Case Name: George B. Chandler vs. George M. Mason
Court: Vermont Supreme Court
Jurisdiction: Vermont
Decision Date: 1829-03
Citations: 2 Vt. 193
Docket Number: 
Parties: George B. Chandler vs. George M. Mason.
Judges: 
Reporter: Vermont Reports
Volume: 2
Pages: 193–200

Head Matter:
George B. Chandler vs. George M. Mason.
Caledonia,
March, 1829. *
Information given in good faith to a party litigant) and disclosing the names of impair-tant witnesses in liis suit, maybe agood consideration for a note.
The endorsee of a note, void in its creation, may recover of the endorser without proving a demand of the maker.
|3ut if the endorsee would excuse his neglect to make demand of the maker, by showing the note to have been given without good consideration, he must prove the fact by such witnesses as would be competent to testify to the same.fact ina suit against the maker.
This was an action of assumpsit brought by the plaintiff, as endor-see oí a promissory note, against the defendant, as endorser. On trial in the county court the plaintiff, without proving, or offering to prove, that the note had been presented to the- maker, J. Brown, for payment, or that Brown had refused to pay it, offered to prove a want of consideration in the note ; to which the defendant ’ objected ; but the court permited testimony to be given to the jury tending to prove that point. The plaintiff then offered to prove the same fact by said Brown. This was objected to by the defendant on the ground that Brown was not a competent witness to impeach the consideration. This objection was also overruled, and Brown testified that the only consMeration of the note was the disclosure by the said Mason of the names of two witnesses, viz. Henry Jencks and his wife, who, Mason said, were knowing certain facts, which it was important f°r Brown to prove in a chancery suit he was then carrying on against Haydens & Culver. The plaintiff then offered the deposition of said Henry Jencks, which tended to show that neither he nor his wife knew any thing about the facts represented by Mason to be within his knowledge, But no other evidence was offered to show that Jencks’ wife did not know the aforesaid facts.
The court instructed the jury that upon the testimony, if believed, the plaintiff was entitled to a verdict. The jury accordingly returned a verdict for the plaintiff.
The defendant having excepted to the decisions and charge of the court, the case was removed to the Supreme Conrt on a motion for a new trial.
Mr. Shaw, for the defendant, contended — That the want of consideration in the note will not excuse the want of demand of payment of the maker, and notice back to the endorser; and cited the following authorities. 2 Stark. Ev. 271. — Smith et al. vs. Becket, 13 East, 187, note. — Free vs. Hawkins, 1 Hall’s Cas. 550. — JYicholsonvs. Gouthit, 2II. Black. Rep. 609.
That the maker of the note was not a competent witness to prove it to have been given without consideration ; and he cited the following authorities : 1 T. Rep. 296. — 1 Esp. Cas. 298. — 2 Stark. Ev. 298, (note 2.) — 1 JV. H. Rep. 60. — 3 Mass. 27.-4 id. 156. — 10 id.502. — 17 id. 94. — 3 Johns. Cas. 185. — 2 Johns, Rep. 165. — 15 id. 270. — 2 Dallas, 194. — 2 Yeates, 17. ’
The counsel also contended that the disclosure by the payee to the maker of the note of the name of Mrs. Jencks, as a witness, who could prove important facts in the suit Drown vs. Haydens & Culver, was a sufficient consideration for the note, and that the burden of proof, that she knew nothing of the case, rested upon the plaintiff. Dickson vs. Evans, 4 T. Rep. 57.
Mr. Mattocks, for the plaintiff, contended — That the endor-see in this case was like a drawer of a bill without eflects, and was not entitled to notice. 1 Wheat. JY. P. 255, 272, 284. — 1 Dane, 395. — Bickerdike vs. Bollman, 1 T. Rep. 405. — Good-ale vs. Dolly, id. 714. — Rogers vs. Stevens, 2, id. 717. — Gale vs. Walsh, 5 id. 239. — 2 Esp. R. 515.— Walwyn et al. vs. St. Quin-tin, 1 B. & P. 652. — Hammond et al. vs. Dupene, 3 Camp. 145. — Thacher vs. Blacket, id. 163. — Legg vs. Thorpe, 2 Camp. 310.— Cory et al. vs. Scott, 3 B. A. 619, (5 Com. L. Rep. 401.J — 2 Stark. Ev. 261,9. — 4 Cranch, 160,
That tlio case of an endorsee is, at least, as strong for the plaintiff as that of a drawer. ■ Haydenet al. vs. Adamson, 2 Burr. 67G. That the case of endorsing a void note is stronger, for bills are often accepted for the honor of the drawer. But to sell a void note is pure fraud, and notice could be of no use. 2 li. Blk. Rep. 33G.
That the maker of the note in this case is a competent witness to show that it was given without consideration. Jordaine vs. Lashbroolce, ct al. 7 T. Rep. 601. — Rich vs. Topping, 1 Esp. JV\ P. Cas. 175. — Broad vs. Ackerman, 5 id. 119. — Adams vs. Lingard, Peake's cas. 117. — Jones vs. Brock, 4 Taunt. 464.-— 2 Stark. Ev. 298, 299, 300. — 1 Con. Rep. 260. — Sw. Ev. 96, 205. — Hubly vs. Brown, 16 Johns. 70.
He also insisted that the note was given without any legal consideration; and cited Chit, on Cont. 12, 175. — 1 B. A. 171. —5 M. h S. 156. — 4 Moore, 300.

Opinion:
Near the close of the term the opinion of the Court was delivered by
HutchinsoN, J.
The plaintiff, as endorsee of the note in question, claims to recover of the endorser, the present defendant, without showing any demand upon Broivn, the maker of the note, for payment, or any refusal by him ; and, as is to be supposed from the case, without any notice to the endorser, that the note remained unpaid. He has attempted to excuse this neglect, by showing that the note was void in its creation for want of consideration : and has attempted to show this by the testimony of Brown, the maker. It appears by the case, if Brown gained •credit, that the only consideration for the note of twenty dollars was the payee's informing Brown of two witnesses who, he said, knew, and could testify to, important facts in Brown's suit in chancery against Haydens and Culver. It is contended that this forms no good consideration; Jencks having testified that neither ho nor his wife knew any thing about said matters which Brown wanted to prove- On the contrary, the defendant urges the necessity oftho plaintiff's producing also the testimony of Jcnck's wife, to support the position he takes. The Courtconsider that such information,given in good faith, and furnishing Brown with important testimony in his suit then pending, might furnish a good consideration for the note ; especially when the witnesses named are third persons. If Mason had named himself and wife, it might be otherwise: for he ought not to be permitted to speculate upon his own testimony so as to profit by it in this way. But the plaintiff contends the witnesses knew nothing to the purpose. Jencks testifies that he knew nothing about the business, nor his wife neither. He can Swear as t0 own knowledge, but not as to that of his wife. If h appeared by the case that the defendant had recovered in his chan-eery suit, by means of this disclosure of witnesses by Mason, whether the testimony came from them both, or only from one of them, the consideration might be considered good. But no such thing appears 5 and it is no improbable conjecture, from what is stated, that Brown was in need of two witnesses to meet the answers of the respondents in bis suit in Chancery ; and that one would answer no purpose whatever. In this view the proof was sufficiently extensive to establish, prima facie, the want of consideration. What opposite testimony might be in the power of the payee we cannot tell. The case mentions none on his part.
The next question proper to be considered is, the legal effect upon this suit of such want of consideration in the note, if support-led by proof? There can be no doubt, either upon principle or authority, but that the endorsee may forthwith sue the endorser, and recover, if he can clearly show the note thus endorsed to be a mere nullity, and the sale to him a fraud. In such a case he need not wait till the note becomes payable, nor demand payment, nor give notice back. But whether his action should be upon the endorsement in common form, is a matter of more doubt. He might declare for goods sold and delivered, or for money had and received, as the case might be, and it] would be no defence for the endorser to say that he received the goods or the money in pay for a note thus endorsed, if, at the same trial, it should appear that the note was void. The English cases generally, when these questions arise, appear to contain the money counts. This, at least, is safe and proper. With these the endorsee needs no special count upon the endorsement, when he can 'show the note originally void.
Every case-of this kind must rest, in some degree, upon its own circumstances. If the endorsee has kept the note till after it is payable, and then declares only in the special count upon the endorsement, which should contain an averment of demand and notice, or what is equivalent, a fruitless search to make demand and notice back, it would seem wide from the ¡issue for the plaintiff to come in with such proof of fraud in the sale oí the note as might entitle him to recover on the general counts. A doubt has been raised in the courts in JYew-YorJc whether a declaration in common form upon an endorsement, averring demand and refusal, is supported by evidence of a fruitless search to make such demand. It was decided in the affirmative. Justice Van Ness was of a contrary opinion. See Anthon's Nisi Prius, p. 3d. and the notes appended. In the case before us, we have no copy of the decía- ration, but we understand it contains only the special count upon the endorsement. As the plaintiff's testimony was objected to, in toto, this question is presented in the case; but as it has not been urged by counsel, we would not decide the case upon it without first soliciting argument. I am willing to say, for one, it presents no small difficulty. None of us however entertain any doubt but that the plaintiff, upon a proper declaration, and clearly establishing the fact that the note endorsed was without consideration and void, might recover of the defendant without showing a demand of the maker.
This leads to the question whether Brown, the maker of the note, was a competent witness for the plaintiff, under all the circumstances of this case, to prove the want of consideration ?
There is no pretence that the decision of this action either way can directly affect Brown's interest. He is liable to pay nothing more than the note and interest; and he is at all events liable for so much, unless, when sued upon the note, he can furnish some defence without the aid of his own testimony. He undoubtedly feels a strong interest in the question when it shall arise in another form, but that, according to the settled law, only goes to his credit.
According to the decision of Walton vs. Shelly in 1 Term Rep. and numerous decisions in Massachusetts and New-York, (see 1 Caines, 270, Baker vs. Arnold, and Anthon's Nisi Prius, 7, Cummings vs. Fisher,) the witness would be excluded from testifying to that which would show the note originally void by his having signed his name to the note and given it a credit. Yet he would be admitted according to Jordaine vs. Lashbrook, 7 Term Rep. 601, overruling Walton vs. Shelly, and followed by numerous Nisi Prius decisions in England, and followed by this Court in the case of Nichols vs. Holgate el al. 2 Aikens' Rep. 138. We have had a sad comment upon that decis-cision. Lamb had conveyed his equity of redemption to Holgate, deducting from the price the sum due upon the' mortgage. On a bill to foreclose the equity of redemption, Holgate answered, setting up usury. His answer was traversed, and he produced the testimony of Lamb to prove the usury, on the authority of Jordaine vs. Lashbrook et al. and the after decisions in England, we admitted his testimony, and on the credit of it, deducted the usury, amounting to $200 or more. At the late term of this Court in Chittenden county we found a suit upon the notes included in said mortgage, in which Lamb had made a successful de-fence, before the county court, by pleading the said decree of foreclosure, and averring payment of the sum ascertained to be due on the foreclosure. The Court, on hearing the chancery suit, > considered that the decree could be no bar to an action upon tbs notes, and that Lamb was testifying against bis own interest by " diminishing the sum due upon the mortgage, and leaving the sum deducted to remain due from him on the notes; and, on this ground, considered it a strong case within the late decisions in England. But, if the decree in that case could have the effect Lamb contended for, when sued upon the notes, his testimony would have been wholly in favor of his own interest.
In this suit upon the notes against Lamb, we granted the plaintiff a new trial, following up the views the Court entertained when making the decree of foreclosure, and refusing to suffer Lamb to enjoy the benefit of a decree procured by his own testimony. — • [See 1 Verm.Rep. 895.] — Still we discover an injury that results from our deserting the principles in Walton vs. Shelly, and following those in Jordaine vs. Lashbrook et al. We see that the orator has lost his lien upon the land with regard to the sum called usurious, and must trust alone to Lamb for collection : which cannot be right if the money is due the orator, and we may well suppose it due, if the promissor can furnish no defence when sued upon his promise. I always considered [the case of Walton vs. Shelly, to exhibit the better law. But on the investigation of authorities adduced on the hearing of Nichols vs. Holgate, et al. I went with my brethren, considering that case overruled by Jordaine vs. Lashbroolc et al. and that followed down to the present time. And I now perceive that Siarhie considers it to be the settled law in England, that each man whose name is on negotiable paper, may testify in a suit to which he is not a party : nor does he confine it to cases where the facts to be proved arose after the paper had once possessed a legal existence. That such a witness is competent to show a note paid, though not so to prove it originally void, see Anthon's N. P. p. 9, (note a) and the authorL ties there cited.
I am not perfectly willing, in the absence of the Chief Justice, who delivered the opinion in the case of Nichols vs. Holgate et al. to go in direct opposition to the decision in that case. Though all my brethren who have heard the. argument of this case are inclined against admitting a witness under like circumstances ; and T understand from Justice Prentiss that he has'always inclined that way, and decided this case in the county court on the authority of the decision of JYichols vs. Holgate et al. I cannot but perceive a striking difference between admitting a witness who is interested in a similar question that may or may not arise, and one who is interested in the very question whenever it arises between new parties, the witness being one of them. It must, at least» produce a different effect upon the credit of the witness ; and, if admitted to testify upon the broad basis laid down in Jordaine vs. Lashbrook, et al., and in 2 Starlcie 298-9 and 300, each of the persons whose name has given credit to the note, proving it void when the others are parties to the suit, it must operate a fraudulent injury somewhere in most of the cases. Each innocent endorser and endorsee acts upon the faith of all the names before on the bill or note, and, if one of these can be admitted to swear the note void in its creation, that destroys a portion of the security to which all have in good faith placed confidence. In every such case some person must be wrongfully injured, unless some one who endorsed knowing the circumstances which render the note void, proves able to pay the amount when called upon for that purpose.
It is also worthy of notice here that the decision in the case of Walton vs. Shelly rests on the broad basis of fair deal among men, which is the best support of the credit of negotiable paper : while the decision in the case of Jordaine vs. Lashbrook et al. rests on the more limited policy of preventing evasions of the stampt act. This last seems to have been generally followed at Nisi Prius in Bngland without stirring the question at law.
In the case of Buckland vs. Tankard, 5 Term. Rep. 578, which was before that of Jordaine vs. Lashbrook et al. one Gregson drew the bill in question on Tankard, payable to his .own order, and by him endorsed blank. Tankard, having first released Gregson, offered him as a witness to prove that the plaintiff had no interest in the note, but that it was delivered him by tho witness thus endorsed, to enable him to receive the money for the witness. Gregson was excluded on the ground of interest; Grose, Justice, adding as a reason, his name's being on the nego--tiable paper. In Copp vs. M'Dugall, 9 Mass. Rep. 1, the plaintiff recovered of the endorser without proving demand on the maker; that is, without a seasonable demand and notice : for he h^d sued the maker and failed to recover, and had at some time given notice to the endorser of non payment; for what he said on the occasion was proved against him, in dispensing with a seasonable demand. But the maker of the note was not used as a witness.
In the case now under consideration several things concur which show it difficult to sustain the verdict. The plaintiff has declared upon the endorsement, merely; has excused himself from proving any demand of the maker by proving the note to have been given without consideration; and has proved that by the maker himself. It does not, it cannot, appear that Brown, the maker of the note, would have refused payment if de manded, or set up any defence, if sued upon the note. He could not have set up this defence, unless he could support it by other witnesses than himself. Should this verdict stand, the judgment upon it would revest the note in Mason, the endorser. He may sue the note and recover for aught that now appears, for Brown could not testify against him. In the mean time, Brown may have become insolvent, whereby Mason must lose the debt, in addition of paying the cost of this suit. Both which losses might have been prevented by such demand and notice as the law requires. Mason, if prudent, on receiving notice of nonpayment, could have paid the plaintiff and sued Brown himself; or agreed with the plaintiff for him to sue Brown, instead of pursuing the defendant as endorser. It does appear to me, that, if the plaintiff will excuse his neglect to call upon the maker of the note by proving it originally void, he must prove that fact by such witnesses as would be competent to testify to the same fact in a- suit against the maker.
J. Mattocks, for plaintiff,
Geo. B. Shaw, for defendant.
We are all agreed in reversing the judgment of the county court, and granting a new trial in the action.
After the above judgment was announced, the plaintiff's counsel moved for leave to amend the declaration, by adding the general counts applicable to the case, which was granted upon their entering into a rule, that, if the plaintiff should finally recover on the new counts, and not on the old one, he should recover no cost that has hitherto accrued, and shall also pay the defendant his back cost.
New trial granted..