Case Name: Herrick against J. V. Carman
Court: New York Supreme Court of Judicature
Jurisdiction: New York
Decision Date: 1815-01
Citations: 12 Johns. 159
Docket Number: 
Parties: Herrick against J. V. Carman.
Judges: 
Reporter: Johnson's Reports
Volume: 12
Pages: 159–162

Head Matter:
Herrick against J. V. Carman.
it, for value vereTto c. ¿ R°,tepayaMe to ed’by H^in rUy'^MC6a'r ta°lJag^0isg0c1| the note to B„ for a less sum, who took it at and ° wit™ 6 thelnanner of enío™n*nthe ^ by B., as en-h., the endorscr, itwasheld, that as c, the cou’d^not766’ action, direct iy neither°rcouid B. recover against him. . Where a prior endorser cannot maintain an action against a subsequent endorser, no person deriving title under the prior endorser, with knowledge of all the facts, can recover against such subsequent endorser.
IN ERROR., from the court of common pleas of Dutchess county. Carman, as endorsee, brought an action, in the court below, against Herrick, as endorser of a promissory note, dated the 25th of February, 1811, made by John Ryan to Lawrence Carman Sr Co., or order, for 138 dollars and 38 cents, payable thirty days after date. A demand of payment of Ryan, on the 30th of March, 1811, and refusal, and notice ..* . tt - 7 J thereof to Herrick, was proved.
Ryan applied to Lawrence Carman Sr Co. for the purchase of goods, which they refused to sell to him, without security for the payment. Ryan, afterwards, presented them the note in question, endorsed by the defendant, which they accepted, and delivered the goods to the amount of the note. Ryan, soon after, became bankrupt, and Lawrence Carman Sr Co. were in- . formed, that, to render the defendant liable to them, as an endorser, it was necessary that they, the payees, should previously endorse the note. They, accordingly, endorsed the note, and sold it to the plaintiff for 100 dollars, to whom they, at the time, communicated all the circumstances attending the note, as to the consideration, making, and endorsing thereof; and the «defendant agreed to take the note at his own risk,
The. suit, was .brought solely for the benefit of the plaintiff who never made any demand on Lawrence Carman Sr Co,, not gav-e them any notice of the. non-payment by Ryan. . The jury, under the direction of the court below, found a. verdict for the plaintiff, for the amount of the noté, with interest. The opinion of the court below was excepted to, and a bill of exceptions tendered und sighed, oil which" the writ'of error was brought to this court. , ' \ .
P. Ruggles, for the plaintiff in error,
contended, that .the plaintiff below, being informed of all the circumstances, as-to the making and endorsement of the note, must stand precisely on the same ground■ as Lawtenée; Carman & Co,, the payees, would-have stood1, if the suit had been brought in their names ;, and he insisted that they could not recover on the note,- in .a suit brought by them.- '
J. Tallmadge, contra,
insisted, that where an endorsee, of a negotiable.note, takes it, bond fide,, for ¿full.consideration, his kubxvledge'that the-original party paid no consideration for it, cannot affect his right, to recover. The doctrine contended for by the other side -.w-o.uld put an end to al| accommodation notes," as they are called. - . '
Where a person endorses a blank note-, it Will bind him. for any sum and time which-the endorsee' chooses-tp .insert in it. It' operates asra' letter of credit,, for an indefinite sum,
Herrick v. Carman, 10 Johns. Rep. 224. White v. Kibby, 11 Johns. Rep. 128. 4 Term Rep. 470. Beck v. Robley, 1 Hen. Bl. 89. note.
Russel v. Langstaff, Doug. 514.

Opinion:
Spencer, J.
delivered the -opinion , of. the court; The def féndant in error purchased the noté at a discount, and xvith full knoxvledge of all the facts in the case; his right, therefore, to recover, cannot . be superior or better than that Of L, Carman Sr Co¿, from xvhom lie derived xvhatexmr title lie had... It does not appear that the plaintiff in-error endorsed the note for the purpose of giving Ryan credit xvith L, Carman Sr Co., or that he xvas in' anyxvise informed of the use to xvhich Ryan meant to apply the note. In the absence of any-proof to the contrary, xve must intend that Herrick meant only to become the second endorser, xvith all the rights incident to that situation, The fact of bis endorsing first, in point of time, can have no influ ence> for he must have known, and we are to presume he acted on that knowledge, that though the first to endorse, his endorsement would be nugatory, unless preceded-by that of the payees of the note,
Since the case of Russell v. Langstaffe, (Doug. 514.) it is not to be doubted, that the endorsement of a blank note is a letter of credit for an indefinite sum; but the present is not that case. There can be no doubt, here, but that the note was filled up when it was endorsed by the plaintiff in error. Had it appeared that the plaintiff endorsed the note'for the purpose of giving Ryan credit with Lawrence Carman & Co., then I should have considered him liable to them, or any subsequent endorser, and the plaintiff's endorsement might have been converted into a guaranty to pay the note, if Ryan did not, according to the decision of the supreme judicial court in Massachusetts. (3 Mass. Rep. 274.) Under such a state of facts, there would be t),o objection to the right of the defendant in error to recover, as the endorser of Herrick. In Bishop v. Hayward, (4 Term Rep. 470.) Lord Kenyon impliedly admits that there may be Circumstances under which a prior endorser "may recover against a subsequent one.
We have already decided, that the payees of this note could not, directly or indirectly, recover on it, (10 Johns. Rep. 224.) .and that decision is supported by the case of Bishop v. Hayward.
' The defendant in error, having purchased this not.e at a discount, and with full knowledge of the facts, has virtually agreed not to resort to Lawrence Carman & Co. in any event; and yet, if he can sustain this suit, he will, in effect, violate the agreement under which he became the purchaser of the note; because, upon this evidence, Herrick, if obliged, to pay, would have his remedy over against Lawrence Carman & Co.
The defendant does not stand before the court with the title or character óf a fair, bona fide, endorsee of a note, in the usual course of trade ; but rather in the light of a speculator, attempting, under the specious character of an endorsee, to recover a sum of money, to which those from whom he derives his title had, with his full knowledge,, no right. It may be regarded as a general rule, that when an endorser cannot recover against a subsequent endorser,' no person acquiring a title under such prior endorser, and acquainted with all the facts, shall be allowed to recoven
Judgment reversed.