Case Name: Joseph Stout against William Stevenson
Court: New Jersey Supreme Court
Jurisdiction: New Jersey
Decision Date: 1818-09
Citations: 4 N.J.L. 178
Docket Number: 
Parties: Joseph Stout against William Stevenson.
Judges: 
Reporter: New Jersey Law Reports
Volume: 4
Pages: 202–207

Head Matter:
Joseph Stout against William Stevenson.
in ERROR.
Assignment
THIS cause was brought by writ of error, from the Common Pleas of the county of Salem. By the record, the following case appeared. The action was brought by the endorsee against the endorser of a sealed bill, and the declaration in the first count sets out, that Joseph BilderbacJc, on the 18th of October 1809, gave his sealed bill to Joseph Stout and assigns, to pay 75 dollars, four months after- the date, without defalcation or discount, for value received ; that Joseph Stout, before the payment of the bill, viz. on the 27th of June 1810, endorsed it, in the following words, viz. “ June 27, 1810. I do sign all my right and title, interest and claim, of this within note, to William Stevenson, and guarantee the payment thereof. Joseph Stout;” of which endorsement, Joseph Stout had notice on the same day; that afterwards, viz. on the 29th of March 1813, the note was presented to the maker, and payment requested; but was refused; of which, on the same day, Stout had notice; and an assumpsit was added. The second count is in the usual form, for money lent and advanced, paid, &c. To this declaration, the defendant Stout, pleaded non assumpsit. In June term, 1815, there ivas a trial and verdict for the plaintiff, for 115 dollars, 64 cents. A rule to shew cause why a new trial should not be granted, was taken; but at September term, 1816, it was discharged, and judgment entered in favour of Stevenson, the plaintiff, according to the finding of the jury. After which the writ of error was sued out.
The assignment of errors, after the general ones, adds the following. “ That it appears by the record aforesaid, that the said endorsement was made on the twenty-seventh day of Jume, in the year eighteen hundred and ten, and no demand made on the maker of the said sealed bill, until the twenty-ninth day of March, eighteen hundred and thirteen.”
Jeffers for plaintiff in error, argued.
1. Stevenson is not entitled to recover, after holding the bill from the 27th of June 1810, to the 29th of March 1813, almost three years, without demanding payment of the maker. If this is to be considered as a common endorsement, upon a promissory note, Stout is discharged. First, by want of notice. This court has decided that notice is necessary to make the endorser liable. We have adopted the English law on the subject. Pen. Rep. 916, 917, 982. Also in a recent case decided in this court, Ferris v. Saxton. 2. By want of diligence. Certainly it was not using due diligence to keep the note or bill three years without ever presenting it to the maker for payment. 3 Selwyn, N. P. 996-7-8. 2 Bur. 676. The plaintiff ought to shew, in his declaration, a demand or due diligence to get the money from the maker of the bill. 2 H. Black Rep. 609. 1 Coxe, 86. This case is much stronger than the case in Coxe, and that case was decided on the ground, that the plaintiff had not used due diligence. The case in Coxe, was upon a sealed bill, and was decided as if it had been a promissory note; it was called a note by the court, and by the counsel.
An endorsement, or as in this case, an assignment, is only a conditional undertaking to pay, if due diligence be used on the part of the endorser or assignee. It is so laid by lord Mansfield, in 2 Bur. 677. So in 4 Oranch, 161, No man ought to be held liable upon a contract, further than he has consented to bind himself. If his contract was conditional, he cannot be absolutely bound until the condition is performed.
2. If this is to be considered as a case upon a sealed instrument, there not being any special covenant under seal; it comes within the decisions of this court, in the case of Garritsee v. Van Ness, Pen. Rep. 20. Administrators of Harris v. Clark, ib. 158. Davenport v. Barnes and Barnes, ib. 212.
* Armstrong in answer, remarked;
that the doctrines, maintained by the counsel of the plaintiff in error, were applicable to endorsers of promissory notes; but that between them and sealed bills, in this respect, there are distinctions, settled at this day, beyond all question. This case, presents the liabilities of the assignor of a sealed bill, who guarantees its payment. Were it a simple endorsement of a promissory note, the party not having-shewn the due diligence required, must fail. Were it a simple assignment of a sealed bill or bond, the assignee could not go back upon the assignor. But the nature and form of the assignment; relieves the case from all difficulty, and gives the assignee ample right to recover upon the assumpsit' which the defendant has given. The right of filling upa blank endorsement, can neither enlarge or contract the plaintiff’s rights; it must always be filled up according to the nature of the instrument, and the legal rights of the parties.
Jeffers in reply.
The words “ guarantee the payment” do not alter the legal liability of the endorser or assignor. He guarantees the payment on condition that the holder shall use due diligence. An assignment in blank would have given the plaintiff authority to fill up the assignment with the same words. It was so adjudged in the case of Hungerford v. Thomas, Kirb. Rep. 393. The definition of the word guarantee, it is true, is a stipulation for the performance of some thing by a third person. But it must be taken with reference to the thing to be done; and to the law on the subject. It cannot be said, these words, guarantee the payment, supercede the necessity ■ of notice and diligence, on the part of the person to whom the assignment is made; or that the assignee having such an assignment may lock up his note or bond, until the maker has become insolvent, or has absconded, and then resort to the endorser or assignor, without notice. The reason of notice and diligence, is, that the endorser may secure himself, which he never can do, unless notice of non payment is given by the holder.
Liability of guarantor. Force vs. Craig, 2 Hal. 272. Sibley vs. Stull, 3 Gr. 332. See Morris Canal vs. Van Vorst, 1 Zab. 100. Pintard vs. Davis, 1 Zab. 632. Grover vs. Hoppock, 2 Dutch 191. Paulin vs. Kaighn, 5 Dutch. 480, 501. Solomon vs. Gregory, 4 Har. 112. Whether the assignee could sue in his own name, see Carhart vs. Miller, 2 South. 573. Moffett vs Bolmer, Pm. *712. Bennington Iron Co. vs. Rutherford, 3 Har. 158. Sheppard vs. Stites, 2 Hal. 90. Winfield vs. City of Hudson, 4 Dutch. 255. Allen vs. Pancoast, Spen. 68. Gregory vs. Freeman, 2 Zab. 405. Rowe vs. Hoagland, 3 Hal. Ch. 131. Kamena vs. Huelbig, 8 C. E. Gr. 78. Matlack vs. Hendrickson, 1 Gr. 263. Belton vs. Gibbon, 7 Hal. 77. Halsey vs. Dehart, Coxe 93. Obligations, Nix. Dig. 630 § 2. Richardson vs. Beaumont, Spen. 578. Ruckman vs. Outwater, 4 Dutch. 571. Morrow vs. Inhab. of Vernon, 6 Vr. 490. 4 Griffith’s Register 1311.

Opinion:
Kirkpatrick C. J.
This was an action on the case in Salem Pleas. The declaration sets forth, that on the 18th of October 1809, one Bilderback, by his obligation sealed with his seal, bound himself to pay to Stout, the plaintiff in error, four months after date, the sum of 75 dollars ; that on the 27th of June 1810, * Stout assigned the said bill to Stevenson, the defendant in error, in these words, " June 27th, 1810. I do sign all my right and title, interest and claim of this within note to William Stevenson, and guarantee the payment thereof. Joseph Stout," of which assignment Stout then had notice; that on the 29th of March 1813, Stevenson demanded payment of Bilderback, which was refused, and that Stout, in consideration of the premises, having become liable, undertook to pay, &c. There is also another count for money lent and advanced. The defendant pleaded the general issue, and the cause was tried by a jury, and a verdict and judgment for the plaintiff. That judgment is now before this court on a writ of error.
*181
The principal error assigned, is that it appears by the record, that is by the first count on the declaration itself, that the said bill was endorsed, June 29, 1810, and no demand made on the maker, till March 29, 1813.
Before the statute making bonds assignable, &e. the assignee of a bond or bill, in a court of law, was considered only as the agent or attorney of the assignor to recover the money, with an equitable lien thereupon, to reimburse himself for what he had advanced upon the assignment; and if he made use of all that diligence for the recovery of it, which a faithful agent or attorney ought to use, and the money were lost notwithstanding, was lost to the assignor, and that upon the strictest legal principles. Since the statute, the assignment passes the legal right, and bonds and bills are bought and sold like other personal property, and the buying and selling of them is governed by the same law.
A simple -assignment, therefore, subjects the assignor to no other responsibility than the simple sale of any other property; but if to the assignment he adds a warranty, or, as it is here expressed, guarantees the payment, in general terms, that warranty or guaranty is absolute and coextensive with the instrument itself. The warrantor becomes a surety for the payment at the day, if the instrument be assigned before it is payable; and on demand, if afterwards. Bonds and bills have no resemblance to promissory notes, nor is the assignment of these at all to be likened to the endorsement of those, or subjected to the same rules.
Besides, even before the statute, the only question, in these cases, between the assignor and the assignee was as to due diligence, which was always a question of fact, to be tried by the jury, and therefore however a misfinding might be corrected by granting a new trial, it never could be so by writ of error.
But even if the first count in the declaration were faulty, the defendant can make no benefit of it in this way, for there is another count against which no objection is preceived; and by the statute relative to juries and verdicts, it is provided that where there are several counts in a declaration, some of which are bad and faulty, and others not, and entire damages are given then the verdict shall be good and effectual. In every view of the case then, I think
The judgment must be affirmed.
Southard J.
This is a case of assignment of a sealed bill; and the right of recovery rests on the warranty tained in the body of the assignment itself; without it, he could not recover; and he must rest upon its force and obligation. What then is it ? It is not, that the bill should be paid according to the rules of mercantile law. That, from the facts, was plainly impossible. It was not that it should be paid when it became duo. The day was already past. It is in its terms and must so be considered, a general warranty of payment when demanded ; an unwise one, it is true, but such as the assignor had a right to make and chose to make. If he chose to limit it as to time, he might have done it, but he has not so done, either in the assignment itself, or shewn it upon the record, I think the recovery right.
By the whole court. Let the judgment of the Common Pleas of Salem be affirmed.
What is sufficient proof of due diligence. Mehelm vs. Barnet, Coxe 86. Disborough vs. Vanness, 3 Hal. 231. Washington Bank vs. King, 2 Gr. 45. Barkalow vs. Johnson, 1 Har. 397. Woodruff vs. Daggett, Spen. 526. Howland vs. Adrain, 1 Vr. 41. Moran vs. Green, 1 Zab. 562. Freeholders, &c., vs. Thomas, 5 C. E. Gr. 39.
Harrison vs. Newkirk, Spen. 176. Browning vs. Skillman, 4 Zab. 352. Stewart vs. Fitch, 2 Vr. 17. Middleton vs. Quigley, 7 Hal. 352. See Farwell vs. Smith, 1 Har. 133. Potts vs. Clarke, Spen. 536. Gaskill vs. Overseer, &c., 7 Vr. 356.