor : Held, that though he could not recover in said action against the maker and endorser, for want of legal title, yet "by virtue of the act of 1852, oh. 152, he may recover in said action against said guarantor.
    4. Amendment. Rule as to construction of statutes of amendment. The general rule as to statutes of amendment and jeofails, is that the amendment need not in fact he made; the benefit of the statute is obtained by the courts overlooking the exception, and considering the amendment asmado.
    FROM CAMON.
    This was an action of asswnvpsit brought by Eakin & Go., in their own names, against S. N. Burger, A. Burger, and T. T. Peay. The declaration contains three counts. The first on a note made by S. N. Burger, and endorsed by A. Burger and T. T. Peay. The second describes the note as endorsed by A. Burger, and delivered by T. T. Peay to the plaintiff, with his written guaranty; and the third describes the note as endorsed by A. Burger, and delivered with a separate guaranty to the plaintiffs by Peay. The defendants plead non-assvmpsit, with liberty to give special matter in evidence. On the trial, the plaintiffs introduced in evidence a note as described in the declaration made by S. N. Burger, and endorsed by A. Burger to T. T. Peay, and proved that the latter sent it to the plaintiffs enclosed in the written guaranty, with intent to bind himself as endorser. The words of the guaranty are given in the opinion. The court, Judge DavidsoN presiding, charged the jury, that if it appeared from the evidence that the note was endorsed by A. Burger to T. T. Peay, and there was no regular endorsement or assignment to the plaintiffs by Peay, the suit could not be brought by them in their own names, and that the written guaranty was not such an assignment as would pass the legal title. The jury found for tbe defendants, and tbe plaintiffs appealed to tbis court.
    Gr. W. THOMPSON, for tbe plaintiffs in error.
    "We tbink tbe charge of tbe court is erroneous, in view of tbe pleadings.
    There is no plea put in by tbe defendants of a mis-joinder of parties, or that tbe legal title to tbe note was not in tbe plaintiffs, as is set forth in tbe declaration, which must be done, in order to avail themselves of such defense. See 2 Swan’s Rep., p. 59, Oliver vs. Bcmle of Tennessee.
    
    Tbe defendants should have demurred or put in some plea that would have traversed tbe plaintiffs’ title to tbe note, but tbe plea of non-assumpsit, which was tbe only plea put in, does not put in issue tbe plaintiffs’ right to tbe note.
    If a demurrer or proper plea bad been put in, tbe plaintiffs could then have amended, or dismissed tbe suit as to tbe Burgers, and maintained tbe suit against Peay alone, on the written guaranty, which is certainly maintainable.
    By tbe act of 1837, cb. 25, § 1, Nicb. Sup., p. 225: When tbe plaintiff is entitled to a judgment against any one of tbe parties defendants sued, and not against all jointly, be shall have bis judgment against the party that is liable.
    There can be no question as to Peay’s being liable on tbe guaranty, and that tbis action is maintainable against him. See Acts of 1852, § 6-7, p. 219.
    But it is insisted on' tbe part of tbe plaintiffs, that tbe action is maintainable against Peay, as an endorser in -view of tbe proof in tbe cause. Tbe written guaranty was given expressly to render bim liable in tbe same manner as if be bad endorsed tbe note on the back, and tbe reason assigned by Peay for not putting bis name on tbe bade of tbe note, but giving tbe written guaranty, was that Burger might not know that be was liable for tbe note, and that lie bad refused to endorse it, or Burger might believe so, and in the future give other endorsers than himself to Eakin & Co., to whom be bad recommended said Burger as. good and solvent. Tbe note was enclosed to Eakin & Co., in tbe written gnaranty, and tbe guaranty was to be regarded as equivalent to an endorsement, and to render bim liable in tbe same way as if endorsed. If that was tbe intention of tbe parties, it should be so regarded by tbe court. See Story on Promissory Notes, § 121, 460, 464.
    
      W. F. Coopee, for tbe plaintiffs in error.
    1. This court has repeatedly held that tbe plea of non-assumpsit, since tbe act of 1819, cb. 42, does not put in issue tbe execution of tbe note, nor tbe endorsement unless sworn to. And tbe court has also held that a plea of no assignment is necessary to put tbe plaintiff on tbe proof of bis title, where be claims through parties not sued. “ Tbe existence of tbe paper as described in tbe declaration, is admitted by tbe plea of non-assump-sit, and therefore, its production is not necessary.” Smith vs. MbMámis, T Terg., 417-485. Tbe plea in this case admits tbe cause of action as declared, and no proof, except demand and notice, (which was made,) was required, even against tbe endorser. The special matter, which tbe defendant was at liberty to introduce, could only be such matter as could properly be brought in under the plea. In this view, the charge may be conceded to be abstractly right upon those counts, upon which the evidence was offered; but the plaintiffs, were entitled to recover upon the first count, upon, a proper charge by the court. 4 Yerg., 512.
    2. TJpon the pleadings and proof, the plaintiffs were entitled to recover against Peay alone, if not against the Burgers, and the jury ought to have been so instructed. Act of 1820, ch. 25, § 102.
    E. H. Ewing, for the defendants,,
    with whom was C. B. Davis, who said:
    I insist that the plaintiffs cannot maintain this action, and that defendant Peay cannot be regarded as an endorser on the said note, and he was therefore wrongfully included in the action.
    1. To render Peay liable as an endorser, his name should appear on the note as an endorser, either on the bach or some part of the note, or some paper attached to the note.
    2. A guaranty written on a separate piec.e of paper, is not negotiable, unless it is expressly stated and made so on the face of the guaranty. Story on Promissory Notes, side p. 484.
    A guaranty of a bond or note is not negotiable, unless made so by express terms, but is. limited to the person to whom made or delivered.- Smith et al. vs. DieMson, 6 Humph., 261.
    The evident object of Peay in refusing to endorse this note to Ealrin & Co., and choosing to execute a separate instrument, was to avoid a suit jointly witb tbe maker. So this court held in a similar case of Heely vs. Knomcm, 10 Humph., 290. '
    If defendant Peay guaranteed the payment of the note to Eakin & Co., it was an absolute undertaking upon his part, that if the note is not paid by the maker and endorser he will pay it, and the remedy of the plaintiff against him is upon the guaranty, in an action of debt, and not as the endorser of the note. TwrVy vs. Hodge, 3 Humph., 73.
   McKiNNsy, J.,

delivered the opinion of the court.

This was an action of assumpsit in the circuit court of Cannon. It appears that on the 15th July, 1851, Samuel N. Burger made a promissory note for $589.19, payable twelve months after, date, to the order of A. Burger, at the Union Bank in Nashville. On the back of this note is an assignment in the usual form, to T. T. Peay. On the 1st of August, 1853, Peay sent this note to the plaintiffs enclosed in a letter, which is as follows: Messrs. Eakin & Co. Dear Sirs: I enclose you, after so long a time, Mr. S. N. Burger’s note for $589.19, which note I consider myself bound for as goer agreement between us. Yours, respectfully, T. T. Peay.” It appears that Peay had pi’eviously agreed with the plaintiffs to transfer said note to them by endorsement in the ordinary form, but that considerations arising out of his relations to the Burgers, induced him to prefer rendering himself liable as a guarantor of the note, rather than as endorser, to which the plaintiffs assented. This action is brought jointly against both the Burgers and Peay. The declaration contains three counts. The first count charges S. N. Burger as maker, and A. Burger and Peay as endorsers. The second count varies from the first in this, that instead of alleging an endorsement of the note by Peay to the plaintiffs, it charges that he delivered said note to them, with his written guaranty, &c. The third is.in substance a count proceeding upon the legal liability of Peay upon the note, arising out of the foregoing instrument of guaranty, which is set out in words. This latter count is certainly very inartificial in its form, and upon that ground might have been demurred to; but no exception was taken to the declaration, or either count thereof, upon any ground. The defendants jointly pleaded non asswnypsit, upon which issue was joined.

His -Honor, the circuit judge, was of opinion, and so instructed the jury, that the plaintiffs could not recover, on the ground of want of interest in the note, or title to sue thereon, as the guaranty was inoperative to vest in them the legal title to the note, although in a proper proceeding, it might be sufficient to make him liable for the amount of said note.

This is certainly a palpable case of misjoinder of parties and of distinct causes of action, and upon common law principles the objection would be available on demurrer, in arrest of judgment, or upon a writ of error, the objection appearing on the face of the declaration. Nor is this a case within the act of 1820, ch. 25, § 2, which provides that, “ In all joint actions founded upon contracts, whether debt or case, a discharge of one or more who may be thus jointly sued, -shall not prevent a verdict and judgment from being rendered against him, ber or them, wbo may be liable.” Here, there is no privity between the Burgers and Peay; no joint contract or liability. The liability of the Burgers on the note, as maker and endorser thereof, is wholly separate and distinct from that of Peay, whose name is not upon the note, and who is in no way liable thereon, and whose only liability is created by and rests , upon the guaranty. On no principle, therefore, is the joinder of these several parties and liabilities defensible. And but for the act of 1852, eh. 152, this action could not be maintained against either of the defendants. This is a very strong and universal statute of jeofcdls. The sixth section declares that no suit shall be dismissed for want of proper parties, or on account of the form of action, or for want of proper averments in the pleadings, and authorizes the court to change the form of action, and to strike out or insert the names of parties, either plaintiff or defendant, in the writ or pleadings, and to sujrply all proper averments.

But even under this statute, the present action can not be maintained against the Burgers for want of title in the plaintiffs to the note sued on. Nor are the defendants precluded upon the state of the pleadings, from availing themselves of this objection. It is true, that upon thé plea of non a&sumrpsii, not verified by affidavit, the maker cannot be permitted to deny the execution of the note, nor the endorser his endorsement thereof. But upon such plea, without oath, either is at liberty to urge, that from the plaintiffs’ own showing upon the face of the declaration, they have no legal interest in the note, and consequently can maintain no suit thereon.

But it seems to us, that under tbe statute before referred to, tbe action may be maintained against tbe defendant, Peay. It is true, tbe count upon bis guaranty is technically defective in its averments; but no exception was taken upon tbis ground. Tbe guaranty itself, upon which bis liability arises, is set forth in tbe count, and according to established forms of pleading, tbis is allowable. Tbe instrument, of whatever description, may be stated in tbe declaration according to its legal effect and' operation, or it may be set forth in tbe words of tbe instrument; and in tbe latter case, tbe court will put tbe proper construction upon it, and give it its proper legal effect. Cbitty on Pleadings, 367, 305, 307.

In tbis view, the technical objections to tbe third count are perhaps obviated.. But, if tbis be not so, they constituted no ground under tbe act of 1852, for defeating tbe plaintiff’s right of recovery, more especially as no exception was taken to tbe count, either as respects form or substance.

There is no force in tbe objection in tbe present case, that no application was made to amend in tbe circuit court, for tbe purpose of supplying the proper averments, pursuant to tbe act of 1852. Tbe general rule in respect to statutes of amendment and jeofails, is, that tbe amendment need not, in point of fact, be made. Tbe benefit of tbe statute is obtained by tbe Court’s overlooking tbe exception, or considering tbe amendment as made. S Black. Com., 407. 1 Saunders, 228, n. 1.

Tbe judgment will be reversed, and tbe cause be remanded.