Court Opinion

ID: 6667681
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:07:16.995529+00
Date Added: 2024-06-11T16:00:23.411484
License: Public Domain

Buchanan, Ch. J.
delivered the opinion of the Court. This case comes up on two bills of exceptions. The first count in the declaration is on a promissory note, given by the appellee to Bicknell and Boies, and endorsed by them to the appellant, with other counts for money lent, &c. money had and received, and an insimul comjmtassent.
The appellant at the trial produced and proved the due execution and endorsement of the note on which the action is founded, and that it was endorsed to him by Bicknell and Boies, after it became due, and there rested his case.
The appellant then offered evidence to prove, that before, at the time, and after the making of the promissory note, he was the president of the Patapsco Manufacturing Company, that on the eleventh day of February 1819, (the day or. which the note purports to bear date,) Bicknell and Boies sold and delivered a quantity of goods to the said company, on a credit of six months, amounting to $661 50, (the exact amount of the note,) and sent them with a bill of parcels, headed — "The Patapsco Manufacturing Company, Edward Gray Agent, bought, of Bicknell and Boies.” That a few days afterwards he sent to Bicknell and Boies the note in question; that when the goods were sold, they knew he was the president of that company; that at the time of making 1hc note, the company was in good credit, and able to buy goods on their own credit, and that he was not in good credit: and also further offered in *414evidence, the charter of incorporation, and bye-laws of the-company, (which bye-laws are notin the record.) The whole of which evidence was objected to by the counsel for the appellant, as tending to vary a written contract; but the court being divided in opinion, the objection was not sustained, and the evidence was suffered to go to the jury; which forms the subject of the first bill of exceptions.
The counsel for the appellant, then prayed the court to instruct the jury, that the appellant was entitled to recover; but the court being again divided, the instruction prayed for was' not given; which forms the subject of the second bill of exceptions.
These bills of exceptions involve a twofold inquiry — 1st) Whether the evidence offered on the part of the appellee was admissible for any purpose? And 2d. Whether, being admitted, the court ought to have instructed the jury, under the circumstances of the case, that the appellant was entitled to recover? which will be briefly examined.
The note, in the body of it, purports to be the individual note of the appellee. The promissory part of it is in these words — “Six months after date I promise to pay to the order of Bicknell and Boies, six hundred and sixty-one dollars and fifty cents, for value received.” And it is signed by the appellee in his own name, with the addition of the words “President Patapsco Manufacturing Company.”
There is no doubt an agent may so contract, as to render himself personally responsible, but he may also so deal as to guard himself against liability; and if in this case the note were to be considered as not creating a personal responsibility, but as imposing the whole liability upon the Patapsco Manufacturing Company, it would follow, that the action could not be sustained. But it is asserted to be the personal undertaking of the appellee, as apparent upon the face of it, and not subject to be explained or varied by extrinsic evidence, so as in any manner to change its character, or divert the legal operation of it from the maker to his principal. Considered in that aspect, and treating it as the individual note of the appellee, (the ground on which the appellant^ seeks to place it,) there could bé no *415question of his right to recover, if the case rested solely on that ground.
But it is essential to the validity of every parol contract or agreement, whether verbal or written, that it be founded upon a sufficient consideration, otherwise it is considered in law as nudum, pactum, and cannot be enforced.
And this rule applies as well to a promissory note in the hands of the payee, or endorsee claiming by endorsement after it became due, as to any other simple contract.
And although a promissory note, which purports to have been made for value received, carries upon its face prima facie evidence of consideration; yet in a suit by the payee, or bolder, to whom it was endorsed after it became due, it is always competent to the defendant to prove either a veant or a failure of consideration, the endorsee in such case standing in the predicament of the payee, and holding it subject to all the equity of the maker.
Testimony, therefore, on the part of the appellee, was clearly admissible for the purpose of showing on what account the note in question was given, in order to prove the absence of a sufficient consideration; or what, in such a case, would become of the well known principle, that all parol contracts or agree» ments without consideration are void.1*}
There are indeed exceptions to the rule in favour of holders of promissory notes and bills of exchange, which have come 'into their hands in a due course of negotiation, arising out of the peculiar character of these instruments, but which do not apply to this case, the appellant claiming by endorsement after the note became due. And if it was given for a previously existing debt of the Patapsco Manufacturing Company, the establishment of that fact would be a full defence to the action, in the absence of any other consideration, for the purpose of proving which, the evidence offered was properly permitted to go to the jury.
Bichnell and Boies might, with a perfect knowledge that the appellee was acting as the president of the Patapsco Manufacturing Company at the time the goods were sold, have refused to give credit to that company, and elected to deliver them on the individual credit of the appellee alone; and it was quite *416competent to the appellee to have substituted his own responsibility for that of the company; and if that was the character of the transaction, and the note was given at the time, or being so liable, the appellee afterwards passed his note on that account, it was a good and sufficient consideration.
But if the credit was originally given to the company, and not to the appellee, by which it became the immediate debt of the company, and the note was afterwards given in consideration of that debt, without any new or superadded consideration, moving’ between Bicknell and Boies, and the appellee, then it was a promise to pay the debt of another, and void for want of a sufficient consideration, the statute of frauds requiring an agreement to answer for the debt, &c. of another, to be in writing; not intending, or having the effect to make any agreements good, though in writing, which at the common law would be bad, but leaving them to be judged of by the common law, as all other agreements merely'in writing are. And there is not only no evidence in the record of any consideration moving to the appellee, but none de hors the note, if offered, could properly have been received, the consideration forming a constituent part of every agreement, and the statute requiring the agreement to bo in writing, meaning not a part only, but the whole of the agreement.
The case of Wain and another vs. Warlters, 5 East, 10, which was elaborately discussed by the judges, is full to this effect. It was an action brought upon an instrument of writing in these words: “Messrs. Wain & Co. I will engage to pay you by half past four this day, fifty-six pounds and expenses on bill, that amount on Hall.” Signed, John Warlters. The declaration avers, that it was given in consideration of forbearance to sue one Bore and Hall for that amount due him on a bill of exchange; and at the trial the plaintiff offered parol evidence to prove the consideration of forbearance. But it was held, that for the want of the consideration appearing on the face of the instrument, it stood as a simple agreement to pay the debt of another without consideration, and was therefore nudum pactum, and void, and the plaintiff was nonsuited; and upon a motion for a rule to set aside the nonsuit, it was determined *417that the consideration ought to have been stated in the agreement, and could not be supplied by parol.
The suggestion, that if this note was in fact given for a debt due by the Patapsco Manufacturing Company, the appellee being the president of that company, it was given for his own debt, and therefore good, cannot be sustained.
The appellee, if bable at all for that debt, as president oF that .institution, was liable, not in his natural and individual, but in his corporate capacity alone, and that only to the extent of his corporate funds. Rut the charter of incorporation does not require that the president shall be a stockholder; and there is no evidence that the appellee was a stockholder at the time of this transaction. If, therefore, it was originally the debt of that institution, he was not answerable for that debt, or any part of it, in any capacity, from any thing appearing in this record.
In this case, however, whether the credit was originally given to the Patapsco Manufacturing Company, or to the appellee individually, and whether the note was in truth passed on account of that transaction or not, were questions of fact, proper to be decided by the jury, upon the whole of the evidence in the cause, and not by the court. The court, therefore, did right in not instructing the jury that the appellant was entitled to recover.
JUDGMENT AFFIRMED.