Case ID: n-chip_1/html/0044-01.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

Rhodes vs. Risley.
    August term, 1791
    Action hy an the enlorsef of anote.
    Defendant’s counsel offered to prove the purpose of the which e™lnin Wank, and 'hat the note was paid and taken np by one Grant executor or ad-porker01’ the anFthatm(irant liad sold it to J g , who had sold it to the plaintiff, and the plaintiff endorsement to himseit.
    Action on the case for that on the 24th day of May, 1774, one J. Parker made his note to Risley, for the sum of ¿653 12s. 2d., payable in beef, pork, etc. That afterwards, to wit, on the same 24th day of May, 1774, the said Risley did, by his endorsement on the said note, order the said J. P., for value received, to pay to the plaintiff the said sum of ¿653 12s. 2d., etc., in due form. .
    The note, with the endorsement, was produced and read. Proved that Parker died insolvent about the year 1778.
    The defendant’s counsel stated, and offered to prove . that m the year 1781, the defendant employed one J 7 i J Pomroy to bring an action on the note, against one r\ 1. , . , r» urant, as executor, in his own wrong, on the estate or ^ ~ . . Parker ; want having married Parker s widow, and ° kaken the estate without administering; and thatRisley’s name was then put on the note for the purpose of filling n ,, m, . .. , a power ot attorney. That a suit was commenced . against Grant, who afterwards settled, paid Risley a . * J cerfca^n sum, about ¿620, and took up the note. That Grant put off the note to J. G., and J. G. to the plaintiff, who -filled up the endorsement to himself, and brought this action. And states that the defendant had never heard of the note since the year 1781, when Grant took it up.
    
      Plaintiff’s Counsel in objoction.
    Kirby’s Reiiy\nthis”tat£ tut reasons may be cited,
    teEroof admit"
    Argument of the chief Jusu°e on the question.
    yr0 custom tinssta™whiih can effect the auction,
    It was objected that if a note be endorsed blank, the endorser shall never be allowed to prove it was intended for some other purpose, and not to make him liable ; 1 1 7 # especially when it comes into the hands of a third person. Agreeably to this have been the determinations in Connecticut — Kirby’s Rep., 393, Hungerford vs. Thompson.
   By the Court.

Kirby’s reports are not to be cited as an authority here, nor are the determinations of . ... Courts m other States ; but you may cite their reasons.

After a full hearing on the objection, the Court were of opinion, dissentiente Paine, to admit the evidence. The following argument is inserted from memory — no minutes were taken at the time ; but it is the substance of what was said on the question.

Chief Justice — I have never been satisfied with , . . . . . those decisions which introduce an arbitrary custom, to ^ 7 bind a man contrary to his express agreement, and the real equity of the case. If, however, such customs have generally prevailed in a State, have been authorized by judicial decisions, and property be involved in its continuance ; it ought not rashly to be shaken. In this State, I apprehend, such custom as is here contended for, has not generally prevailed. There have , . . been no leading decisions m the Courts of law on the point. The matter, therefore, lies open to investigation.

It is said, if a man sign his name blank on a note, which he transfers, the endorsee may fill it up with a power, or a general endorsement, for value received; and from the nature of the transaction, the endorser shall be bound, and that he shall never controvert the right, notwithstanding any agreement made at the time of the transfer. We lay aside custom, and go on the footing of common justice between the parties. A. sells a note to B., and to enable B. to recover of the maker, endorses his name blank on the note. At the same time it is fairly agreed, that B. shall risk the ability of the maker of the note, and shall, on his failure, have no demand on A. In this case A. is, in common justice and honesty, under no obligation to B. on failure of the maker. Nay, B. cannot, with a good conscience, demand anything of A. The endorsement, though filled up by the endorsee, may be prima facie evidence of an obligation on the endorser; but it is only prima facie evidence, and, in justice, should be allowed to be controverted. What ought to be decisive in this case, is, that if the endorsee make use of the endorsement contrary to agreement, to the damage of the endorser, he is answerable in damages. This has been clearly decided in Great Britain, where the negotiation of notes is carried to its greatest length. This was the great point decided in the case of Moses vs. Macpherlan. Moses endorsed four notes to Macpherlan, under a special agreement, that Macpherlan should indemnify him against all the consequences of such endorsement. (Note — This agreement was in a seperate memorandum.) Macpherlan brought his actions, on the several endorsements against Moses, at an inferior Court. The Court refused to hear evidence of the agreement, and gave judgment against Moses, who, thereupon, brought his action against Macpherlan, to recover back the money so unjustly recovered. And it was solemnly determined, that an action well lay. This is to say, the endorser in such case is holden, and he is not holden. The evidence, which could not be admitted, to save him from ah unjust payment, could be admitted, and thought amply sufficient, in another action,' to recover back the identical money.

How far an endorser is responsible.

Endorsee can not demand contrary to bis agreement, a t the time of endursement.

Endorsement piiuia lueie evidence. bat may be controverted

If the endorsee make use of the endorsement. contrary to his agreement, he is answerable in damages.

Moses v. Macpherlan. 2 Barr 10.16, <&1 Black. 219 S. O.

Inconsistency of that determination.

However, it was observed by Lord Mansfield,in that action, that the inferior Court, did right in not going into the collateral agreement, otherwise they might have gone into matters which exceeded their jurisdiction, This reason seems to imply that a superior ’Court might, and would have gone into the whole matter.

t teinCcommon law’whttt ?

noté or a.c, endorsed blank by A- He trust to K. for themaS™0*

Let us now consider the nature of the transaction, as it stands, between the original endorser and the subsequent endorsees. And, in considering this point, I shall not feel myself bound by foreign precedents, but by the principles of the common law, which are the principles of common justice, as they apply to the general circumstances and situation of this Commonwealth. In Great Britain, they consider the endorsee as giving credit, as much to every prior, as to his immediate endorser. This, it is said, is established, by the course of trade, and is for the benefit of commerce.

This is, at least, problematical. But as this State is not, and from Ideal situation, cannot be greatly commercial, this may be laid out of the question. The case then will stand thus : A. sells a note to B., at the risk of the purchaser, and endorses it blank. In this case it is,unconscionable in B., on failure of the maker of the note, to demand the money of A. But B. has J sold the same note, still endorsed blank to C. The question is, whether B. can give a greater right than he had himself. A’s. name is on the note — this may prove that B., the possesser, has a right to use,, or sell,, and nothing more, independent of the custom. C. contracts with B., to B. he ought to look for the right, which he purchases, whether it be a right against the maker only, or whether A. is to warrant, in case the maker shall fail. If B. deceive C., he alone shall be answerable. The fraud of B. ought not to injure A. Let each trust where he contracts. Qaveat emptor— “ Beware, purchaser!” may, with great justice, be applied in this case. The same hard, technical reasoning has prevailed, iu some laws, against the makers of a negotiable note in the hands of an endorsee, where a payment, not minuted on the note, has been made before the transfer. But, in some of the neighboring States, the same principles of common justice, which I now go upon, have prevailed, in this point.' The Courts have made it a rule to allow all payments bona fide made before the transfer, or rather, before notice ; and the endorsee must look to the endorser for so much. This difiers only in name , the reasons go the whole length of the present case. The evidence ought to be admitted.

As to the other point, of a long time having elapsed without notice given to the endorser, it is on the part of the plaintiff to prove due diligence, and reasonable notice'of failure. It is not in the present question.

The evidence was admitted, and the Jury found a verdict for the defendant.