Case Name: James Mathews vs. J. Fogg
Court: South Carolina Court of Appeals
Jurisdiction: South Carolina
Decision Date: 1845-01
Citations: 1 Rich. 369
Docket Number: 
Parties: James Mathews vs. J. Fogg.
Judges: The whole court concurred.
Reporter: South Carolina Law Reports
Volume: 30
Pages: 369–374

Head Matter:
James Mathews vs. J. Fogg.
If the indorser, for valuable consideration, of a note over due, promises at the time of the transfer to pay what the indorsee fails to collect from the drawer, it is a waiver of his right to require proof of demand and notice.
Neglect to give notice to the first indorser, does not discharge a subsequent indorser who has had notice;
Under a count which contains the usual averments of demand on the maker, and notice to the indorser, is it sufficient to prove a state of facts which dispenses with actual den and and notice? Quare?
A note may be given in evidence under the common money counts, in an action by an indorsee against his immediate indorser,
Tried in the City Court of Charleston, July Term, 1844.
Assumpsit against the indorser of a promissory note for one hundred and fourteen dollars, drawn by Francis A. Huson, on the 11th February, 1839, payable to W. C. Allen or order sixty days after date. It was indorsed in blank by the payee and by the defendant, and on its back was a receipt for twenty-five dollars, signed by the plaintiff.
A witness, examined by commission for the plaintiff, p-oved the signatures of the maker and first indorser. He testified that he saw the defendant indorse the note to the plaintiff, in December, 1839, in East Florida, as collateral security in a trade for a mare, which defendant purchased from Lieutenant Sparkman, and which plaintiff paid for in May, 1840. That defendant said to plaintiff, that whatever he failed to collect from Huson, he, the defendant, would pay him on his return, which would be in three or four weeks.
The Recorder, in his report to the Court of Appeals, stated that he charged the jury as follows :
“ I remarked, that it is the settled rule in the courts in this State, that to charge the indorser of a note, indorsed after it became due, a demand must be made upon the maker, and notice of demand and non-payment given to the indorser, within a reasonable time, depending upon the va rious circumstances of the case ; and that it was equally well established, that the indorser may waive a demand and notice, and will be bound by a promise to pay the holder, made with a knowledge of the fact that they have been neglected. Allwood vs. Haseldon, 2 Bail. 457.
“ I also charged, that if the jury became satisfied, that in this case the defendant indorsed the note after it had fallen due, for valuable consideration paid by plaintiff, with an explicit promise made by the defendant at the transfer of the note, to pay the amount, it was, in the opinion of the court, a waiver of the defendant’s right to the demand, and notice of the dishonor. Ch. on Bills, 540; 4 Pick. 525, Boyd vs. Cleveland.
“ That with these views of the law, it was for the jury to determine whether the note was over due when it was indorsed by the defendant, and passed for valuable consideration to the plaintiff; this was to be collected from the testimony of the witness John Allen, which I then read over to the jury.
“ The next inquiry I presented to them was, did the defendant explicitly promise to pay the note, or so much as could not be obtained from the drawer,* within three or four weeks from the date of his indorsement, with the knowledge that the note had been dishonored by the maker and first indorser ? I referred again to the testimony of John Allen — that when the defendant passed the note to the plaintiff, the defendant said, “whatever plaintiff failed to collect from Huson, he, Fogg, would pay on his return from Black Creek, in three or four weeks and I thought, and so expressed myself, that the defendant being in possession of a note over due for eight months, he would be presumed to have known the condition of the note when he so transferred it.
“ I submitted it further to the jury, whether the language used by the defendant, was an express promise to pay the note, or a qualified promise. If qualified, was the condition that the plaintiff should call upon Huson for payment, in the interim of the four weeks ? If the jury so concluded, they were next to examine whether there was anything in the evidence from which the jury could presume such an application. I said that the only testimony that applied to this inquiry, was the receipt for $25 credited on the note. It appeared to me, in the absence of evidence to impeach the receipt, the jury were, from the testimony and inspection of the note, to decide whether the credit was written on the note bona fide or otherwise ; and also, if bona fide, whether the $25 had been collected from Huson, the maker of the note ; that it did not seem to me that the receipt was colorable, and in the absence of proof, the law would presume the contrary.
“ I then proceeded to notice an objection to the recovery, made by the defendant’s attorney; that the plaintiff was not entitled to a verdict, because the first indorser, W. C. Allen, was discharged by the laches of the plaintiff.
“ 1 considered this objection expressly overruled in Talk vs. The Bank, 1 M‘M. Eq. 414, where it was held that the holder of a negotiable note is not bound to give notice of the non-payment of the note by the maker, to the first in-dorser ; and a neglect to give notice to the first indorser does not discharge a subsequent indorser; who has regular notice.
“ I then took up the objection to the declaration. It was drawn in the common form of Indorsee vs. Indorser, with the money counts.
“I held the declaration as sufficient, under the rule that where a declaration by indorsee vs. indorser avers demand and notice in the usual form, it is sufficient to prove a state of facts which dispenses with actual demand, and shows due diligence. Williams vs. Mathews, 3 Cow. 252. Also, a note on the money- counts may in certain cases be evidence. Ch. on Bills, 594. A count for money lent, is proper in an action at the suit of the indorsee against his immediate indorser. Bayl. on Bills, 393, note 60.”
The jury found for the plaintiff eighty-one dollars and fifty-five cents, with interest thereon from.the 15th May, 1840.
The defendant appealed, and now moved for a new trial.
A. G. Magrath, for the motion.
Thompson, contra.
There js some conflict of authorities on the question, whether a hill or note is evidence, in all cases, under the common money counts ; and if evidence, whether it is conclusive or only prima fa-cie evidence. The English elementary writers consider that a bill or note is evidence under the money counts only as between the immediate parties ; Byles on Bills, 239 ; and even between those parties it is only prima facie evidence. Bayl. on Bills, 390, et seg. Ch. on Bills, 363, et seg. They speak of this doctrine, however, as a matter rather favored by the decisions of their courts, than definitively settled by them. On the other hand, the most respectable and well-considered American cases lay down the doctrine that a bill, note, or check, whether the action be by the payee, the indorsee, or the bearer, and whether it be against the drawer, the acceptor, or the in-dorser, is so far conclusive evidence under the money counts, that the action cannot be defeated merely by proving that the consideration was not in fact a pecuniary one. The case of Cole vs. Cushing, 8 Pick. 48, is a strong authority on this point. In that case it was held that -the indorsee of a note was entitled to recover against the maker, under a count for money had and received, although it was proved that the maker signed the note for the accommodation of the payee, and received neither money nor any other consideration for signing it. In Hughes vs. Wheeler, 8 Cow. 77, it was held that a note was evidence under the money counts; and evidence that the note was not given for a pecuniary consideration, but for land, was held to be inadmissible. See also Olcott vs. Rathbone, 6 Wend. 490, and Minot’s Dig. 104, where the Massachusetts authorities are collected. The case of Pierce vs. Crafts, 12 J. R. 90, proves that the bearer of a note may recover against the maker, on the money counts, without declaring specially. The holder may recover on the money counts against the acceptor of a bill ; 1 Mason, 306. In Williams vs. Allen, 7 Cow 317, it was held that an action on the money counts could be sustained against one of two joint makers of a note, and that the non-joinder could only be taken advantage of by a plea in abatement.
There are a number of other authorities on this subject, but these, it is apprehended, abundantly prove, that whatever the English rule may be, (and what it is, does not appear to be settled,) 'in many of the States of this Union the doctrine is, that in an action on a bill or note, when a consideration other than money is not expressed on its face, the plaintiff is not under the necessity of declaring specially, but may rely on the money counts ; and although the defendant may in some cases prove the true consideration, for the purpose of defeating the action, on the ground of failure of consideration, il legality, or the like, yet he cannot prove a good consideration, other than a pecuniary one, for the purpose of defeating the action on that ground alone.
It should not be forgotten, however, that although a plaintiff may take a verdict on a note or bill under the money counts, yet, that under those counts, he cannot have his case referred to the clerk, to assess the damages; the rule being in England, and doubtless it is the same in this State, that a case cannot be referred to the clerk, unless it appears on the face of the declaration, that the demand’ is liquidated. Osborne vs. Noad, 8 T. R. 648 ; 2 Arch. Pr. 20.

Opinion:
Curia-, per
Evans, J.
This court concur in the legal principles laid down by the Recorder in the charge to the jury, and are entirely satisfied with the verdict. If there be any error, it is in his decision on the variance between the allegations in the declaration of demand and notice and the proof. The declaration contains the usual aver-ments of demand on the maker, and notice to the indorser ; and the recorder decided that it was sufficient to prove a state of facts which dispenses with actual demand and notice. It is a general rule, that every material av.erment must be proved, and where the plaintiff's right of action depends on his doing some act. he must in general set out the excuse for non-performance. A general averment of performance will not suffice. I suppose it is now well established, that if the indorser, with a knowledge that no demand has been made, nevertheless promises to pay, he will be bound by it. His liability to pay is conditional, and it is perfectly competent for him to waive the condition, and this waiver, it would seem to me, might well be considered as superceding the necessity of proving the demand and notice as laid in the declaration. Upon this subject we are not all agreed, and therefore no definite opinion can be expressed. But we are all of opinion the plaintiff is entitled to retain his verdict. It seems from the evidence that Mathews had become liable to pay, and did subsequently pay to Sparkman, the price of a mare which Fogg had purchased from him. This note, then, eight months over due, was given by Fogg to the plaintiff as collateral security for the money he was bound to pay, and did pay to Sparkman; at the same time promising to pay whatHuson, the drawer, did not, on his return, which would be in three or four weeks. It would seem Huson paid only twenty-five dollars, and this action is for the remainder. The declaration contains a count on the note as indorsee against indorser, with money counts, and there can be no doubt the action would lie for money paid for the use of the defendant, and at his request, to Sparkman. In this view of the case, the note would be evidence of the amount paid by the plaintiff, over and above the amount he received from Huson.
The motion is dismissed.
The whole court concurred.