Case Name: Cornelius W. Carnwright, Resp't, v. Morgan Gray et al., Ex'rs, App'lts
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1890-09-25
Citations: 33 N.Y. St. Rep. 98
Docket Number: 
Parties: Cornelius W. Carnwright, Resp’t, v. Morgan Gray et al., Ex'rs, App’lts.
Judges: 
Reporter: New York State Reporter
Volume: 33
Pages: 98–108

Head Matter:
Cornelius W. Carnwright, Resp’t, v. Morgan Gray et al., Ex'rs, App’lts.
(Supreme Court, General Term, Third Department,
Filed September 25, 1890.)
1. Bills and notes—Consideration.
The action was upon a promissory note as follows: " Quarryville, September 2, 1871. Thirty days after date I promise to pay to Cornelius W. Carnwright, fifteen hundred dollars, with interest. Samuel P. Freligh.” Held, that, although no consideration was expressed and the note was not negotiable, yet, if genuine, it imported a consideration and the burden was upon the defendant to overcome this presumption
2. Same.
A note not negotiable is still regarded as a promissory note, and it differs from a negotiable note in that an endorser thereof is regarded as a maker or guarantor, and also because the equities between the parties to it are not cut off by transfer to a bona fide purchaser for value before maturity.
(Learned, P. J., dissents.)
Appeal from a judgment in favor of the plaintiff upon a verdict of the jury at the Ulster county circuit, and from an order denying a motion for a new trial.
The action was upon a promissory note as follows.:
‘ “ Quarryville, September 2, 1871.
“ Thirty days after date I promise to pay to Cornelius W. Carnwright fifteen hundred dollars, with interest.
“Samuel P. Freligh.”
The defense was a denial that the testator made the note, and alleging no consideration..
Peter Oantine, for app’lts; F. L. Westbrook, for resp’t

Opinion:
Landon, J.
The jury decided the signature to be genuine upon testimony which, no doubt, admitted of a decision either way. This issue was sharply litigated. In the absence of any erroneous ruling we ought not to set aside the verdict upon this; issue.
The plaintiff in the first instance rested his case without showing any consideration other than that which the note and his possession and production of it imported. The trial court refused to non-suit the plaintiff, and held that if the note was"genuine there was a presumption of consideration sufficient to authorize a recovery, and that the burden rested upon the defendants to overthrow it; that the absence -of words of negotiability, or expressing a consideration, did not change the rule. The defendants excepted.
Testimony was then given by the defendants tending to show that it was improbable that the plaintiff had any money to loan or that the testator would have borrowed it; that the parties were unfriendly to each other. The plaintiff then adduced some testimony tending to impair this position of the defendants. The plaintiff did not attempt to show what the actual consideration was.
The court charged the jury that the note, if genuine, imported .a consideration, and that the burden rested upon the defendants to show that it was without consideration.
Undoubtedly the rule is, that the plaintiff by producing the note and proving the signature makes out a prima fade case of consideration, and if nothing more is offered is entitled to recover; but if this prima facie case is assailed by evidence tending to disprove it, the burden of establishing the consideration upon the whole case rests with the plaintiff. Perley v. Perley, 144 Mass., 104. When the transaction which resulted in giving the note is disclosed by the evidence, it is plain that the question of consideration should be determined upon the actual facts, instead of "upon the presumption which the note affords. Bruyn v. Russell, 52 Hun, 17; 22 N. Y. State Rep., 374. But in the present case the evidence does not disclose the transaction which resulted in giving the note. Its tendency, so far as it has any, is to show that it is improbable that the parties should have had such dealings with each other as to result in this note, or any other like it. This evidence goes to the genuineness of the note, not to its consideration. But the jury have found the note to be genuine. There is nothing in the testimony, assuming the note to be genuine, that would sustain a verdict that there was no consideration. The evidence tends to show that the testator would not have given the plaintiff a note except upon consideration. The appeal thus depends upon the question whether this note on its face imports a consideration.
The note in question contains no words of negotiability. It is therefore not negotiable. McMullen v. Rafferty, 89 N. Y., 456; Cromwell v. Hewitt, 40 id, 491. Non-negotiable notes differ from negotiable ones in the particular that the endorser is regarded as a maker or guarantor and not as a simple endorser. Same cases. Also in the further particular that the equities between the parties are not cut off by transfer to a bona fide purchaser for value before maturity. Maule v. Crawford, 14 Hun, 193; Lee v. Swift, 1 Den., 565; Barrick v. Austin, 21 Barb., 241.
But they are regarded as promissory notes under the statute of 3 and 4 Anne, chap. 9, 1704, enacted in this state in 1801, 1 R. L., 151, and in the Revised Statutes, vol. 1, m. p., 768, § 1,4, as follows: "
" Section 1. All notes in writing, made and signed by any person, whereby he shall promise to pay to any other person, or his order, or to the order of any other person, or unto the bearer, any sum of money therein mentioned, shall be due and payable as therein expressed; and shall have the same effect, and be negotiable in like manner as inland bills of exchange, according to the custom of merchants.
" § 4. The payees and endorsees of every such note payable to them or their order, and the holders of every such note payable to bearer, may maintain actions for the sums of money therein mentioned, against the makers and endorsers of the same respectively, in like manner as in cases of inland bills of exchange, and not otherwise."
Before the statute of Anne, inland bills of exchange and promissory notes payable to the order of the payee were by the custom of merchants negotiable. • "With respect to inland bills of exchange it was held that the endorsee could recover of the maker or acceptor as the case might require, and that the custom of merchants had become the common law. It was held the same way in several cases with respect to promissory notes, but in Clerke v. Martin, 2 Ld. Ray, 757; 1 Salk., 129, Lord Holt, C. J., held that the merchants could not change the law ; and in Potter v. Pearson, 2 Ld. Ray, 759; 1 Salk., 129, Lord Holt held that "this custom to oblige one to pay by note without consideration is void and against law."
The statute of Anne was enacted to reverse the ruling of Lord Holt and to place promissory notes upon the same footing as inland bills of exchange with respect to their negotiability and effect. The endorsee or transferee can recover upon them. See Dunlop v. Silver, 1 Cranch, App'x, 367, for a full exposition of the law and cases leading to the statute of Anne. The sections of our revised statutes, above quoted, are a substantial re-enactment of the statute of Anne. Both statutes by their terms refer to negotiable notes. They shall " be clue and payable as therein expressed." Nothing is said in the statute about consideration and hence the notes need recite none. The English courts, however, regarding the statute as remedial, extended the benefit of it beyond its literal terms, and held that non-negotiable notes came within it, and that the payee could maintain an action within the statute against the maker. Kyd on Exchange, 55, published in 1790; Smith v. Kendall, 6 Term Rep., 123; 1 Esp. N. P. C., at 231; Burchell v. Slocock, 2 Ld. Ray., 1545. That is to say, the payee could declare upon the note under the statute, instead of declaring upon the consideration or transaction which led to the giving of the note. H the non-negotiable note was within the statute, it imported a consideration without reciting it.
Such being the rule in England, it seems to have been assumed to be the rule in this state.
In Downing v. Backenstoes, 3 Caines, 137, the note was nonnegotiable, and was declared upon as within the statute. The defendant demurred upon the ground that the note was not within the statute, and therefore the declaration was bad because it did not allege the transaction and consideration upon which the note was given. The report states that counsel for defendant confessed that if the case were to be determined on the English decisions, it would be against him, but if it were res integra in this court he' had much to say.
The court said: "The very point was settled in Green v. Long, April term, 1798, in conformity to the adjudications in Westminster Hall. Judgment for plaintiff."
We understand that the rule thus announced has ever since been followed in this state without question. The President, etc., v. Hurtin, 9 Johns., 217; Kimball v. Huntington, 10 Wend., 675; Paine v. Noelke, 53 How. Pr., 273 ; 3 Kent Com., 77.
The same rule prevails in Massachusetts. Townsend v. Derby, 3 Metc., 363; Dean v. Carruth, 108 Mass., 242. The statute of Anne, though not enacted in 'that state, seems to be regarded as declaratory of the common law. Richards v. Barlow, 140 Mass., 218.
No definition of a promissory note requires the use of the words " value received." It is an unconditional promise in writing to pay a specified sum of money to another at some time certain to arrive. Buller on Trials, 272, edition of 1788; 2 Black. Com., 467; 3 Kent, 75 ; Kyd on Exchange, 18.
This definition in substance is in all elementary books. Negotiability is not an essential quality of a promissory note. Sibley v. Phelps, 6 Cush., 172. Of course if both negotiable and nonnegotiable notes are within the statute, neither needs the words " value received."
Very possibly different rules prevail in different states. As was said by counsel in Downing v. Backenstoes, supra, if the question were res integra in this court much could be said; but it seems to have been so early and positively settled that very little can be found in our reports upon the subject.
Judgment affirmed, with costs.
Mayham, J.
Section one of title two of chapter four, part two of the Revised Statutes (vol. 3, p. 2241 of 7th edition of Banks' R. S.), which is a transcript of 1 R. L. 151, passed in 1801, and which in substance re-enacts chapter 9 of 3 and 4 Anne, passed in 1704, seems broad enough to embrace both non-negotiable and negotiable promissory notes, and as that part of the section relating to non-negotiable notes is connected to the part of the same section relating to negotiable notes disjunctively, either non-negotiable or negotiable notes are promissory notes within that section; and if we read the section leaving out all that part which relates to negotiable notes or those payable to order, we will have an instrument, containing all the elements of a non-negotiable promissory note. The section would then read: " All notes in writing made and signed by any person, whereby he shall promise to pay to any other person any sum of money therein mentioned, shall be due and payable as therein expressed." By section four of the same title, if we read the same as it relates to the maker and payee only, we will have this provision: " The payee may maintain an action for the sum of money therein mentioned against the maker." Tested by this reading of the statute we would find in the note in suit all the statutory elements of a promissory note; and it will be observed that as the provisions of the first section are connected by the disjunctive " or" no misinterpretation of the whole section is effected by reading the same in the manner above indicated. If then this is a promissory note, neither words of negotiability or expression of a consideration upon its face are necessary as between the maker and payee to authorize a recovery. It is an unconditional promise in writing to pay a specific sum of money to another at a time certain to arrive, which completely answers the definition of a promissory note.
In Paine v. Noelke, 53 How., 273, it was held that a note not negotiable imported a consideration though none was expressed, and might be sued on without alleging or proving a consideration.
I think the trial judge committed no error in his charge or on the motion for nonsuit in holding that this note imported a consideration, although none was expressed upon its face, and it was non-negotiable, and that the judgment should be affirmed.