Bank of St. Albans v. Gilliland & Raymond

Nelson, Ch. J. By the Court, If an objection had been taken to the declarations of William Raymond, one of the defendants, as to his object in procuring the note, and the intended use of it, I think they should have been excluded, as the effect was to enable him to manufacture evidence to defeat an action against himself. This is fundamentally wrong. The fact that the note was procured, and passed away for his individual liabilities, should have been shown by other proof. The whole defence rested exclusively upon his own declarations. If this were sanctioned, the party might always qualify the legal effect of the making or endorsement of a paper in this way. Even as the case stands, I doubt if the proof went far enough to let in ihe ’defence ; there is no evidence of the actual transfer by William Raymond for his individual purpose, which should have been affirmatively shown. But conceding the evidence to have been competent and sufficient, I am of opinion the plaintiffs were still entitled to the verdict. The evidence undoubtedly threw upon them the burden of proving that they received the note in the usual course of business, and for value. This they did, as it came to them before maturity, and in extinguishment of a subsisting indebtedness. We have frequently held that receiving a note for a precedent debt is not [313] receiving it for value within mercantile usage, 20 Johns. R. 637 ; 12 Wendell, 487 ; 14 Id. S. C. 57; 16 Id. 659; see also 13 East, 135, (n) ; 9 Barn. & Cress. 208; Byles on Bills of Exch. 20 ; but here was something more. The note was taken in satisfaction of the indebtedness, without recourse, and the debt discharged, importing that it was received at the risk of the holder, and that unless available in his hands, he loses the demand. He has, therefore, trusted to the credit of the papers as effectually as if he had parted with the securities of third persons at the time, having discharged the personal responsibility of the ^or iginal debtors. [* 314 ] This principle has been repeatedly recognized and acted upon, though perhaps never expressly adjudicated in this court. 20 Johns. R. 646. Woodworth, J. 9 Wendell, 174. It was said on the argument, that if the plaintiffs fail by reason of the defence here setup,-the original indebtedness would revive, and they be placed in as good a situation as before; but that is an assumption aga-nst the fair import of the case ; for if the note was taken without recourse, apd in ex-tinguishment of the debt, it is gone. Upon such a state of facts we are not at liberty to say the debt would certainly revive, and it would be unjust to deprive the plaintiffs of their security upon a mere speculation as to the revival, or possibility of another remedy. New trial granted; costs to abide event.