Case Name: Frierson & Hughes vs. Reeves
Court: Tennessee Supreme Court
Jurisdiction: Tennessee
Decision Date: 1846-12
Citations: 7 Hum. 359
Docket Number: 
Parties: Frierson & Hughes vs. Reeves.
Judges: 
Reporter: Tennessee Reports
Volume: 26
Pages: 359–366

Head Matter:
Frierson & Hughes vs. Reeves.
Debt will not lie by endorsee against his immediate endorser. s
Mitchell executed a note payable to Trice; Trice endorsed and delivered it to Reeves, and’Reeves endorsed and delivered it to Frierson & Hughes; and they instituted an action of debt in the Circuit Court of Maury county on the endorsement of Reeves against said Reeves. '
The defendant pleaded nil debet, set off and payment and issues on these pleas were submitted to a jury. The presiding judge, Dillahunty, charged the jury that an action of debt would not lie by an endoisee against his immediate endorser. The jury rendered a verdict against the plaintiff, and a motion for a new trial having been made and overruled, the plaintiffs appealed.
W. F. Cooper, for the plaintiff.
The -question in this case is whether an action of debt can be sustained by the holders of a promissory note against his immediate endorser.
“The action of debt is founded upon a privity of contract either express or implied, in which the certainty of the sum or duty appears, and the plaintiff is to recover the sum in nu-mero and not in damages. It lies whenever the demand is for a sum certain or capable of being reduced to a certainty. When there is privity between the parties, and the debtor undertakes not for another debt, but for his own, not to a stranger but to the creditor, an action of debt lies.” 2 Leigh’s N. P. 710; 1 Chit. PI. 123; Steph. PI. 14.
It would seem, therefore, that whenever there is privity of contract, and an understanding as between the debtor and creditor fo^ one’s own debt, and the demand is for a sum certain or capable of being reduced to a certainty, debt lies.
It appears to us that these essential requisites are all to be found in this case.
There can be no question at this day, that there is sufficient privity of contract to sustain debt, between all the parties to negotiable paper. Since the statute making promissory notes negotiable, the.legal operation and effect of the transferís, that the money due upon the note to the original payee is due from all parties responsible upon the paper to the assignee of such contract, and that a right of action is given to such assignee in his own name. It seems necessarily to follow, and so it has been held, that the holder may make use of the same form of action as the payee. Consequently as debt will lie by the payee of a note against the maker, so it may be sustained by the endorsee of the payee, or the endorsee of such endorser, against the maker. Now if the law creates this privity betwmen a remote endorsee and the maker of a note, how can it be contended that it does not create the same privity as between the same endorsee and all other parties to the note?
By the theory 'of negotiable paper, the endorser undertakes as between himself and the holder, for his own debt, and not for the debt of another. He is conditional surety, and liable to the holder as for his own debt, when the conditions are performed; in the same way that a surety upon the face of the paper is bound as for his own debt without condition. The indorsement is not a collateral but a conditional undertaking. Perform the conditions, and the debt becomes the debt of the endorser. See Story on Bills, Marshall vs. Christmas, 3 Humph. 616,618. The second requisite to sustain debt then exists.
The last requisite is that the recovery should be for a sum certain or capable of being reduced to a certainty. Modern decisions have almost entirely done away with the distinction between recovery in numero, and recovery in damages. The distinction is admitted to be purely technical, where the contract on which the action is founded is for the payment of money. 1 Ch. PI. 123. This Court has held that a party may recover in debt less than he claimed, that the action will lie whenever the sum may be made certain, and that whenever indebitatus assumpsit lies, debt will lie. Thompson vs. French, 10 Yerg. Outside of this, it must be evident that a verdict against an endorser of a promissory note must be as certain, and as surely in numero, as against the maker.
Every requisite to sustain debt between a holder and a re mote endorser, seems to exist, and upon principle there would appear to be no doubt of the propriety of the action in such case. The current of modern'authority is decidedly in favor of the action under the circumstances of the present suit. At least two courts of this Union have directly setted the question as contended for. The Courts of N. York in the case of On-andago Bank vs. Bates, 3 Hill, Rep. 63; and the Courts of Mass, in the case of Cole vs. Cushing, 8, Pick. Rep. 48. It has also been held in England that debt will lie at the suit of the payee against the drawer of a bill; and by first endorsee against first endorser, who was also drawer of a bill payable to his own order. Chitty on Bills 545. And if it lies between such parties there can be no reason why it may not lie by and between the other parties to negotiable paper. In truth, there would be no doubt upon the subject but for some dicta of the early English judges still retained by English text writers — though clearly irreconcileable with the subsequent direct decisions of the Courts of Westminster Hall — and some remarks of the judges of this Court thrown out incidentally in the consideration of other questions. Let us consider whether these are sufficient to interfere with our remedy in this case. .
The confusion among the English cases with respect to the action of debt by and between parties to negotiable paper cannot escape the most casual reader. This is altogether owing to the fact that some few decisions made in the very infancy of commercial law, and some dicta of learned judges thrown out while the principles governing negotiable contracts were not yet fully understood, are still retained by English text writers as binding precedents in the Courts of England. The rigid adherence to what has been decided, is not the least remarkable indicium of an English text writer. “They string together cases from which it is often difficult to extract any distinct, general principle, and which 'are determined to be anal-agous, or otherwise, by circumstances comparatively immaterial. Their whole system of logic, says an American writer, consists of a case in point. The most that can be said of them is par negotiis ñeque supra." 2 Legare, 111. They collect cases without attempting to lay down general principles. In no branch of the law are these remarks more applicable than the one now under consideration. It is laid down that debt will lie by the drawee against the acceptor, because so decided in 2 Dowl. 635; and that it will not lie by payee or any other than the drawer against the acceptor, because so said by Lord El-den incidentally in the case of Bishop vs. Young, 2 B. andP. It is laid down that debt will lie at the suit of the payee against the maker of a promissory note, because so directly decided, but it is stated in the same sentence that it will also lie by the payee against the drawer of a bill of exchange, and that it will not lie in favor of an endorsee against either drawer or maker, solely upon the dicta of Lord Eldon in Bishop vs. Young. It it held that debt will not lie in the name of the payee or endorsee against the acceptor — a decision questioned by Mr. Chitty on Bills p. 547, and expressly overruled by the Supreme Court of the U. S. in Itaberg vs. Peyton, 2 Wheaton 385; and Kirk-ham vs. Hamilton, 6 Pet. 24. Jt is also laid down by all the text writers of England, that debt cannot be sustained by an endorsee against the maker of a promissory note — a point directly overruled by the American authorities and by this Court. It will be noticed, too, that the English writers allow the action bypayee against the drawerofabill,butdenyitbyhold'eragainst the endorser; although, by the very theory of commercial paper, every endorsement is equivalent to the drawing of a bill upon the maker. Chitty on Bills, and 2 Humph. 95. Lastly, it is to be noted, that all the requisites to sustain debt, are admitted to exist between parties to negotiable paper, except privity of contract — Chitty on Bills 138, and 2 Leigh’s N. P. 710. — a point taken for granted by the American authorities as necessarily springing from the negotiability of the paper. The law as it exists in England upon this subject clearly needs further examination; and the tendency of the later cases is unquestionably to extend the benefits of the action of debt to all the parties to negotiable paper.
Let us now consider the remarks incidentally thrown out by the members of this Court in the examination of entirely different questions. “The expressions of every judge, says Chancellor Kent. 1 Com. 478, must be taken with reference to the case in which he decides; we must look to the principle of the decision, and not to the manner in which the case is argued upon the bench, otherwise the law will be thrown into extreme confusion.” This court has too frequently acted on the principle that judicial remarks to be binding must be directly upon the questions decided, to feel any hesitation in setting aside their own casual dicta if found not to be in accordance with strict law.
The ground upon which it seems to have been intimated by this Court that debt will not lie at the suit of the holder against an endorser, are 1st, that the undertaking of the endorser is collateral, 2d, that his liability is created by operation of law, and 3d, that the recovery would sound in damages. Jones vs. Lowe 4 Humph. 334; Maguire vs. Blanton 5 lb.
The term collateral is frequently used in a vague and indeterminate sense. A genuine collateral undertaking upon which debt will not lie, is an undertaking accessary to some primary obligation, upon which it is wholly dependent, and without which it cannot live. Destroy the primary obligation and you destroy the accessary. Tf the primary undertaking is not binding on account of fraud or illegality, or for any other cause, the collateral undertaking is equally at an end. The very essence of the contract consists in its being dependent; and the person bound may necessarily place himself in the shoes of his principal, and use any defence which might be relied on by such principal. Is this the situation of am endorser upon negotiable paper? Manifestly it is not. He is bound in the first instance as of his own debt and at all events, as soon as his liability has once become fixed by notice. The holder may sue him alone without noticing the maker. The consideration is usually, and by the theory of negotiable paper, always between the endorser and his endorsee. Even if the maker’s name is forged, or if for any other reason he is not responsible to the holder, the endorser is not exonerated. His endorsement is a new undertaking, upon a new consideration, as between himself and subsequent holders. He must stand upon his own contract, and cannot place himself in the shoes of the maker. So held by this court in Harris vs. Bradley, 7 Yerg. 310; and U. Bank vs. Osborne, 5 Humph. 413, and so laid down in Story on Bills. The undertaking of an endorser is not then such a collateral undertaking as is embraced by the case in 9 Yerg. 436.
The liability of an endorser may certainly be said, in one sense, to be created by operation of law. But assuredly this is no reason why debt will not lie against him. The very first principle of the action of debt is that “it is sustainable for any duty created by the common law or custom.” Com. Dig. Debt. A. 9; 2 Leigh’s N. P. 700. Chitty on Bills 648, 6 ed. In one sense any liability may be said to arise by operation of law — the liability of the different parties to bills of exchange and promissory notes arises by operation of law, and the liability of the' maker of a note to a remote endorsee in an action of debt is by operation of law. In this very connection Mr. Chitty in his work on pleading says: “This action, (debt) is sustainable for any debt or duty created by common law or custom, as on bill of exchange, by the payee against the drawer, or by drawer against the acceptor, &c.” p. 124.
We have already considered the third ground upon which it ' has been intimated that debt will not lie, to wit — that the recovery must sound in damages. If there is anything in this distinction at the present day, it must be evident that the recovery against the endorser of a negotiable instrument must as certainly be for a sum certain, as a recovery against any other party.
In conclusion, it may be remarked, the old technical distinction which narrowed the use of this action have been gradually giving way before the expanded views of modern judges; and no court has gone further in this laudable work than this Honorable Court. There is no reason why they should retrograde. Wherever there is indebtedness, debt as well as as-sumpsit should lie.
Houston, for the defendant.
1. The only question in this case is, whether or notan action of debt can be sustained by an endorsee against an immediate endorser of a promissory note, and I insist that it is well settled by our courts, that such an action cannot be sustained in Ten nessee. It is urged for tbe plaintiffs, that the action will lie in this State, upon the authority of Baity vs. Hazzard, 3 Yerg. 487. In that case, the assignment upon which the action of debt was brought was in these words: “I assign the within to W. W. Baily, and bind myself to stand good until paid, for value received of him,” and the assignment was signed and sealed by Hazzard. The terms of the assignment, and the fact that it was sealed by the defendant Hazzard, show at once that it was not such a case as the one now before the court. And, besides, the case does not seem to have been well considered, and it cannot, therefore, have much weight in this controversy. That case was referred to and commented upon by the court in the case of Tappan vs. Campbell, 9 Yerg. 436, in which the court, (speaking of the case of Baily vs. Hazzard) said: “We do not here assume to determine whether in that case, debt or covenant should have been the form of action. But we are satisfied, that it should not be held to decide that in the ordinary case of endorser and endorsee, or in other cases of collateral undertakings, debt can be maintained.” It is clear then, that the case of Baity vs. Hazzard, settles nothing in this case.
2. But again: it is decided in the case of Tappan vs. Campbell, 9 Yerg. 436, “that debt will not lie upon any collateral undertaking”. And in the case of Mitchell vs. Miller, Meigs Rep. 510, it is decided that an endorsement on a promissory note is a collateral, indirect or contingent liability, and it is insisted, that if these two cases are taken in connection, they fully sustain the position, that the action of debt will not lie in this case. This question has been long regarded as settled in this way by this court, in the case of Maguire vs. Blanton, 5 Hum. 361, Judge Turley remarked, that “this court had decided, that no action of debt will lie upon an endorser’s undertaking.” It is true, the question was not directly raised, but it was reaffirming what had been decided in the cases of Tappan vs. 'Campbell, Mitchell vs. Miller, and perhaps other cases which have not been reported. I am aware of the fact, that a different doctrine is held in some of the Stated, and the doctrine of the late English cases is against the position I have assumed, but those cases can have no influence on the question, if it has already been settled in this State.

Opinion:
Turley, J.
delivered the opinion of the court.
The only question presented for consideration in this case is, whether an action of debt will lie by an endorsee against his immediate endorser; it has been argued with much skill and ability, that it will, and such no doubt are the modern English authorities, and those of some ¿four sister States. But the reverse is the current of the decisions of the State of Tennessee, although the question has never been directly determined.
It is a matter of but little importance, whether the action of debt be allowed in such cases or not, as the action on the case is as easy and speedy a remedy as that of debt; and we feel that it is more consonant, not only with our decisions but also our institutions, that the action of debt should not be allowed in such cases.
We, therefore, affirm the judgment of the Circuit Court.