Court Opinion

ID: 6234054
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:28:25.413224+00
Date Added: 2024-06-11T08:57:58.974434
License: Public Domain

The opinion of the court was delivered,
by Agnew, J.
As between the parties to the action, this case does not fall within the Statute of Frauds of 26th April 1855, requiring a writing to be signed by the party to be charged in order to make him answerable for the debt or default of another. The note upon which this question arises was drawn by T. and J. P. Scott, to the order of Timothy Slack, and endorsed by. James S. Kirk, first in the order of position on the hack of the note, and next by Slack, the payee. The note was discounted by the National Bank of Oxford for the benefit of the drawers, who after-wards failed to pay, except a part. The bank then collected one-half of the balance from Slack and the other half from Kirk, who paid voluntarily, but asserting at the same time Slack’s liability to him. Then granting that, by reason of Kirk’s irregular endorsement before Slack, the payee, neither Slack nor the bank could compel payment by Kirk, according to the decisions in Barto v. Schmeck, 4 Casey 447, Schaffer v. The Bank, 9 P. F. Smith 144, and Jack v. Morrison, 12 Wright 113, yet Slack, the payee and endorser of the note, was undoubtedly liable to the bank. He could set up neither the Statute of Frauds nor Kirk’s want of liability, being the payee and regular endorser of the note as to the bank. He could not object, therefore, to payment to any transferee of the bank, or to any one rightfully paying the note, and entitled to substitution to the rights of the bank. Kirk, as irregular endorser, was the only party having a right to set up the Statute of Frauds, for his was the only parol agreement. But if, as an irregular endorser, liable only' upon his verbal promise to be answerable to the bank for the payment of the note, he chose to comply with his agreement, who can object? Certainly not Slack, for the payment enured to his benefit, if Kirk was liable to him; and if not, it was a matter of indifference to him whether he should pay the bank or some one else who bo-, came entitled to the note. The statute was made for the proteo-. tion of a party alleged to have made a verbal assumption, to be answerable for the debt or default of another; but if he admits his promise, and does not ask the shield of the statute, it does not compel him to be dishonest. Clearly Kirk had a right to pay if he would: and paying, he is entitled in equity to be subrogated to the rights of the bank, unless Slack can show that Kirk had also agreed to be liable to him for payment by the drawers. This promise, though not enforceable against Kirk, by reason of *385the statute, probably would be a defence to Slack. What right, ■ 'then, has Slack to object-to Kirk-fulfilling any promise he had made to the bank to be answerable for payment of the- note ? Clearly he had none by reason of the face of the paper, Kirk being an irregular endorser and not liable to him, according to the cases before, cited. There was amoral obligation on the part of Kirk to perform his promise to pay the bank, and this, followed by actual payment, constitutes his equity, and entitles him to substitution. If Slack claims protection against Kirk by reason of a promise to indemnify him,- he must make proof of it; otherwise, why should he have' any defence to Kirk, standing in, the room of the bank? If it be objected that the irregular endorsement by Kirk will not in itself enable him' to maintain the-suit, it might be answered by saying that the action is amendable, and the name of the bank can be used for his benefit. But what is to hinder Kirk’s action ? On paying the note to the bank, he is entitled to delivery of it, and can claim as a holder under Slack’s blank endorsement. His own name being irregularly endorsed before Slack can of itself make no. difference, for he is not liable to Slack upon that endorsement, according to Barto v. Schmeek and Schaffer v. The Bank, the presumption being.that he was intended'to be the second endorser, and it was Slack’s own wrong to endorse below him. To escape this Slack must resort to proof. But if we resort to the parol evidence in this ease the same result follows. It shows that'Kirk never did assume the position of first endorser 'intentionally, and that his name was written above Slack’s by inadvertence or mistake. The note was brought to him by the drawer, with Slack’s endorsement already on it, and without an intimation that he should assume the position of first endorser. He went to the bank with the drawer to assist him in having it discounted and without having endorsed it; and it was ■ only when the bank refused the discount without his name that he endorsed the name. The order of his endorsement, it is evident, was unnoticed, or its effect unknown, as it tended rather-to jeopard the security of the bank than to increase it. As the ease.stood, therefore, this evidence did not alter the relation of Slack to the bank, who had regularly endorsed the note as the payee, nor did ■ it give him any recourse against Kirk. In either aspect, therefore, the plaintiff was entitled to recover the money paid by him to the bank, the payment not being voluntary in the sense of a payment by a mere volunteer, but being made on the footing of a promise to pay and an endorsement of the note. Having waived the protection of the statute, and honestly paid the bank according to his undertaking, he has. a right to use the name of the bank, or to sue in his own name to recover the money.
Judgment affirmed.