Case ID: day_3/html/0012-01.html
Source: Caselaw Access Project
Author: {"author": "Livingston, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

April, 1808.
    Though a note is void as against the maker, it may be good against an en-dorsar, in fa-vour of an éndorsee,who took it inly-ing upon the endorsement.
    .The contract made by endorsement, extends to all future endor-sees, even where notes are not negotiable.
    
    George Codwise, jun. Peter Ludlow and James Codwise against Chauncey Gleason, Elijah Cowles, Jonathan Cowles, Gab Cowles, Seth Cowles and Martin Cowles.
    THIS case was argued on a plea in abatement, at the last term; a resfiondeas ouster was ordered; and the case continued to this term, for trial on the merits^.
    The declaration having been already stated at length, it may be sufficient to refer to that statement, without repeating it here ; but the case will be better understood by a statement of the following facts, in addition to those which appear on the declaration:
    
      Erastus Gay made a contract for a title to some Georgia lands with Peleg Sanford and another person, according to the terms of which he was obliged t® give them a note for nine hundred and forty-five dollars, payable at the Hartford bank, "with a good endorser. To comply with this contract, Gay induced Gleason fi Cowles to endorse the note in question; and after it was so endorsed, he delivered it to Sanford. It was then sold to Timothy Burr, but without any endorsement; and by him it was again sold to Codwise, Ludlow tí Co. for goods, and without any endorsement by Burr. It was after-wards endorsed by Codwise, Ludlow tí Co. and sent to John Dodd of Hartford for collection, and by him endorsed and lodged in the bank. As it was not paid when it became due, demand was made of Burr, as well as of Gay, and Gleason tí Cowles. After the note was taken from the bank, the names of Codwise, Ludlow tí Co. were erased, they having been entered merely for the purpose of collection. The suit in the name of Gleason tí Cowles against Gay, failed on the ground of fraud, and, consequently, of want of consideration in the contract, to comply with which the note was given. An action was then brought against Burr by Codwise, Ludlow ÍÍ Co., in which they claimed to recover of him as having sold, and thus become responsible for the note. His defence was, that though he sold, he did not warrant the note, but that it was received by the plaintiffs entirely at their own. risk. That suit id so failed ; and the present action was immediately commenced.
    On the trial, after all the material facts alleged had been either admitted or proved, the counsel for the defendants offered evidence to prove, first, that this endorsement was not intended to give a general credit to the note ; and, secondly, that the plaintiffs were, in reality, remote endorsees.
    
      Daggett, for the plaintiffs,
    objected to the testimony
    This endorsement by Gleason ÍÍ Cowles needs no explanation. it admits of none. No evidence, as to the inter.don of the parties can alter the legal mature of the irt-strument. This note appears to have been sent into the world under the sanction of the names of Gleason isf Cowles. So merchants would universally understand it, and so courts will consider it. -
    Livingston, J. Evidence that Gleason & Cowles endorsed the note, and gave it back to 'Gay,In order to give him credit; and that they never negotiated it, may have some important bearing on the case. Perhaps the same fraud which procured the note to be given, was used in obtaining the endorsement; and, if so, it may be properly laid before the jury. The evidence may, therefore, be heard.
    In the argument of the case, Ingersoll and Griswold, for the defendants, contended,
    1. The plaintiffs, cannot recover, because the note has-been decided,by a competent tribunal to be void. 'The endorsement must of course be void. The endorsement is in the nature of security; ánd where notes are not negotiable!, it can be viewed in no other light. It is the same thing, then, as if Gleason & Cowles had signed this note with Gay, as his sureties. And it must be, acknowledged that a surety cannot be holden, when the obligation of his principal is void,
    2. From the testimony which has been let in, it appears that the plaintiffs are remote endorsees, and the defendants never endorsed the note to them. There is no privity of contract between the plaintiffs and defendants. To decide that upon these facts the defendants are liable to the plaintiffs, would be giving to an endorsement all the efficacy which it has where notes are negotiable. On this principle, an endorser can alter the nature of an 'in-gtrument, and make that negotiable which was not so in its creation ; which is absurd.
    
      Daggett, for the plaintiffs.
    1. The contract of the endorsor is, in every case, that the sum contained in the note shall be paid when due, and for this payment he pledges himself to be responsible. It makes no difference whether the note is not paid by the maker because he is. unable, or because the instrument is void, or on account of any other impediment in the way of collection. Let the cause of failure of payment be what it may, the endorsor is liable. If the note is forged, the endorsor is still holden; and in a suit against an endorsor it is not necessary to prove the hand-writing of the maker.
    2. Nor is the contract made with the next endorsee only. It extends to all future endorsees. An endorsement in blank is a letter of credit to the whole world ; and every man who trusts to it, can recoyer of the endorsor. This principal is clearly illustrated and supported by the case of Russel v. Langstajfe, Doug. 514. where Lord Mansfield declared, that the defendant, by endorsing blank copper-plate checks, gave a letter of credit for an indefinite sum ; and that it did not lie in his mouth to say the endorsements were not regular. Indeed, this is a direct authority to both points ; for it not only decides the general liability of endorsors on account of having given their names to the world, but declares farther, that the endor-sor, is holden, though the paper endorsed was, at the time, amere nullity.
    
      
      
        Ante, p. 3.
    
   Livingston, J.

directed the jury, that as to the first point, though he had had doubts, they were almost entirely removed. If anote were forged, the endorsement would bind the man who made it .

The second point he declared not to have altered the decision of the case from what it would havebeen, if the were the only endorsees^ and the defendants the only persons through whose hands the note had passed, Gleason 1st Cowles gave the weight of their names to the world, and must be responsible to every man who trusts to the note relying on their credit, as every subsequent endorsee must be supposed to do, from the nature of the transaction. The case is, therefore, clearly frith the plaintiffs on both points. .

A verdict was accordingly found for plaintiffs to recover 1,599 dollars and 20 cents damages.