Case ID: mass_8/html/0387-01.html
Source: Caselaw Access Project
Author: {"author": "\n      By the Court.\n    ", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

* Ward N. Boylston versus David Greene.
    When a note has been paid by the last endorser, it ceases to be negotiable; but his assignee may maintain an action upon it against the prior parties to the note in the name of the assignor; and the Court will prevent his interference to defeat the action.
    Assumpsit, in which the plaintiff declares, as endorsee, against the defendant, as endorser, of a promissory note made by one John R. Greene, dated April 21st, 1807, payable to the defendant, by him endorsed to one Thomas Lathrop, and by him to the plaintiff, being payable in sixty days from date with grace at the Norwich bank.
    On the trial of the action upon the general issue before Parker, J., it appeared that the said Lathrop had procured the note, soon after its date, to be discounted at the Norwich bank, and had received therefrom the sum therein expressed ; that at the expiration of the sixty days and grace, neither the said John R. Greene nor the defendant having paid the same, the said Lathrop paid the said note at the said bank, and having taken it up, afterwards endorsed it to the plaintiff.
    The judge directed the jury, that after Lathrop had thus paid and taken up the note, it ceased to be negotiable, and therefore that the plaintiff could not recover. And the jury having returned a verdict for the defendant, the plaintiff moved for a new trial, for the misdirection of the judge.
    
      Bigelow, in support of the motion, argued that the note still continued negotiable, after being taken up at the bank, unless it came within the principle of the decision in the case of Blake vs. Sewall. 
       But the facts in this case are very different from the case referred to. There the payment was by Pomeroy, the real debtor ; and when he had discharged it, the note was functus oficio. Here the real debtors neglected to pay, and the action is against one of them. That was a fraudulent attempt to obtain payment of an endorser, who had lent his name for the accommodation of Pomeroy, who could never have maintained an action against any of the parties to the note. In the case at bar, Lathrop had a right of action against the prior parties to the note, as soon as he had taken it up, *just as if he had kept it in his pocket the whole sixty days; and that right he could lawfully assign to the plaintiff.
    
      Prescott, for the defendant,
    insisted that the note, having been paid by one of the parties liable upon it, was discharged of its office, and from that time ceased to be further negotiable. The last endorsee was the Norwich bank ; and to that it was duly paid by Lathrop. By that payment he became the creditor of the prior endorser and the promiser in a new right, and quite distinct in its nature from the right which he had originally on the note. 
    
    
      
       3 Mass. Rep. 556.
    
    
      
      
        Chitty on Bills, 115. — 1 H. Black. 89. — Beck vs. Robley, Bull. N. P. 271.— 1 Esp. Rep. 463.
    
   By the Court.

The question in this case is, whether the note declared on continued to be capable of negotiation after it had been paid by Lathrop, the last endorser. In such case there would be no inconvenience in considering the note still negotiable, having been paid by the last endorser, for he has a full and complete right upon the note against the maker and all prior endorsers, and their situation would not be made worse in any respect by their obligation being transferred to another.

But we find the rule laid down generally, that by payment of a bill or promissory note, the contract of the parties to it ceases, so far as to prevent their being subject to new engagefnents; and an endorsement cannot be made after it, so as to affect any of the parties, except the person making it.

The whole effect, however, of this rule is to make a difference in the form of action, as it respects the nominal parties. The maker and prior endorser are still liable on their respective engagements ; and the plaintiff, having a bona fide transfer of the note from Lathrop, may maintain an action in Lathrop’s name against, either of them ; and the Court will see that no interference of the nominal plaintiff shall prevent a recovery,

Judgment on the verdict. 
      
       [This decision is erroneous, and has been overruled. Guild vs. Eager & Al. 17 Mass. Rep. 615. — Ed.]