Case Name: J A. Devore v. L. H. Mundy
Court: South Carolina Court of Appeals
Jurisdiction: South Carolina
Decision Date: 1849-11
Citations: 4 Strob. 15
Docket Number: 
Parties: J A. Devore v. L. H. Mundy.
Judges: 
Reporter: South Carolina Law Reports
Volume: 35
Pages: 15–20

Head Matter:
J A. Devore v. L. H. Mundy.
M. to whom or bearer B’s. note was payable, being about to negotiate it to J. in order to induce him to take it, wrote his name as maker, — held that it was a good note to bearer, and that M. was liable to pay it.
A contract with an intermediate holder of a note, to give time to the principal, does not discharge the surety, as against another bona,fide holder.
Before Evans, J. at Edgefield, Spring Term, 1849.
This was an action of assumpsit by the plaintiff as bearer, against the defendant as maker of a promissory note. On the 3rd January, 1844, one W. B. Brannon gave the note, whereby he promised, one day after date, to pay to L. H. Mundy (the defendant) or bearer, the sum of $589 52-100. Some few days after the 10th January, when the note was overdue, the defendant transferred the no.te to one John W. Mundy, in payment of a debt, who declined to ta'ke it on the defendant’s endorsement, but required him to sign it as a maker. The note, then, on its face, purported to be the several note of Brannon and L. H. Mundy, payable to L. H. Mundy or bearer. A few days after the note was thus signed, it came into the hands of John W. Mundy — he passed it to one Elbert Mundy, by whom it was afterwards returned to John W. Mundy, who passed it.to the plaintiff. At the same time that the defendant transferred this note to J. W. Mundy, he transferred (under like circumstances) another note of Brannon’s for a larger amount. Shortly afterwards, but after he had let Elbert Mundy have this note, John W. Mundy called on Brannon for a settlement. He did not have this note, but his belief was that he requested a settlement of both notes. Brannon could not pay, but promised to make some arrangement by the next sale day.
On the 24th February, the attorney of John W. Mundy addressed a letter to the defendant, notifying him that the notes which he had recently transferred to John W. Mundy, were unpaid, and that suit had been brought on one of them. The transfer of the note by J. W. Mundy to Elbert, was a loan to enable him to perfect some purchase, which failing, the note was returned. There were many counts in the declaration, charging the defendant as maker, as endorser, as guarantor, and as drawer of a bill of exchange. A motion was made for a non-suit, which his Honor refused, holding that the defendant might be charged as the maker of a note payable to bearer.
His Honor said he did not consider either the case of Tu-ten v. Ryan, or Garrett v. Butler, as authority to the contrary. The note was past due when signed by the defendant, but as he intended to be charged as maker, and to become the security of Brannon, he did not consider the ante-date as presenting any difficulty, where the proof was clear the party 'intended to be bound as security for the payment of the note. The defendant, then, proved by Brannon, that shortly after the note was transferred to Elbert Mundy, (sometime in February, 1844,) he was called on for payment by Elbert Mundy, that being unable to pay, he agreed to give Elbert Mundy three per cent, additional interest, amounting to about $20, for a year’s indulgence. For this he gave a note, and has since paid it. The other note was sued to March Term, 1844, and paid out of Brannon’s estate, sold by the sheriff. This note would also have been paid, if sued at the same time. It was not sued until long after, and in the meantime Brannon became insolvent, and was sold out by the sheriff.
His Honor charged the jury:
1st. That the defendant was liable as a drawer of the note.
2nd. That as security of Brannon, he was not discharged by the plaintiff’s forbearance .to sue the principal.
3rd. That the promise to forbear sueing for a year, in consideration of the payment of illegal interest, was a void contract, and did not operate as such a change of the original contract as would discharge the security.
4th. That as between these parties, the payment of usurious interest by Brannon to Elbert Mundy, an intermediate holder, did not taint the contract with usury so as to deprive the plaintiff of his interest and costs. It was a payment pro tanto by Brannon, and should be allowed as such. Under this charge the jury found a verdict for the plaintiff.
The defendant appealed, and renewed his motion for a non-suit, on the grounds taken on the trial, viz:
1. That the defendant was not liable as maker of the note sued on, because he signed it after it was due, and because it was payable to himself.
2. That he was not liable as endorser or as the drawer of a bill of exchange, seeing that there was no proof of a demand on W. B. Brannon, the maker, nor of notice of nonpayment.
3. That there was no evidence to charge him upon any of the other counts in the declaration.
The defendant moved also for a new trial, upon the grounds above stated, and upon the following additional grounds:
4. That EÍbert Mundy, the holder of the note, upon sufficient consideration, and by a binding contract, agreed to extend, and did extend, twelve months indulgence to Brannon, the maker of the note.
5. That the said Elbert Mundy, being the owner of the note, agreed to take, and did accept, usurious interest on the note from said Brannon.
6. That his Honor erred in charging the jury that the facts stated in the last two grounds, could not, by law, operate discharge the defendant.
7. That his Honor erred in charging the jury that the fact of Elbert Mundy’s receiving usurious interest upon the note, did not make the note usurious, so as to preclude the plaintiff from recovering more than the principal sum loaned without interest or costs.
8. That the verdict was contrary to law and the evidence.
Pope, for the motion,
said the contract was not void on account of the usurious interest for indulgence. The party plaintiff, the lender, cannot come in and destroy the contract, on the ground that he has taken usury — it is for the borrower to do this. The extension of time to the principal, discharges the surety; and it makes no difference whether the contract to indulge, be one binding in law or in equity— Treasurers v. Johnson, 4 McC. 458; Maxwell v. Conner, 1 Hill Ch. 16; Rathbone v. Warren, 10 John. 595 ; Greely v. Dow, 2 Met. 178. All that is requisite to make the instrument a note, must appear on its face. That under consideration, is payable to the maker himself, or bearer, when it is requisite that it should be from one person to another.— No extrinsic fact can alter the face of the paper — 2 Stat. 544: 1 N. York revised Stat. 757 ; Act of 1827 ; Minet v. Gibson, 1 H. Blk. 606, is not a case binding on our Courts — nor does it govern this case. — here the note, is past due — there it was not yet due. The cases of Bennett v. Parnell, 1 Camp. 130, Hunter v. Jeffrey, in Peake’s Ad. Cases, 146, show that the decision in H. Blit. was reluctantly acquiesced in. This is not a promissory note — it is a note payable to the maker himself — Tulen v. Ryan, 1 Spears, 240: Garrett v. Butler, 2 Strob. 193.
Wardlaw, contra.
— In support of the 1st ground, cited Devega v. Moore, 3 McC. 482. Why not consider the name of the payee in this case, or that of a fictitious person’s, as bearer at large 1 The instrument is drawn to himself or bearer. If it had been drawn only to himself, of course he could not have sued himself; that would have been an absurdity— Cockrell v. Milling, 3 Strob. 283 ; Stoney v. Beaubien, 2 McMul. 319. 2d. ground. — He could have been charged as endorser, although his name was signed on the face of the note — Chadwick v. Jeffers, 1 Rich. 397; Gray v. Bell, 2 Rich. 72; Towles v. Williams, 2 Rich. 562. There was no proof of an usurious contract, and Leech v. Kennedy, 3 Strob. 489, shows the witness, whom they claim as proving it, to be incompetent. The party who receives the usurious interest, cannot afterwards impeach the contract — if it be an executed contract, when the agreement is only executory, either party may avoid it — Anderson v. Mannon, 7 B. Munro, 218; Tudor v. Goodloe, 1 B. Munro, 322 and 325; Nixon t v. English, 3 McC. 559 ; (2 Johns. Ch. Cases, 443 and 479, show the equities of the parties ;) Lee v. Ware, 1 Hill, 313; 1 Esp. 274; Parr v. Ellison, 1 East, 91.
Carroll, same side, said there was no statute which avoids a note, because it is made payable to the maker — “ or bearer” is surely sufficient to support such a note — nor was there any objection to treating him as an indorser who has waived the notice of demand and refusal to pay — Gailard v. Leseigneur, 1 McMul. 225 ; Grant v. Yaughan, 3 Bur. 1516 ; Broom’s L. Max. 341. The money could have been recovered back— Harper v. Chandler & Neel, 1 Strob. 466.

Opinion:
Curia, per O'Neall, J.
In this case two questions will alone be considered, one arising out of the motion for a non-suit, and the other out of the motion for a new trial. The first is, whether the defendant is liable as maker of the note 1
That he is, can I think be easily, and in a few words, clearly shown ! On the note before us, the defendant promised to pay himself or bearer, the sum mentioned. If this were all, the plaintiff could not recover. For the promise would be, then, to himself alone, and would fall within Glenn and Sims ; but this was not the original form of the note. The promise to the defendant or bearer, was originally made by Brannon. When the defendant was about passing off the note to John W. Mundy, who refused to take it in any other way than by the defendant becoming a maker of it, he signed his name, and then, under such circumstances, it became a promise to pay the bearer. For there is no !. doubt, after Ives v. Pickett, Oats and Griffith, that he who signs a note, after other parties made it, becomes liable, as by a several undertaking. The rule in such cases as this, is to give effect, if possible, to the intention of the parties.— Here the intention is plain. Is there any obstacle to giving it effect ? None whatever ! The note is not, as between any of the parties, altered by parol. The note is a promise to L. H. Mundy or bearer. This is complied with by Bran-non's liability. The defendant's name appears at the foot of the note; this was put there after the note was perfect.— The apparent date of a paper is always examinable by pa-rol. It is thus ascertained that the defendant's promise is not part of the original contract — he does not undertake jointly and severally with Brannon, but he makes a several promise literally to himself or bearer. We know, however, from the facts, that he intended to bind himself to the bearer to whom he delivered the note, and to whomsoever it might afterwards be delivered. This being the ascertained intention, our business (if we legally can) is to give it effect: the note may very well be read under such circumstances, as if the name of L. H. Mundy, payee, were struck out, (his signature as maker may very well have that effect,) and would, then, stand as a naked promise on his part, to pay the bearer. This must be so, as is said in Stoney v. Beaubien, because, otherwise, no' legal effect would result from the defendant's signature as maker. In Freeman v. Clark, I stated my notion of the'matter, now in hand, by saying, "the proof shows that on negotiating it, a note payable to bearer, made by other persons to the plaintiff, he (Wells, the subscribed his name as one of the makers; that made a good several contract on his part." It is true, that point was not in issue in that case, ana hence, the remark, however proper on the facts in evidence, must rank as a mere obiter dictum there ; but here it is the point to be decided, and on examination, I am satisfied the law was, in this respect, stated correctly in Freeman v. Clarke. It is true in Tuten v. Ryan, where one of two partners, to whom or bearer the note was payable, wrote his name on its back, it was held he could not be charged as maker, but might be as a drawer of a bill of exchanae. This decision was, I have no doubt, right as to his liability as the drawer of a bill of exchange. But in no point of view does it stand in the way of this case. For there it was doubtful, on the proof, whether the defendant intended to make himself unconditionally liable; and according to the form of his contract, it would seem he did not; and hence, perhaps, the true course was to charge him as drawer of a new bill. Here, however, the proof and the form of the defendant's contract, show he intended to make' himself unconditionally liable.
The next question is, whether the defendant is discharged by the giving of time to Brannon, the principal, by Elbert Mundy, to whom the note was delivered for a special purpose. It may be assumed that the contract was a good and valid one between them. The note was restored by Elbert to John W. Mundy, and by him transferred to the present plaintiff. In this case, as in McAlpin v. Wingard and Muller, I have no hesitation in holding that this defence caunot be set up against a bona fide holder. It is true the note was past due, and therefore, all competent defences may be made. But this defence, at most, does not go to the entire destruction of the note, — it is only to affect one of the parties. It arose with an intermediate holder. I do not think it can be considered as such a defence as ought to be now set up against the note, in the hands of another holder. So, too, it is worthy of consideration on this point, that these parties, Brannon and Mundy, were several malrers of the same note. The defendant is the surety. But the contract of Elbert, to give time to Brannon, did not change the note, or so bind the defendant that he could not, at any time, have paid it, and had his action against Brannon. In such an event, Brannon might have had his remedy against Elbert, who had undertaken for more than he could perform. The cases of Wayne v. Kirby and Lands ads. Picket, make it clear, that a giving time which does not prevent the surety from paying the debt and 'pursuing his principal, does not operate as a discharge.
The motion for a non-suit or new trial, is dismissed.
The whole Court concurred.
Motion refused.