Case Name: Henry Grew, Executor, versus Henry Burditt
Court: Massachusetts Supreme Judicial Court
Jurisdiction: Massachusetts
Decision Date: 1830-03
Citations: 9 Pick. 265
Docket Number: 
Parties: Henry Grew, Executor, versus Henry Burditt.
Judges: 
Reporter: Massachusetts Reports
Volume: 26
Pages: 269–275

Head Matter:
Henry Grew, Executor, versus Henry Burditt.
jo an action against the maker of a note indorsed, before it fell due, by the payee to the plaintiff, the defendant may show that the payee’s name was given merely as security, and that this was known at the time to the plaintiff, and so be let in to all the equities subsisting between himself and the plaintiff as immediate parties to toe note.
One of two partners having died, the survivor continued to sell the stock, and in order to close the partnership concerns he purchased of the executor of the deceased partner, at a fair valuation, the stock remaining unsold, and gave the executor three promissory notes for the amount. Some time after giving these notes the surviving partner balanced the partnership books, and for the balance against him he made other notes to the. executor. All the notes were paid except one of the three given for the stock, and the executor, in settling his account in the probate court, charged himself with the amount of that note. In an action brought by the executor against the surviving partner, on a note given in renewal of that note, it was held, that there was no want of consideration for the original note, although from errors in the partnership accounts the defendant had now paid the executor more than was due to tfe* estate of the deceased partner.
Also, that the substituted note stood on the same footing, in this respect, as the original note.
Also, that the description of the plaintiff as executor, in the writ, was surplusage.
Also, that the defendant could not set off, against the note, any claim arising from errors in the accounts,!, because he had hot filed his demand in set-off; 2. because the demands were not between the same persons in the same right; and 3. because more than four years had elapsed since the plaintiff gave bond for the performance of his trust as executor, before the defendant made his claim.
Assumpsit on a promissory note, dated January 23d, 1824, for $2233,33, payable to James White or order in one year, with interest semiannually, and by White indorsed to the plaintiff. Trial before Wilde J.
The interest on the note had been paid by the defendant as it became due, the last payment being in January 1827.
The defendant offered, in defence, to go into evidence of certain copartnership transactions between- himself and the plaintiff’s testator in 1818 and subsequent years, by which it might appear that there had been such errors arising out of the mode of keeping the books of the firm, the over-valuation of the stock, and the manner in which the books were closed, that upon the correct statement of the accounts at the present time, it would appear that the defendant had already overpaid the plaint'ff by the full amount due on the note, or that the note was originally given without consideration.
This evidence was objected to by the plaintiff, because he was fide holder of the note, indorsed to him before it was due, and because the note itself was given for a consideration (namely, a sale of goods) wholly independent of and disconnected with the copartnership relation, and also because no account had been filed in the case by way of set-off.
On the other hand, the defendant offered to show that the note was given by the defendant to the plaintiff, and that White indorsed it for the purpose of security only ; and he contended that the evidence, if admitted, would show that the note arose out of part of an item carried to the credit of the merchandise account in the copartnership books, and to the debit of note receivable, and to the defendant’s account with the firm in those books, and was entered and mingled with other items of charge and credit, as other copartnership transac tions were, and that if the accounts were corrected, it would appear that no part .of the note in question was due to the plaintiff in his capacity of executor, at the time when it was given.
The judge admitted the evidence, reserving the question for the consideration of the whole Court.
The defendant thereupon introduced evidence tending to show that there had been a great accumulation of old stock and unfashionable goods, during the copartnership dealing, and from time to time a depreciation in value of the stock, and a great loss on it from the prices at which it was estimated in the stock accounts of each year taken each year, and according to his view a great over-valuation of the stock ; that the goods on hand at the testator’s decease were then appraised at their full value, which was fifty per cent, below the price at which they were put down in the books ; and that the stock was originally greatly over-valued.
The plaintiff then put into the case a contract, dated December 5th, 1821, between himself and the defendant, and a letter, dated July 12th, 1822, from the defendant, in which, after complaining of the hardship of his case and the loss he was like to sustain, by his connexion with the plaintiff’s testator, he says, that “ the business will fall short 6000 or 7000 dollars, and that he desires to meet his proportion of the loss as soon as may be;” and be proposes to the plaintiff, <£ rather than the business shall remain to another year, to take the remaining stock at fifteen per cent, discount from the appraisement in the bate court.” One of the appraisers testified that the stock was appraised at what it would probably sell for, and about fifty per cent, less than cost and charges. The plaintiff also put into the case the original bill of sale of the stock to the defendant, dated September 25th, 1822, the amount of which, after deducting the fifteen per cent., was $ 6700, for which three promissory notes were given, each for $ 2233-33. Two of these notes were paid at maturity ; the other, which became due in January 1824, was taken up by the defendant, and the one now in suit was given in lieu of it. On January 23d, 1824, the plaintiff charged himself in the probate court with this note as so much money invested for the estate of the testator. It did not appear that until 1827, any claim was made on the estate by the defendant, for any reduction or allowance for loss on the stock. The copartnership was entered into in January 1818, and continued until the death of the testator in September 1821. On December 31st, 1823, the defendant, in his own handwriting, balanced the books, by charging himself with his proportion, viz. $ 2383, being one third of the whole loss, and the testator’s estate with $4766 ; which charges would be an accurate apportionment, provided the defendant was bound by the several stock accounts as previously taken and stated in the books, and provided there were no mistakes to be corrected.
The jury were instructed, that the valuation of the stock, taken in January 1818, and recognized by the articles of co-partnership, was binding and conclusive on the defendant, unless there had been some fraud on the part of the testator, (of which there was no evidence,) but that the valuations taken in 1819, 1820 and 1821, stood on a different footing ; for, as by the articles of copartnership, annual accounts of stock were to be taken, a deduction ought to have been made for the depreelation of the valuation of the old stock, if there was any depreciation, and if, through mistake, this was not done, the defendant was entitled to have the error rectified ; and if upon examination of the accounts and the consideration of the whole evidence in the case, the jury should find that no part of the amount of the note in dispute was due to the plaintiff at the time when it was given, they might find a verdict for the defendant. In regard to the defendant’s not objecting to the supposed over-valuations of the stock, and his closing of the books and charging himself with his proportion of the final loss, the jury were instructed, that although these transactions were strong evidence of his acquiescence in the justice and correctness of these valuations and accounts, yet they wrere not conclusive upon him ; and that if the jury should be of opinion that there were errors arising from the misapprehensions of the defendant, these errors might be rectified, although no fraud was practised by the testator.
The jury returned a verdict for the defendant.
The plaintiff moved to have the verdict set aside and a default entered, because the evidence introduced by the defendant was inadmissible, under the circumstances of this case ; or if admissible, was in law no defence to the action.
But if the evidence was admissible, the plaintiff moved for a new trial, on the ground that the instructions of the judge, in . matters of law, were erroneous.
If the evidence was inadmissible, the defendant was to be defaulted ; if the instructions were wrong, a new trial was to be granted.
Hubbard and Cooke, for the plaintiff.
The evidence produced by the defendant was inadmissible, the note being indorsed before it became due, for a valuable consideration, and the plaintiff being ignorant of the state of the accounts between the partners. Wilkinson v. Nicklin, 2 Dallas, 396. The contract was made with the plaintiff personally, and as he might sue in his own name, describing himself as executor is surplusage. Talmage v. Chapel, 16 Mass. R. 71 ; Mowry v. Adams, 14 Mass. R. 329; Clark v. Lowe, 15 Mass. R. 476.
The evidence was inadmissible, inasmuch as the object of it was to alter and control the terms of the written contract, and in fact to substitute a new contract, in which White is a surety and not an indorser. Dow v. Tuttle, 4 Mass. R. 414 ; Hunt v. Adams, 6 Mass. R. 519; Stackpole v. Arnold, 11 Mass. R.27; Burrill v. Smith, 7 Pick. 291 ; Webster v. Lee, 5 Mass. R. 334 ; Barry v. Morse, 3 N. Hamp. R. 132.
The note in suit was given for goods sold, and was independent of the partnership accounts. Assignees of Simonton v. Boucher, 2 Wash. C. C. R. 473.
The notes which, if any, should have been contested by the defendant as invalid for want of a consideration, were those given by him for the apparent balance of the partnership accounts ; but he has made an appropriation of his money to the payment of those notes, which is binding upon him. United States v. Kirkpatrick, 9 Wheat. 720 ; United States v. January, 7 Cranch, 572 ; Field v. Holland, 6 Cranch, 8 ; Preston v. Strutton, 1 Anstr. 50.
The evidence was inadmissible, because no set-off was filed. And a set-off could not have been filed, because the demands between the parties are not in the same right. Wolfersberger v. Bucher, 10 Serg. & Rawle, 10 ; Dale v. Cooke, 4 Johns. Ch. R. 11 ; Colby v. Colby, 2 N. Hamp. R. 420 ; Woodman v. Barker, ibid. 479 ; Hallowell &c. Bank v. Howard, 13 Mass. R. 235 ; Goodwin v. Cunningham, 12 Mass. R. 193 ; Jenkins v. Brewster, 14 Mass. R. 291 ; Clark v. Leach, 10 Mass. R. 51 ; Braynard v. Fisher, 6 Pick. 355 ; Sargent v. Southgate, 5 Pick. 312. A set-off was barred by the statute of limitations. 1 N Hamp. R. 385 ; Angelí on Limitations, 176.
Rand and Morse, contra,
insisted that the evidence was properly admitted ; and that the facts proved, showed that the note was without consideration. The partnership dealings and accounts did not stop with the death of the testator, but were carried on down to the time when the settlement was made with the executor. The account finally made up embraced the profit and loss account on the whole concern, and every charge of debt and credit to the time of the settlement; and if more than was due on the account has been paid, there is a failure of the consideration of this note. The note is claimed by the plaintiff as executor ; it is assets in his hands ; and a demand against the testator may rightfully be set off against it.
If the executor has in his own wrong charged himself in the probate court with the amount of the note, that cannot affect the defendant. Besides, the executor may charge it back, as in t^e case °*" a ^ad debt.
The statute of limitations does not come into question. And if it did, the Court would not suffer the executor to lie by till the defendant’s right of set-off was barred, and then bring his action for the whole of his demand. But where the defendant sets up a payment or a failure of consideration, the statute of limitations does not apply.

Opinion:
Per Curiam.
The evidence offered by the defendant was objected to, because as the plaintiff sues as indorsee of a note indorsed to him before it became due, it is improper to allow transactions between the defendant and other persons to affect the validity of the note or operate by way of set-off. It is said the evidence would vary and control the written contract, and prove it to have been made by two instead of three parties The defendant offered to show that the note was made in the form in which it appears, solely to obtain White's name as security. The general rule, that parol evidence is not admissible to vary a written contract, is not denied, but it may be considered that there are some qualifications or exceptions to this rule. It is clear that the promisor of a note may show as against the promisee, that the note was illegal or without consideration. The plaintiff however contends, that being an indorsee, he is protected against such a defence. But it is competent to the maker of a note to show that it was indorsed when overdue, and so he will be let into the same defence. And in the case at bar, the defendant may show the nature of the transaction, and that there was no consideration for the in.dorsement. If there was a failure of consideration, it was between these parties ; and if there was a payment or set-off, it was between them. The plaintiff therefore cannot protect himself against the admission of the evidence, on the ground of his being indorsee, and the evidence shows clearly that the object of the indorsement was merely to obtain the name of White.
The question then is, whether the defendant can avail himself of the facts which he proved. Was there a failure or want of consideration ? And- in determining this, we must consider the fact as established by the verdict, that there was a mistake sufficient to balance the note. What was the consideration ? It appears there was a partnership between Grew the testator and the defendant, from 1818 to September 1821, when the testator died. The defendant continued to carry on the business until the partnership concerns were brought to a close. When the original note was given, it was not upon a settlement of the partnership accounts; they remained open, and to bring them to a close it was necessary to make a sale of the partnership stock. The defendant purchased it and gave for it three notes. It is not denied that the property was equal in value to the notes, and there is therefore no failure of consideration in regard to them. The note in suit, being given in renewal of one of the three, stands on the same ground as the original note.
Was this note paid ? After the goods were sold to the defendant, he settled the partnership accounts, and he continued to pay interest on this note until a very recent period. It appears that nothing was done, showing that the parties considered the note as paid. If it had been paid, it would have been given up, or the payment would have been indorsed upon it.
The only remaining inquiry is, whether the defendant has a claim for a set-off; and we think he has not. In the first place, it would be necessary that his account should have been filed in set-off; and in the next place, his claim is against the plaintiff in his representative capacity ; and though the plaintiff describes himself as executor, yet it is more reasonable to consider that he sued in his individual capacity, and that styling himself executor is merely a descriptio persona. If there was any mistake in the valuation of the property, it took place in the lifetime of the testator, and the remedy was against the plaintiff in his representative capacity. The defendant's demand against the testator is barred by the statute of limitations, which the executor could not waive ; and ifo the account had been filed in set-off, the same objection would lie against it.
Verdict set aside and defendant defaulted.
See Landos v. Robertson, 3 Miller, 259
See Peabody v. Peters, 5 Pick. (2d ed.) 4, note 1, and cases cited; Chander v. Drew, 6 N. Hamp. R. 469, Braynard v. Fisher, 6 Pick. 355; Shirley . Todd 9 Greenleaf, 83; Savage v. Davis, 7 Wendell, 223.