Court Opinion

ID: 6576931
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:35:08.723156+00
Date Added: 2024-06-11T15:57:08.031153
License: Public Domain

Poland, J.
The plaintiff’s action is founded upon a note given by the defendant as maker, to Chester Baxter, or order, and duly endorsed by Baxter to the plaintiff.
The execution of the note by the defendant, and its endorsement by Baxter, being conceded, or proved, the plaintiff established an apparent right of recovery.
The defendant then proved by the written agreement of March *3111, 1854, and evidence showing the relations between the defendant and Baxter, and the circumstances under which the written agreement was made, and the note of the same date executed, that though the defendant appeared upon the face of the note to be the party primarily liable to pay it, and Baxter appeared to he entitled to receive the payment, that in fact his liability was only that of a surety upon the note for Baxter, and that Baxter had no right to call on him for payment, and that if he was compelled to pay the note to some third party, he would have the right to recover the amount from Baxter as money paid for him. That this was the original position of the parties to the note and that Baxter could not have then compelled the defendant to pay it, was conceded upon the trial, and it was also conceded that the note was endorsed by'Baxterlto the plaintiff for collection merely, so that the defendant can avail himself in this action of all defences he could have made, if sued in the name of Baxter. The plaintiff, after the original relation of the'parties to this note had been shown, gave evidence tending to show that subsequently a new arrangement was made between Baxter and Downer, by which in a settlement of their dealings Baxter allowed the defendant the sum of four thousand dollars, and upon which the defendant agreed that he would assume the payment of this note as maker and principal, and that thereafter, instead of his standing upon the note as a surety merely for Baxter, he became the principal, and Baxter a mere surety for him.
In short the arrangement which the plaintiff claims was made and which the jury under the charge found proved, was equivalent to a payment of the amount of the 'note by Baxter to Downer, and an agreement on the part of Downer to pay the note. Some question is now made as to the power of the parties thus to change their relations upon this note, and thus make the party a principal who was before but a surety. But upon this point we have no doubt. The very ground of defence set up by ■ the defendant is, that though upon the face of the note he appears to be maker and principal, still that the real contract and agreement between him and Baxter was that he was but a surety and Baxter the real principal. If it were competent for the defendant to show such agreement, (as we have no doubt it was,) jt would be *32very singular that the plaintiff might not show that upon good consideration this relation was changed, and that the defendant agreed to assume and hold in fact the same legal relation and liability upon the note, which the note itself imported. It was equivalent to the execution of a new note by the defendant. This question was really before the court when this case was heard two years ago, and was passed upon, and the question is now rather suggested than insisted upon by the defendant’s, counsel.
Two objections are raised as to the admissibility of evidence given on the trial; one as to the admissibility of the paper made by Governor Hubbard at the interview and settlement between Baxter and Downer ; the other as to the admissibility of the declarations of Governor Hubbard in contradiction of his testimony as proved by the minutes of Judge Underwood upon the former trial. The paper made by Hubbard not being a contract executed, or a paper made by the parties, was not admissible as an independent piece of evidence, nor was it offered as such, but only in connection with the evidence of Baxter, as tending to strengthen and corroborate his testimony, and to show what was really settled and adjusted between the parties, at the time the plaintiff claims Do.wner assumed to pay the note in suit, The testimony of Baxter was that Hubbard was present at such settlement, acting as the mutual friend of both parties, that he made a statement or list of the claims presented on both sides, in the presence of the parties, and that the parties settled according to the statement of claims upon the paper, and solely upon that basis.
In connection with this evidence there could be no doubt of the admissibility of the paper, any more than if it had been made by the defendant himself, though perhaps not entitled to the same weight. The evidence tended to establish that this paper was made in the presence of the defendant with his assent, that he recognized its correctness by giving his note to Baxter for the balance apparently due him on the statement thus made. That the paper, if properly authenticated as the basis of a settlement between Baxter and Downer, tends to show that Baxter allowed to Downer the amount of this four thousand dollar note, admits of no question.
The objection to the evidence of the declarations made by *33Governor Hubbard, claimed to be contradictory to and inconsistent with his testimony given upon a former trial, as shown by the judge’s minutes, we understand to be based upon the ground that the witness had no opportunity afforded him to explain or qualify such imputed contradictions of his testimony. It is a well settled rule of practice in this State that evidence oí this character will not be allowed by way of impeachment of a witness, unless the witness be first inquired of as to whether he has made such statement, and his attention directed to the occasion when, and the individual to whom such statement is claimed to have been made, so as to afford the witness every reasonable opportunity to give any explanation or qualification in his power. In this case this clearly was out of the power of the plaintiff to do upon this trial, as Governor Hubbard was dead, and his testimony was introduced by showing what he swore to upon a former trial.
It does not appear from these exceptions whether at the former trial, when Governor Hubbard was upon the stand and gave this testimony, any inquiry was made of him as to these alleged contradictory and inconsistent statements or not, and an opportunity thus then afforded him to explain them, or to contradict them if he chose.
The plaintiff’s counsel allege that such inquiries were then made, and if they were, there could be no question but what this evidence would be equally as admissible as if the enquiry had been made of Governor Hubbard upon this trial.
But we are inclined to hold that if it appeared that no such inquii-y was made of him on the former trial, such evidence would be properly admissible when his testimony on the former trial is proved from'the minutes. Such contradiction might not have been known to the party at the time of the former trial, and if known, the condition of the case and the evidence on that trial might have rendered it entirely unnecessary to give it in evidence. When, therefore, such evidence is produced from the minutes, and when no inquiry can be made of the witness, the party ought not to be deprived of such evidence if he has any to offer, If it appear that such evidence was known to the party at the former trial, and he made no inquiry of the witness when he had an opportunity to do so, it would afford so much suspicion against *34the evidence, as usually to deprive it of much weight with the jury.
This principle has virtually been decided in this State as we think. In Downer et al. v. Dana et al., 19 Vt. 338, it was decided that this rule of practice does not apply to witnesses whose testimony is taken and used in depositions, even when they are taken with notice to the adverse party, who appears and examines the witness, and that such inconsistent declarations may be 'proved without any inquiry of the witness at the time his deposition was given.
The minutes of the witness’ testimony on a former trial seem much the same as a deposition, and we think the reasons are equally strong for not applying this rule in such cases, as in the case of depositions.
The only remaining question in the case is, whether the payment of this note by Baxter to the Royalton Bank, (to whom Hubbard had negotiated it,) destroyed its negotiability so that Baxter could not legally transfer it to the plaintiff. We do not think this question is at all affected by the fact that originally the relation of the parties was really different from that apparent on the note, that the defendant originally was only an accommodation maker and surety for Baxter, but by a new agreement had become the real responsible maker, and the party ultimately liable to pay it. After this last arrangement was made the rights of the parties stood as if that relation had' always existed from the time when the note was originally executed. The naked question is then presented, whether, when the payee of a note has once transferred it, but by the failure of the maker to pay it, he is compelled to take it up, he can legally transfer it to another, or is the negotiability of the instrument destroyed ?
There seems to have been, at an early period in the history of the commercial law, an idea that such payment or taking up of a note or bill by the last endorser wholly destroyed its negotiability, even against prior parties, who were ultimately liable to pay the note or bill, and there were some decisions accordingly. Such were the cases cited by the defendant; Beck v. Robly, 1 H. Bl, 89; Blake v. Sewell, 3 Mass. 556; Boylston v. Green, 8 Mass. 465.
*35But however much this notion might formerly have obtained, it is now thoroughly exploded both in England and this country, and these cases have been expressly overruled; see Guild v Eager, 17 Mass. 615; Hubbard v. Jackson, 13 E. C. L. 555; Story on Promissory Notes 198 ; Story on Bills, and Chitty on Bills 247, and cases cited by Story and Chitty.
The principle seems now to be settled conclusively that when a note or bill is paid or taken up by any party to it, it not only destroys its negotiability, but extinguishes all right of recovery upon it against all parties subsequent to him upon it, and to whom he would be liable to pay it while they held it; but that as to all parties prior to him, and to whom he has the right to look for payment, when the note comes again to his hands, by taking it up he has the sam) right that he had before he made the first transfer, and that as against them he has the same right to again transfer it that he had originally, and that this continues until the note or bill is finally extinguished by being paid by the party liable to make ultimate payment.
We find no error in the proceedings of the county court, and the judgment is, therefore, affirmed.