Coddington v. . Davis

Gardiner, J. The Plaintiff in error, the defendant below, was the endorser of a note made- by Thomas Coddington for 110,000. Thomas Coddington failed, and on the 23d January, 1840, made an assignment to Davis, one of the firm of Davis, Brooks & Co., the endorsees and holders of the note and the plaintiffs below. Qn the 28th of January, and prior to the maturity of the note, the defendant with full knowledge of the above facts', wrote the following letter : “ Messrs. Davis, Brooks & Co.—Gents : Please not protest T. B. Coddington’s note due 2d February, for ten thousand dollars, and I will waive the necessity of the protest thereof; and oblige respect’ly, &c., SAMUEL CODDINGTON.” The construction of this letter is the first important question presented in the cause. The term protest in a strict technical sense is not applieable to promissory notes. The word, however, as I apprehend, has by general usage acquired a more extensive signification, and in a case like the present includes all those acts which by law are necessary to charge an endorser. When among men of business a note is said to be protested, something more is understood than an official declaration of a notary. The expres *190 sion would be used indifferently to indicate a series of acts necessary to convert a conditional into an absolute liability, whether those acts were performed by a mere clerk or a public officer. It is obvious that the word was used in its popular acceptation by the defendant below. He requests the endorsees “ not to protest the note, and that he would waive the necessity of the protest thereof.” The protest to which the endorser alluded was something “ necessary” to be done, something also for the benefit of the endorser, for ho assumed to waive it. It could not therefore be a memorandum, or declaration made by a notary, because neither of them were required. Nor could he have intended to waive that which whether performed or omitted, his right would in no manner be affected. The only things necessary on the part of-the endorsees was a demand of payment of the maker, and notice to the endorser. By waiving the necessity of protest the defendant dispensed with both, or his communication is destitute of all meaning. It was argued indeed that the defendant might have referred to the notarial certificate authorised by statute. But this certificate is made prima facie evidence of a demand and notice in favor of the endorsees. It is for their benefit. The defendant in making such reference must have supposed that the certificate was necessary evidence, because he waives the necessity of a protest, which according to the argument is equivalent to dispensing with the necessity of a notarial certificate. Now to every fair mind, wrniver of proof necessary to establish a particular fact, is equivalent to an agreement to admit it. Whether therefore the defendant by waiving the necessity of a protest, intended to dispense with demand and notice, or with the evidence of them the result would be the same, and in either case he is concluded by his own stipulation from raising the objection taken upon the trial. I agree with the learned Judge who delivered the opinion of the Supreme Court, that the circumstances attending the written stipulation of the defendant confirm this view; but I prefer to rest my opinion upon the letter alone, as furnishing prima facie *191 evidence of an intent by the endorser to waive demand of payment and notice to which he was otherwise entitled. Another important point is made by the defendant, that the written statement signed by the plaintiffs and others, dated 8th February, 1840, was a valid discharge by the plaintiff of Thomas Coddington the maker of the note from all liability thereon, and consequently of the endorser. On the 23d of January, 1840, Thomas Coddington executed his assignment to Davis, and directed his assignee to pay and discharge the debts owing by the assignor contained in the schedule marked A. in equal proportions. In this schedule we find: • ” Samuel Coddington, for endorsement, $10,000 “ “ “ 1,854 “ “ Balance of account, 2,178 Taking the schedule in connection with the assignment, it will be perceived, that the debts to the defendant for endorsements and for private account, are placed upon the same footing as debts owing by the assignor to the defendant, and both are directed to be paid absolutely. It is obvious therefore that thé $10,000 endorsement, which is admitted to be the note in question, was understood by the parties to the assignment to be the debt of the defendant and treated accordingly. This was on the 23d January: on the 24th, the defendant in writing, directed Davis as assignee to pay to the order of Davis, Brooks & Co., all monies that should be received by him as assignee on his account, to the extent of $10,000 value •received. By this act the defendant riot only assented to the assignment, but as it appears to me, distinctly recognised .the relation in which he was placed by that instrument as creditor to the assignor to the amount of the $10,000 unconditionally, and of course liable for the same amount to- the plaintiffs. He directed the payment of a sum equal to the note, not only out of the fund set apart in the assignment for that purpose, but out of the proceeds of the property exclusively applicable to the discharge of a debt due to him individually, for a bal *192 anee of account. In a word, he, recognized-this as a debt due from Thomas Coddington to himself, by claiming under the assignment by which it was so declared, and as a debt due from him to the plaintiffs by a voluntary application of his private funds to its payment. In conformity with this view of his rights and liability, we find him on the 28th day of January, the date of his letter to Brooks, Davis & Co., waiving the necessity of protest, and thus converting a conditional into an absolute liability upon his part, for the payment of this note to the plaintiff. tinder these circumstances the discharge of February 8, 1840, was executed by Davis in behalf of Davis, Brooks & Co., and by some others of the creditors of T. Coddington. This instrument, which is without seal, recites in substance, that T. Coddington was indebted or liable to the subscribers, and that he had made an assignment to Davis for the benefit of the subscribers and other creditors, and in consideration of one dollar, of said assignment, and of a promise to pay any balance that might not be received under the same, in seven years—the subscribers did release and discharge and forever acquit the .said T. Coddington, from all claims, demands, liabilities, engagements, judgments, and other responsibilities then existing against him, beyond ryhat-they might realize on said claims, &c., from said assignment; “We,” the instrument proceeds, “receiving and assenting to the conditions of said assignment, and coming in under tJie same, for a full and perfect discharge of our said claims. The said Codding-ton, in consideration of the above, giving to us his written engagement to pay the balance,” &c. It is apparent that this discharge refers to and absolutely adopts the assignment, with all its conditions, and provisions as its basis. One of these conditions was, that the defendant should be paid out of the fund, as a preferred creditor, the amount of this note as a debt due to him. To this the parties to the discharge expressly assented. When, therefore, it was recited in that instrument that Thomas Coddington was indebted or liable to Davis, Brooks & Co., for certain debts, *193 and that the former had made an assignment for the benefit of the latter as creditors, the parties could not have referred to this demand which they had agreed to describe and had actually inventoried as the debt of another. It may be granted that independent of the assignment, the plaintiffs as to this note were the principal creditors of Thomas Coddington. But we must seek the intention of the parties in their writings, not in the relation previously existing. When therefore the assignment, as we have a right to infer, purposely omits Brooks, Davis & Co., and substitutes the defendant as the creditor to whom this debt was owing; the discharge upon authority as well as the plainest principles of justice should be restricted to the relations established by the instrument, to which it refers and expressly adopts. (Tayler vs. Homersham, 4 Maule 1 Selwyn 422; 23 Com. Law R. 50, 7 Com. Law 205, 1 Cowen 123, 126.) The engagement entered into by Thomas Coddington at the time of the execution of the release confirms this view. By that he promised to pay Brooks, Davis & Co., whatever they might not realize from his assignment, on account of his indebtedness to them. This debt of $10,000 had been inventoried as due to S. Coddington. To suffer Brooks, Davis & Co. to share equally with the creditors of the second class, upon the ground that this debt was due to them also, would be virtually a fraud upon those creditors, upon the assignor, and those who executed the discharge with Brooks, Davis & Co. These creditors with justice could say to the plaintiffs, that with their concurrence the assignor had appropriated property for the payment of this debt to the defendant. You have elected to claim through him, to which he has assented, and you are bound by your election. It is unnecessary therefore to consider the objection of a want of consideration, &c., raised to this discharge. Viewing it as legally binding upon the parties, it does not extend to this demand, and cannot have the effect either to disdv-vge or extend the time of payment of the note in quest! w ')'be judgment of the Supreme Court should be affirprcvV *194 Broksok, J. also delivered an opinion in favor of affirmance; and Jewett, Ch. J., Jokes and Wright, Js., concurred.