Court Opinion

ID: 6946461
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:26:12.517702+00
Date Added: 2024-06-11T16:07:55.901546
License: Public Domain

Caton, Justice, delivered the following dissenting opinion : I regret that I feel compelled to disagree with a majority of the Court in this case. After a careful examination of the authorities and general principles applicable to the main questions involved» I am constrained to the conclusion, that where a name is found on the back of a promissory note in the hands of the original payee, the presumption of law is, in the absence of proof on the subject, that it was put there at the time of the making of the note, and as part of the original transaction. In the case under consideration, the proof is so entirely uncertain and unsatisfactory, that it leaves the mind without a bias or inclination one way or the other, and the law is left to raise its own presumption on the subject. The name on the back of a note, while in the hands of the original payee, does not make the writer, in a technical sense, an endorser. He cannot be the first endorser, because he is not the payee of the note, nor can he be a second or any subsequent endorser, because his endorsement is .not preceded by the name of the payee. The very term endorser presupposes that the note, either is, or has been negotiated. The defendants, then, cannot be treated as endorsers of this note. Then for what purpose were the names put on the back of it ? Not being endorsers, it was not for the purpose of giving the note negotiability, but must have been for the purpose of increasing the payee’s security; and if this was the object, there is nothing unreasonable in presuming that the security was required and obtained, at the time the note was given. This security was required because the payee was not satisfied with the responsibility of the maker of the note. If this responsibility of the defendants was undertaken at the time the note was given, then no new consideration was necessary to make their undertaking obligatory on them, because the presumption of law is, that it was a part of the original contract between the plaintiff and Gray, that this security should be given. By presuming that this endorsement, (and I use the term not in its technical sense) was" made at the time the note was given, and was a part of the original contract, we give effect and efficacy to the acts of the defendants. If we do not presume that the undertaking was made at that time, we let go everything like certainty, and determine without any fixed principle or certain rule. If we determine that it was made after the execution and delivery of the note, and on a new arrangement, it would be an undertaking on the part of the defendants to pay the preexisting debt of Gray, which, by the statute of frauds, must be in writing, on a good consideration. By adopting the construction which I give, a manifest embarrassment is avoided, and the evident intent of the parties is carried into execution; and unless we do adopt that construction, we shall, in most instances, discharge the liability of such sureties altogether. Unless the presumption of law is that such an endorsement was made at the same time with the note, we must presume it was made afterwards; and if we do this, we determine that the act was prima facie void, because we make it a new and independent transaction, unconnected with the consideration of the note, and.requiring a new consideration to be proved to support it. But T':do not understand the opinion of Mr. Justice Douglass, to determine that the presumption of law is, that the names of the defendants were written on the note after its execution. But in the absence of all proof on the subject, the law must determine at what time this undertaking was entered into by the defendants, whenever that question of time becomes material, as it most unquestionably does in a case like this. It will not be denied, I presume, that if it were proved by testimony on the trial, that the defendants wrote their names on the back of this note, at the time the note was made, it would all be considered one transaction, and supported by the same consideration, and their liability would be fixed; while, on the other hand, if it were proved that their names were not put there till afterwards, it would be a new and independent undertaking, to support which the plaintiff must prove a new consideration. I think, then, that the courts of New York and Massachusetts, in determining, in the absence of all proof on the subject, in cases like the present, that the endorsement was made at the time the note was made, and for the same consideration, have adopted a sound and salutary rule, perfectly consistent with the general principles of law, and, in fact, the only one that can secure to the parties, in many, if not in most instances, the rights and liabilities intended by them; and against this I have been- unable to find a solitary decision or dictum. If I have not failed, then, in what I have been attempting to show was the time and consideration of this endorsement, then it was competent for the payee to write any agreement over the names of the defendants, consistent with the nature of the instrument, and the agreement of the parties; (1) and when this is done, the parties are liable on that agreement, in the same way that they would have been, had they filled up the endorsement themselves, at the time. The enquiry now is, what was the nature of the liability they intended to assume ? This, too, in the absence of all proof on the subject, the law must determine, from the nature of the case, and the circumstances of the transaction; while, if there is any satisfactory proof, that must control and determine the nature and extent of the liability. I have already said that the defendants here cannot be considered endorsers, because the paper was never put in circulation, (2) but has always remained in the hands of the original payee, to whom alone the defendants are liable, if they are liable at all, and to whom an endorser can never be liable, where, as in this State, a note can only be put in circulation by endorsement. The payee of a note here must be the first endorser; and he, as first endorser, must stand between all subsequent endorsers and danger; so that here, if we treat the defendants as endorsers at all, they are second and third endorsers, so that instead of their being liable to the payee, he in fact might become liable to them. The liability of an endorser is only conditional; while, I presume it will hardly be doubted, the liability these defendants intended to assume was absolute. If I am not mistaken in the presumptions which the law raises, then the nature of the defendants’ liability is precisely the same as if it had been proved, on the trial, that the defendants and Gray put their names to this paper at the same time, and for the purpose of increasing the plaintiffs’ security, and that in consideration of their becoming such security, the plaintiffs gave the credit, which, without their names, might not have been given. Upon such a state of facts I hold, and upon the authority of the cases referred to in the opinion of the majority of the Court, (1) that these defendants became original joint and several promisors with Gray, for the payment of the sum of money in this note mentioned, and that their agreement with-the plaintiffs was absolute, that the money should be paid as in the note expressed; and, in pursuance of such understanding, the plaintiffs were authorized to write an agreement over the defendants’ names, so as to charge them either as guarantors or as sureties; this being perfectly consistent with the nature of the instrument, and the agreement of the parties, which was that their responsibility should be absolute, for the payment of the money, and not conditional, as it would have been, had they been technical endorsers. In this case, then, I hold that the plaintiffs had a right to fdl up this contract as they have done, to wit: “ For value' received, we jointly and severally acknowledge ourselves as securities of John Gray, for the payment of the within note at maturity.” The plaintiffs having chosen, as they had a right to do, to treat the defendants as sureties to this note, the authorities clearly establish that they are liable as joint and several makers of the note, precisely the same as if the note had read, “We jointly and severally promise to pay, the first as principal, and the others as sureties,” &c., and their names had all been put to the bottom of the note. It is said, however, that this case is distinguishable from any of the cases to which reference has been made, in this, that, in the case before us, the principal and sureties were all charged in the same suit, whereas, in all the other cases, where the person, whose name is found on the back of the note, has been treated as original maker of the note, he has been sued separately. But this, I submit, can make no difference in principle, and is attributable rather to accident, than necessity. If all can be treated as joint and several makers of the note, there is certainly no reason why all may not be sued jointly, and the sureties surely ought not to object that their principal is joined with them. But at the time this note was offered in evidence, and rejected by the Court, Gray was not a party to the suit. The Court had permitted the plaintiffs to dismiss their suit as to him, and proceed as to the present defendants, so that, if the Court was correct in permitting this to be done, the suit then stood precisely as if Gray had never been made a party to it. A majority of the Court differing with me in opinion on this question, I have deemed it unnecessary to examine the question, whether the Court below was correct in allowing the plaintiffs to discontinue as to Gray, and proceed as to the other defendants; while this would have been an important enquiry, had a majority of the Court been with the plaintiffs on the other points. Judgment affirmed.   Chit, on Bills 257, note 1; Josselyn v. Ames, 3 Mass. 274, and cases there cited; Beckwith v. Angel, 6 Conn. 315.    Chit. on Bills 44.    Josselyn v. Ames, 3 Mass, 274; White v. Howland, 9 Mass. 315; Hunt v. Adams, 5 Mass. 358; Herrick v. Carman, 12 Johns. 159; Nelson v. Dubois, 13 Johns. 175; Ulen v. Kittridge, 7 Mass. 233; Moire v. Bird, 11 Mass. 435; Campbell v. Butler, 14 Johns. 349; Beckwith v. Angel, 6 Conn. 315; Alein v. Rightmere, 20 Johns 365; Dean v. Hull, 17 Wend. 214.