Herrick v. Carman

Spencer, J. delivered the -opinion , of. the court; The def féndant in error purchased the noté at a discount, and xvith full knoxvledge of all the facts in the case; his right, therefore, to recover, cannot . be superior or better than that Of L, Carman Sr Co¿, from xvhom lie derived xvhatexmr title lie had... It does not appear that the plaintiff in-error endorsed the note for the purpose of giving Ryan credit xvith L, Carman Sr Co., or that he xvas in' anyxvise informed of the use to xvhich Ryan meant to apply the note. In the absence of any-proof to the contrary, xve must intend that Herrick meant only to become the second endorser, xvith all the rights incident to that situation, The fact of bis endorsing first, in point of time, can have no influ [161] ence> for he must have known, and we are to presume he acted on that knowledge, that though the first to endorse, his endorsement would be nugatory, unless preceded-by that of the payees of the note, Since the case of Russell v. Langstaffe, (Doug. 514.) it is not to be doubted, that the endorsement of a blank note is a letter of credit for an indefinite sum; but the present is not that case. There can be no doubt, here, but that the note was filled up when it was endorsed by the plaintiff in error. Had it appeared that the plaintiff endorsed the note'for the purpose of giving Ryan credit with Lawrence Carman & Co., then I should have considered him liable to them, or any subsequent endorser, and the plaintiff’s endorsement might have been converted into a guaranty to pay the note, if Ryan did not, according to the decision of the supreme judicial court in Massachusetts. (3 Mass. Rep. 274.) Under such a state of facts, there would be t),o objection to the right of the defendant in error to recover, as the endorser of Herrick. In Bishop v. Hayward, (4 Term Rep. 470.) Lord Kenyon impliedly admits that there may be Circumstances under which a prior endorser "may recover against a subsequent one. We have already decided, that the payees of this note could not, directly or indirectly, recover on it, (10 Johns. Rep. 224.) .and that decision is supported by the case of Bishop v. Hayward. ' The defendant in error, having purchased this not.e at a discount, and with full knowledge of the facts, has virtually agreed not to resort to Lawrence Carman & Co. in any event; and yet, if he can sustain this suit, he will, in effect, violate the agreement under which he became the purchaser of the note; because, upon this evidence, Herrick, if obliged, to pay, would have his remedy over against Lawrence Carman & Co. The defendant does not stand before the court with the title or character óf a fair, bona fide, endorsee of a note, in the usual course of trade ; but rather in the light of a speculator, attempting, under the specious character of an endorsee, to recover a sum of money, to which those from whom he derives his title had, with his full knowledge,, no right. It may be [162] regarded as a general rule, that when an endorser cannot recover against a subsequent endorser,' no person acquiring a title under such prior endorser, and acquainted with all the facts, shall be allowed to recoven Judgment reversed.