Case ID: va_47/html/0633-01.html
Source: Caselaw Access Project
Author: {"author": "Baldwin, J.\n    ", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Richmond.
    Watson v. Hurt.
    1850. January Term.
    
    (Absent Cabell, P.)
    1. J executes to W a note, payable on demand, which is endorsed in blank by B, who thereby intends to guaranty the payment of the note. This blank endorsement imports a guarantee according to the terms of the note; and the guarantee cannot be altered by proof of a parol agreement at the time of the execution of the note, between J, B and W, that the note was not to be paid until the happening of a contingent future event.
    2. If five years elapse from the date of the note, before suit brought, it is barred by the statute of limitations.
    This was an action of assumpsit, brought in April 1843, by Thomas D. Watson against Branch T. Hurt, in the Circuit court of the town of Petersburg. The declaration contains a special count, and a count on an account stated. The special count set out the agreement as it was proved, except that it does not say whether it was by parol or in writing. The defendant appeared and pleaded non assumpsit, and the statute of limitations, on which pleas, the plaintiff joined issue.
    On the trial of the cause, the defendant demurred to the evidence, and the jury found a verdict in favour of the plaintiff for 591 dollars, with interest thereon from the 5th day of June 1837 until paid, subject to the opinion of the Court upon the demurrer.
    The evidence in the cause consisted of a note bearing date the 5th of June 1837, signed by James M. Hurt, by which he promised to pay to “ Thomas D. Watson or order, 591 dollars, on demand, with interest from the date, value received, the same being for money loaned ;” which was endorsed in blank by Branch T. Hurt; and parol proof by the plaintiff, that previous to the 5th of June 1837, the plaintiff, as administrator of Mrs. E. Dams, the mother of Mrs. James M. Hurt, had in his hands a sum of money, which, including interest to that day, amounted to 591 dollars. That some months previous, a chancery suit had been instituted in the Circuit court of Petersburg by Doremus and others against James M. Hurt and others, one object of which was to subject the money in the hands of the plaintiff to satisfy a debt due to them by James M. Hurt and J. H. Butler. That after the institution of the suit, the plaintiff agreed to lend the money to James M. Hurt, provided he would give his brother, the said Branch T. Hurt, as security; and accordingly, a negotiable note was prepared for 591 dollars, payable on or about the 5th of June, signed by James M. Hurt, and endorsed by Branch T. Hurt. About that time, it being probable that from the course pursued, the said suit would be depending for some time, it was proposed by Watson, and agreed to by James M. Hurt, that to save the trouble of renewing negotiable notes, a due bill should be given by James M. Hurt, and endorsed by Branch T. Hurt, carrying interest from the date, with the understanding that the money was not to be called for by Watson until the said chancery suit was decided. This arrangement was made known to Branch T. Hurt; and thereupon the negotiable note was given up by Watson, and the note aforesaid was executed by James M. Hurt, and endorsed by Branch T. Hurt, and was given to Watson to hold until the said chancery suit was decided : The agreement being that if, in said suit, it should be decided that Mrs. James M. Hurt was entitled to the money, Watson would not call for it, but if it was decided that the plaintiffs in that suit were entitled to it, then, it was to be paid upon Watson's requiring it. This understanding was stated to Branch T. Hurt, and known to him when he endorsed the note; and his intention in endorsing it, was to bind himself as security for James M. Hurt, for the payment of the money to Watson, if he should be decreed to pay it to any other person than Mrs. James M. Hurt.
    
    The chancery suit was not decided until June 1842, when by the decree in that suit, Watson was directed to pay the money to the plaintiffs therein, who were the creditors of James M. Hurt and Butler.
    
    It was also proved, that in June 1837, and for more than twelve months previous, James M. Hurt was notoriously insolvent, and so continued ever since; and that Watson refused to lend the said money to him, unless upon his giving security.
    Upon the decision of the chancery cause, Watson, in June 1842, demanded payment of the money, and told Branch T. Hurt that he was required to pay up the money; that James M. Hurt could not pay him, and he must. That Branch T. Hurt acknowledged he endorsed the note and was bound to pay the money, and was willing to pay him then, but that he did not like to sue his brother, out of whom he thought the money could be made; that he was anxious Watson should sue James M. Hurt as an act of justice to him; and that immediately it should be ascertained by such suit that the money could not be made, he would promptly pay the said sum of money due upon said note. That such suit was brought against James M. Hurt, judgment was obtained, and an execution was issued, which was returned “no effects.” There was no other evidence in writing of any promise of the defendant, than that evidenced by the endorsement on the note aforesaid.
    The Court below gave a judgment upon the demurrer to evidence in favour of the defendant; and the plaintjff thereupon applied to this Court for a supersedeas, which was awarded.
    The cause was argued in writing by Macfarland & Rhodes, for the appellant, and Gholson, for the appellee.
    For the appellant.
    The first count of the declaration describes with exact accuracy the contract proved on the trial. The only question then is, whether it be a contract which, either for the want of a memorandum in writing, or the statute of limitations, cannot be enforced.
    It might be enough to say, in reply to the objection, that the agreement was not in writing, that there is as much of the contract in writing as in any other case of endorsement. What is the ordinary case of endorsement, for the accommodation of the drawer, but a collateral undertaking for another; and yet who doubts that a simple blank endorsement is enough to charge the endorser ?
    But, then, the endorsement in question is admitted not to be a technical endorsement, for such an act transfers the endorser’s interest or title; and in this instance he had neither an interest or title to transfer. It was, therefore, an endorsement which rendered the party making it (Hurt) responsible for the engagement, which he did in fact assume, and intended to declare by writing his name. That such was its effect, and that it drew after it the right to charge Hurt with the agreement which he intended to assume by his blank endorsement, is well settled. Hill v. Lewis, 1 Salk. 133; Moies v. Bird, 11 Mass. R. 436. The last, both by the pleadings, and in fact, was a weaker case than this.
    
      It will be observed, that our statute differs from the statute of Charles II., in that it is enough that the promise, or some note of it, be in writing. Violett v. Patton, 5 Cranch 142; Colgin v. Henley, 6 Leigh 85.
    It would be strange if Hurt was not bound in some form by his endorsement; and yet how can he be otherwise bound than according to what both he and Watson understood and assented to at the time ? The mistake of the opposite counsel, is in supposing that an endorsement of the kind in question, is only to be explained by the tenor of the writing endorsed; (a proposition which may be true in the absence of evidence to ascertain what was actually intended;) whereas, it is held to mean exactly what it was intended and understood to express.
    Over a name in blank, the holder may write out the actual agreement, whatever it was; and if he go beyond it, and write a contract more onerous than was authorized, as a promissory note, or bill of exchange, for a larger sum, or at shorter date, than was understood, the abuse of confidence cannot be objected to an innocent assignee. Chitt. on Bills 33, 240; Doug. R. 514; 1 H. Bl. 313. A name in blank, then, being an authority to write above it the agreement of the parties, it follows that the contract of another party, in reference to which the blank was given, will control or explain it no farther than it was understood or agreed it should. That contract may be for the payment of a sum of money on a given day, and the agreement authorized to be written over the blank, may be a guarantee of the payment of the sum at an after day, and upon any condition for which the party may stipulate. It is, therefore, obvious that the two contracts, connected though they be by reason of their reference to the same debt, are, or may be, essentially variant; and as it is very clear that the collateral promise, imported by the blank, cannot bind the endorser for more than he actually agreed for, by reverting to the original agreement, so neither can it bind him for less.
    It is submitted that the declaration described truly . , the contract as proved on the trial, and that it is a valid contract, by every test which can be applied to it.
    This being conceded, and we know not how it can be denied, it is obvious the statute of limitations is not in the plaintiff’s way. By the agreement, as it was proved, Hurt was not to be called on until the decision of a suit in chancery, nor then, unless Watson was made liable for the money in question. That suit was decided against Watson in 1842, and this was commenced in 1843.
    The case comes directly within the principle, that wherever the plaintiff is to do something collateral before he can sue, the statute runs only from his doing that thing. Collins v. Benning, 12 Mod. 444. And again, where a fact, essential to the plaintiff’s right, lies more properly in the cognizance of the plaintiff than the defendant, the right against the defendant arises only upon notice being given to him by the plaintiff. See Follett’s Argument, and the cases referred to in Waters v. Earl of Thanet, 42 Eng. C. L. R. 903; Thorpe v. Booth, 21 Id. 468.
    
      Hurt, the guarantor, was certainly not bound to en-quire whether the debt had been paid, nor was he liable until he was notified of the default of the debtor. Nor, again, could a demand be made upon him until the conditions of his undertaking had been fulfilled. As against him, the statute could not run' until the suit was decided, the decision of that suit against the appellant being, by his agreement, the period fixed upon to date his responsibility. The fallacy of supposing that the statute of limitations applies, becomes apparent, when it is remembered that a suit by Watson against Hurt the guarantor, prior to the decision of the chancery suit, would have been premature, and must necessarily have failed, upon the express conditions of Hurt’s contract, Then, if the statute apply, the absurdity is presented, of the loss of the guarantee, if Watson wait until, when by its terms, he may demand its performance; and if he do not so wait, he loses by beginning an action before the right to sue had accrued.
    But even if the import of the endorsement was to be determined by the tenor of the promise of the principal, it is submitted as clear, that a promise to pay on demand, is not a promise to pay instantly, when in fact it was understood that the obligation to pay was contingent, and dependent upon a future and uncertain event. The principal in this case could have defeated the action, if it had been brought prior to the termination of the chancery suit; and by consequence, the guarantor’s responsibility began when it was at an end, and his principal shewn to be insolvent.
    It is in general true, that a note payable on demand is payable instanter ; the law presuming that the creditor has used his right in a manner most beneficial to himself; but when by the agreement he cannot call for immediate payment, but must await a future event, the law does not presume a demand in violation of his stipulations, and will allow the opposite party to shew the actual agreement, if the creditor attempt to evade it.
    For the appellee.
    The declaration in this case contains two counts.
    The first a special count, and the second on an account stated.
    It is not pretended, I suppose, that the plaintiff should have recovered on the second, as there is no evidence whatever to sustain such count. If, therefore, the plaintiff was entitled to recover, it must have been on the special count.
    This count shews a collateral undertaking—an agreement, if Watson would lend J. M. Hurt money, that he B. T. Hurt, would pay it, if J. M. Hurt did not.
    
      Such an undertaking must be proved to be in writing. 1 Smith’s Lead. Cases 213-14, &c., top paging ; Cutler v. Hinton, 6 Rand. 509; Waggoner v. Gray's adm'r, 2 Hen. & Munf. 603.
    Is there any written evidence, in the record, of such an undertaking? The only written evidence to be found, is the due bill executed by J. M. Hurt to the plaintiff, upon which the name of B. T. Hurt is endorsed. Can that paper be made to prove such an undertaking as the declaration sets forth ?
    Is it not a contract wholly unlike any which can be implied even from the note and endorsement ?
    The evidence may tend to shew, that the parties had contemplated such an agreement as the first count of the declaration sets forth, but the written evidence which is introduced, and by which alone the defendant is bound, shews that the parties did not reduce any such contract to writing; and the contract as written cannot be varied or contradicted by parol evidence. 1 Phil. Evi. 561, (Cowen & Hill, Edition 1839;) 1 Smith’s Lead. Cases 406 to 411, top paging.
    The note shews one contract—the second count is upon a different contract. The note would prove a contract to pay on. demand; the first count is upon an undertaking to pay after a decree in Doremus &c. v. Hurt and Watson.
    
    A collateral undertaking is void unless in writing, and in this case it is proposed to prove the undertaking by a paper which proves another and a different contract.
    The note, therefore, does not prove the case presented by the pleadings; nor is it competent to the plaintiff to prove by parol evidence, that this note was intended to mean a different thing; for if that were allowed, it would enable a party to prove a collateral undertaking by a writing, which writing unexplained, would establish a contract different from the one declared on.
    
      The plaintiff must prove a written promise to bind the defendant on this collateral undertaking; and the only evidence offered of a written promise proves no such promise as that declared on. For this reason, it there were no other, the demurrer to evidence should have been decided in favour of the defendant.
    But the defendant pleaded the statute of limitations. The note bears date 5th June 1837; the plaintiff’s suit was brought in 1843; more than five years from the date of the note.
    If the promise made by the defendant in 1842, be relied on to take the case out of the operation of the statute, that cannot avail. Such promise was not in writing. See act passed April 3d, 1838, “ amending the statute of limitations.”
    The plaintiff cannot say, that though the promissory note bore date 5th June 1837, yet it was agreed the money was not to be collected until the decree in the chancery suit; because that would be to change the date of the note, and that by parol evidence; which we have seen cannot be done.
    The statute of limitations runs from the date of a note, payable on demand. 1 Selwyn’s N. P. 136. The statute, then, began to ran in this case from 5th June 1837, and was a bar to the action when pleaded.
    Nor can the plaintiff rely upon the promise made by the defendant Hurt, in 1842, that if the plaintiff would institute suit against J. M. Hurt, and the money was not recovered, he would immediately pay; because, if such promise would bind him at all, no such special contract is declared on. The allegata and probata would not agree.
    The only written evidence of any promise by B. T. Hurt, is the simple endorsement of his name on the back of the due bill of J. M. Hurt to the plaintiff. It was his intention, according to the evidence, to become the security of J. M. Hurt, but there is no written evidence of any such intention. Can that intention be supplied by parol evidence ?
    Is there any “ written promise” without parol evidence ? Can you understand the meaning of “ B. T. Hurt” on the back of the due bill without resorting to parol evidence ? If not, do you not ascertain a promise by verbal and hot by written evidence ?
    In the case of Violett v. Patton, 5 Cranch 142, it was decided that a blank endorsement on a blank piece of paper, with intent to give a person credit, is, in effect, a letter of credit, and that a promissory note afterwards written on the paper binds the endorser. But in this case there was no such endorsement. It is not pretended that the name of B. T. Hurt was endorsed on a blank piece of paper. There was no intent that any thing should be written on the opposite side of the paper. J. M. Hurt executed his note and B. T. Hurt endorsed it, as it was agreed they should do. There was no further writing to be done. The plaintiff was not authorized to write one word on the due bill or endorsement. Indeed, if the contract upon which the plaintiff seeks to recover had been reduced to writing, it would have shewn a paper wholly unlike the due bill which is offered in this case as evidence of a promise in writing.
    It seems to me, therefore, that in any aspect of the case, the judgment of the Court below must be affirmed, because without the due bill, there is no written promise of any kind ; with the due bill, the “ written promise” is not that declared upon; and in addition, the statute of limitations is a bar.
   Baldwin, J.

delivered the opinion of the Court.

The ground of the plaintiff’s action, as stated in the first count of his declaration, (which is the only one applicable to the facts of the case,) is a collateral and conditional promise by the defendant, that a certain James M. Hurt should refund and pay to the plaintiff the sum of 591 dollars, with interest, provided and whenever a decree should be rendered against the plaintiff in a certain suit then depending against him. The declaration does not state whether the promise was verbal or written, nor was it necessary that it should; hut it was indispensable under the statute of frauds and perjuries, that the plaintiff should prove on the trial, that the promise was in writing, it being for the debt or default of another.

The only evidence of a written promise of the defendant, produced on the trial, is his blank endorsement on an absolute and unconditional promissory note for 591 dollars, money loaned, executed by J. M. Hurl to the plaintiff, and payable on demand, with interest from the date. This endorsement by the defendant, of his signature upon the perfect written contract of a third person, and his delivery of it to the plaintiff, indicates the intent to bind himself in some form for the performance of that contract, whether for payment of the note as surety for the maker, or as guarantor for its payment by the maker, or for either at the election of the plaintiff, we need not consider. The result would be the same in either aspect, and the plaintiff has himself treated the defendant as guarantor, and all the evidence shews that such was the intent of the parties.

The making of the note by the principal, and the endorsement of it by the defendant, were cotemporaneous acts; parts of the same transaction, and founded upon the same consideration. If at a time subsequent to the making of the note, a new agreement by parol had been entered into between the plaintiff and the principal, varying its terms by altering the time and event of payment, and upon the same being communicated to the defendant, he had assented thereto, and then endorsed his name upon the note, for the purpose of guaranteeing the performance of the contract in its modified state, the case would be a different one from that alleged in the declaration and proved by the evidence ; and it need not be considered, whether upon such a case, the plaintiff could recover.

In the case presented by the record, the endorsement of the defendant’s signature, and its delivery to the plaintiff, was an authority to him to fill up the blank with any promise consistent with the contract of the principal, upon which it was made, and conformable to the intent of the parties. If the note had been a negotiable instrument, payable to the defendant, and he had endorsed it in blank, his responsibility would have been that of an endorser. But the note not being negotiable or assignable by the defendant, being made payable to the plaintiff, the endorsement must be treated as an authority to fill up the blank with a promise of the defendant as surety, or as guarantor, the plain meaning of it being, that he should be responsible, which he could only be in the one form or the other. And when so filled up, actually or by supposition, the endorsement would be a written promise of the defendant to answer for the debt or default of another.

It cannot be doubted, therefore, that it was competent for the plaintiff to fill up the blank endorsement, with a guarantee by the defendant, for the payment of the money according to the terms of the note. But this would not have suited his purpose, for the note being unconditional, and payable on demand, his action would be barred by the statute of limitations, there being no subsequent promise in writing, such as is required by the amendatory act of the 3d of April 1838. And the only question is, whether the plaintiff can depart from the terms of the note, and consequently of the endorsement, and charge the defendant upon a verbal understanding and agreement in conflict with both.

It is perfectly well settled, that the terms of a written contract cannot be varied by parol evidence of what occurred between the parties previously thereto, or contemporaneously therewith. As against the principal himself, it would be inadmissible to prove by parol, that this money, instead of being payable on demand, and absolutely, was payable only conditionally upon the happening of a future event; and much more so, as against a surety or guarantor: as the result would be, to charge him by parol, directly in the teeth of the statute of frauds and perjuries.

Daniel, J. concurred in affirming the judgment.

Judgment affirmed.