Case ID: miss_13/html/0310-01.html
Source: Caselaw Access Project
Author: {"author": "Mr. Justice ThacheR", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Samuel Moore vs. Tredwell S. Ayres.
    T. made his note payable to M. & A., which was indorsed by A. only, to S. M., who sued T. & A. in a joint action, under the statute of 1537. Judgment by default was rendered against T., and afterwards judgment upon verdict against A.: held, to be regular and legal.
    T. made his note payable to M. & A. jointly, which was indorsed by A. alone to S. M., who sued T. &. A. in a joint action ; judgment by default was rendered against T., but A. plead; S. M. filed a bill of discovery against A., alleging that A. assigned to him the note after due, and promised he would pay it if T. did not, and promised a second time to pay it after T. had refused; which bill was taken for confessed, and verdict rendered against A.: held, that the assignment, after due and promise to pay, dispensed with the proof of demand and notice, and that the verdict was correct.
    A note payable to a firm, and indorsed by but one of the firm, as a general rule, cannot be sued upon by the assignee ; but where the maker of the note and indorser are sued together, and the maker of the note makes no objection to the suit, and proof is made that the indorser indorsed it after maturity, and promised to pay it, held, that the action as against the indorser could be maintained by the indorsee.
    An allegation in a declaration against the indorser of a note, of demand and notice, is sustained by proof of a promise to pay after maturity, by the in-dorser.
    Where a new trial has been granted at law in a case in which the first verdict was correct, and a bill of exceptions has been taken to the grant of the new trial, and a second trial is had, and a verdict adverse to the first is rendered, this court will set aside the last verdict, and uphold the first.
    In error from the Carroll circuit court; Hon. Benjamin F. Caruthers, judge.
    Samuel Moore sued John T. Turner'and Tredwell S. Ayres, upon a note, of which the following is a copy, viz.:
    “ On the first day of January next we, or either of us, promise to pay Marsh & Ayres eighty dollars, value received, this 11th September, A. D. 1839. John 0. Turner.”
    On the back of the note was indorsed, T. S. & F. Ayres.
    The action was joint, under the statute of 1837, and the declaration, after charging the making of the note by Turner, was in these words: “And the said plaintiff avers that, afterward, when the said note was due, and payable according to the tenor and effect thereof, to wit: on the day and year aforesaid, at the county aforesaid, the said note was duly presented and shown to the said John T. Turner, the maker, for payment thereof, and payment thereof, then and there duly required, according to the tenor and effect of the said note, but that neither the said John T. Turner nor any other person or persons, on behalf of the said John T. Turner, did or would, at the said time, when the said note was presented and shown for payment thereof as aforesaid, or at any time before or after-wards, pay the said note, or any part thereof, to the said plaintiff, but wholly neglected and refused so to do, of all which said several premises, the said defendant, Tredwell S. Ayers, after-wards, to wit, on the day and year aforesaid, had due and legal notice; and the said plaintiff further avers, that on the day and year aforesaid, at the county aforesaid, when the said defendant, Tredwell S. Ayres, indorsed and delivered the said note to the said plaintiff, the said defendant, John C. Turner, was then and there wholly and entirely insolvent, and has ever since been insolvent, and is still insolvent.”
    The allegation of the indorsement and delivery of the note to the plaintiff, was in these words: “And the said Tredwell S. Ayres, to whom, and the said Samuel B. Marsh, the payment of the said sum of money in the said note specified, was to be made after the making of the said note, before the payment of the said sum of money therein specified, to wit, on the 1st day of July, A. D. 1842, at the county aforesaid, indorsed the said promissory note, by which said indorsement he, the said Tred-well S. Ayres, by the signature of T. S. & J. F. Ayres, then and there ordered and appointed the said sum of money in the said note specified, to be^paid to the said plaintiff, and then and there delivered the ¡jaid note so indorsed, to the said plaintiff.”
    The declaration was filed on the 28th of March, 1843, to the April term of that year, and the writ was duly served. Turner filed no plea; Ayres, at the return term, plead “non assumpsit.”
    
    At the October term, 1843, a judgment by default was taken against Turner. At this term a bill of discovery was filed by Moore against Ayres, who demurred to it, and the cause was continued, without disposing of the demurrer. At the April term, 1844, Ayres moved the court to dismiss the suit against him, because a judgment had been rendered at a former term against Turner, and the suit retained as to him. The motion was overruled. The demurrer to the bill of discovery was also overruled, and that bill taken for confessed. At the same term a trial was had, which resulted in a verdict for the plaintiff. A motion for a new trial was made and sustained, because the court had refused to instruct the jury as asked by the defendant — “ that the promissory note sued on being given to Marsh & Ayres, and indorsed only by Ayres, the jury must find for defendant, and because of the admission of improper testimony.”
    To the grant of this new trial the plaintiff excepted, and embodied the evidence in the record. That evidence consisted of the note sued on, and the bill of discovery, as taken for confessed. The substance of that bill was, that Ayres, for a valuable consideration, had, on the 1st of July, 1842, assigned to the plaintiff the note sued on, and at the time of his indorsement had promised and agreed, that if Turner did not pay the note, he would, and desired no suit to be brought upon it until his return from Kentucky; that this promise to pay was unconditional ; that the plaintiff had presented the note to Turner while Ayres was absent in Kentucky, who refused to pay it; that immediately on Ayres’s return he informed him of the refusal of Turner, when Ayres said he would immediately see Turner, and if he did not promptly pay the note, he himself would.
    At this trial the Hon. Morgan 3t. Fitch was the presiding judge.
    At the October term, A. D. 1844, another trial was had before the Hon. Benjamin F. Oaruthers, which resulted in a verdict for the defendant on the same testimony ; the judge, at the last trial, instructing the jury, “ that the interest' in a note made payable to a firm does not pass to a third' party without the transfer of each member of the firm; or, in other words, that the indorsement of one member of the firm will not vest in the transferree such an interest as will enable the transferree to maintain an action-.”
    Upon the rendition of the verdict in this last action, the plaintiff prosecuted this writ of error.
    Sheppard, for plaintiff in error.
    It was not error to enter judgment against Turner, the maker; before the suit was finally disposed of against the indorser. It would be error if they had been joint obligors. But the rule is based on the reason of a joint, or joint and several contract, and cannot be made to- apply to the case at bar, which is a joint-remedy, on distinct and several contracts. It is settled by frequent decisions of this court, that our statute on this subject does not affect the contract.
    The thirty-sixth section of the act seems to sanction this-practice, by providing, that if a new trial be granted to some of the defendants, judgment shall be entered against the others on-the verdict. How. & Hutch. 596.
    The court below erred in giving the defendant a new trial. Neither of the causes assigned for a new trial will warrant it. As to the first cause, we admit that it is true that all the payees should join in indorsing a bill or note, but the failure to do so raises only a question of title between the holder and the makers or acceptors of a bill, and in case at bar would have been good cause of demurrer for Turner, and even as to him the defect is cured under our statute of jeofails by the judgment of nil dicit. How. & Hutch. 591.
    The court was right in refusing to give such charge, for we cannot see how Ayres can dispute the title of his immediate in-dorsee, or claim to be discharged from his liability on this ground, having, as is shown by evidence, received a fair consideration for the note.
    
      The second cause for a new trial is equally untenable. On referring to the bill of exceptions, it will be seen that the evidence was regular and proper.
    But as it does not appear from the bill of exceptions that any objections were taken to the testimony, when it was offered on the trial, the objection to it, after verdict, would come too late.
    On the last trial, the court gave the instructions which had been refused on the first trial, and a verdict was found for the indorser. The bill of exceptions is, in substance, the same as was taken on the first trial.
    We ask that the last judgment be reversed, and the first affirmed.
    
      A. C. Baine, for defendant in error.
    The first point to be looked to, is to see whether the bill of discovery was sustainable. And, to test this, we must see whether, if the facts charged' in it could have been proved, without a discovery from the defendant, they-were admissible. For if the plaintiff could have proved these facts, by independent, uninterested witnesses, (and yet it would not have been admissible,) then certainly no discovery could be required from the defendant, and the demurrer ought to have been sustained,' and the bill of discovery excluded.
    The second point to look to, is, admitting the bill of discovery to the jury, did not the plaintiff prove himself out of court by establishing a fatal variance I
    And, thirdly, whether the charge of the court was not right., in any aspect of the cause, and therefore the last finding of the jury correct'?
    Now, as to the first point, I hold that a blank indorsement of a bill or note is a settled form of written contract, fixing and imposing certain well defined rights and liabilities, that are not to be varied or altered by mere verbal testimony. “A written contract merges all antecedent propositions, negotiations, and parol interlocutions on the same subject.” 1 Story Eq. sec. 160, p. 173, and the authorities cited; 14 Johns. R. 15. And the rule operates upon all matters collateral to the contract, as well as the contract itself. Stark. Ev. part iv. p. 1007. “It is inadmissible to prove that, at the time, a note of hand tvas transferred by indorsement in blank, that the indorser agreed to be liable, at all events, without demand of the maker, and notice of non-payment.” Barry v. Morse, 3 N. Hamp. R. 132. This fixes the first point, that the bill of discovery was inadmissible, and the demurrer to it ought to have been sustained.
    Now, as to the second point, the variance. The declaration is in the common form. The contract set out is one clogged with many restrictions, conditions, and limitations, namely, that, before resort could be had to the indorser, a demand must be made, in a reasonable time, and if not paid then, immediate notice of the non-payment to be given to the indorser. This is the contract sued on. The contract, as proved by the bill of discovery, was a simple, unqualified contract to pay, at all events, in the event Turner did not pay; a contract as distinct from the one set out as it is possible to make. Then this proof wholly unfitted the cause; then there is no showing on the record, entitling the plaintiff to recover; and though there were a dozen errors, all against the plaintiff, yet the defendant would be entitled to recover.
    Now, as to the third point, whether the charge of the court was correct. This court said, in Bennett v. Me Ganghy, 3 How. R. 192, “It is well settled that, where a bill is payable to two, it must be indorsed by both, in order to transfer the entire interest to the transferee.” This decision is hut in accordance with universal and unquestioned authority upon this subject. No case, asserting a contrary doctrine, can be found, I presume.
   Mr. Justice ThacheR

delivered the opinion of the court.

Writ of error to Carroll county circuit court.

This was an action of assumpsit instituted by Moore against Turner, the maker, and Ayres, the indorser of a promissory note. The note was made payable to Marsh and Ayres, but was indorsed by Ayres only. The declaration is drawn in the usual form against such parties to a promissory note, alleging •demand and notice, and also alleging the maker’s insolvency at the time of the indorsement and delivery to the plaintiff. At the return term of the writ, Ayres plead the general issue. At the following term, a judgment 'by default was given against Turner. A bill of discovery was at this term directed to Ayres, ■ to which a demurrer was filed, which, having been overruled, and Ayres declining to answer the bill, at the next succeeding term, the bill was .taken for confessed. At the term last mentioned, the trial also came on, which resulted in a verdict for the plaintiff, whereupon the defendant moved the court for a new trial, which was sustained, and a new trial granted. In this stage of the proceedings, the record shows a bill of exceptions to the judgment of the court below in sustaining the motion for a new trial, which bill of exceptions discloses that the motion for a new trial was based upon the facts that the court refused, pending the trial, upon request, to charge the jury that if the note sued upon was given to Marsh and Ayres, and Ayres alone had transferred his interest therein, the jury should find for the defendant, and that the court permitted the note and its indorsement, and the bill of discovery, to be read as evidence to the jury. At the next succeeding term, the new trial was had, and a verdict and judgment rendered for the defendant. In the course of this trial, a bill of exceptions was filed to the ruling of the court, which exhibits that the court charged the jury, at the desire of defendant’s counsel, that the interest in a promissory note made payable to a firm, does not pass to a third party, without a transfer of each member of the firm, or, in other words, that the indorsement of one member of a firm will not vest in the transferree such an interest as will enable the transferree to maintain an action. The bill of exceptions filed upon the court’s sustaining .the motion for a new trial, and the bill of exceptions filed during the course of the new trial embrace the bill of discovery to which a demurrer was originally addressed, and overruled by the court. The allegations of the bill of discovery are substantially these; that at the time the defendant indorsed and delivered the notes sued upon to the plaintiff, he promised the plaintiff that if the maker did not pay it, he would, and further desired the plaintiff not to institute suit upon it until the defendant returned from Kentucky; that, at the time of the indorsement, the defendant promised unconditionally, that if the maker did not pay-the note-on presentation, or by the time he returned from Kentucky, that he would; that during the absence of defendant, the plaintiff presented the note to the maker for payment, which was refused; that on defendant’s return from Kentucky, plaintiff notified him of the maker’s refusal to pay the note, and that defendant desired him to take no further steps, saying, that he would see the maker, and if he would not pay it promptly, he himself would pay it. It also appears, that the indorsement of the note was not made until long after its maturity.

The bill of discovery shows an agreement and promise to pay the note, entered into subsequently to the indorsement, and subsequently to the refusal of the maker to pay the note. Evidence to this effect would, under any circumstances, render the proof of demand and notice unnecessary to the maintenance of the action against the indorser. It is also settled, that a promise of payment which will dispense with proof of notice of dishonor, may be given in evidence under the usual averment of notice. The court below, therefore, did not err in overruling the demurrer to the bill of discovery. In regard to the refusal of the court below in the first trial to give the charge there requested, it may be said, that as an abstract principle of law, such a proposition is undoubtedly correct. It could have availed the maker upon a demurrer to the declaration, and, possibly, had he plead to the action. It was not, however, necessary for the maintenance of the action in the form in which it was brought, so far as the indorser was concerned, to introduce other than the proof adduced on the trial. The point has also been raised in this case, whether it was error, in an action of this kind, to take judgment by default against one defendant, and by verdict against another, in the same action. This has been decided in the negative in Lynch et al. v. Commissioners of the Sinking Fund, 4 How. 377. The verdict upon the first trial having been according to law, should not have been disturbed.

The judgment of the court below is therefore reversed, and a judgment directed to be entered for the plaintiff in error, in accordance with the verdict in the first trial.