Mitchell v. Conrow

The opinion of the Court was delivered by Kennedy, J. The only error assigned here, is founded upon a bill of exceptions to the opinion of the Court below, which presents this question: Is the endorser of a negotiable note in an action by the endorsee against the drawer thereof, a competent witness, upon being released by the defendant, to prove an agreement made between the plaintiff and the endorser, subsequently to the giving of the note, and to its coming into the hands of the plaintiff, whereby the latter agreed that he would not sue or trouble the defendant, whom he knew to be merely an accommodation drawer, if the endorser would give him (the plaintiff) a judgment bond, including the money mentioned in the note,.and other moneys owing by the endorser at the time, to the plaintiff; and that the judgment bond was accordingly given by the endorser, and accepted by the plaintiff? The Court below decided against the competency of the witness. I do not know that this decisision could be sustained, even if the rule, as laid down in Walton v. Shelley, (1 Term Rep. 296,) were to be regarded here as the test. That rule, however, seems to [575] be nearly, if not wholly, abrogated in England. Here it never was admitted to the full extent laid down in that case. With us it has been confined to the case of negotiable instruments, actually negotiated, in the usual course of business. Pleasants v. Pemberton, (2 Dall. 196.) 1 Yeates, 202. Baring v. Shippen, (2 Binn. 165, 168.) M‘Ferran v. Powers, (1 Serg. & Rawle, 102.) Blagg v. Phœnix Ins. Co., (3 Wash. C. C. Rep. 5.) Baird v. Cochran, (4 Serg. & Rawle, 399.) Hepburn v. Cassel, (6 Serg. & Rawle, 113.) Bank of Montgomery v. Walker, (9 Serg. & Rawle, 236.) Griffith v. Reford, (1 Rawle, 196.) Gest v. Espy, (2 Watts, 268, 265.) Bank of Pennsylvania v. M‘Calmont, (4 Rawle, 311.) The rule laid down in Walton and Shelly was, that a party, after having given credit to a deed or instrument of writing, should not be permitted to invalidate it by his testimony. But the endorser of the note, in the case before us, was not offered as a witness to impeach the validity of the note; but to show merely that after it had been given and endorsed by him, and as such, being of full force and virtue, the plaintiff, then the holder of it, in consideration of receiving a judgment bond from the endorser, securing the payment of the money therein, including that of the note, agreed in effect, to release the defendant from the payment of the note. It is perfectly clear, that in being called to prove this, the endorser of the note was not offered for the purpose of proving any thing inconsistent with good faith on his part; or that the note was not valid when he passed and gave currency to it by his endorsement of it, as good. The rule applicable to this aspect of the case is laid down in The Montgomery Bank v. Walker, (9 Serg. & Rawle, 236;) and shows that he was competent to prove any facts which took place subsequently to his endorsing the note,'which tended "to show that the defendant was thereby released or discharged from the payment of it. And this rule, that a party to a negotiable instrument is a good witness to prove any facts subsequent to the due execution of the note, which go to destroy the title of the holder, has been recognised and adopted in several of the sister states. See Baker v. Arnold, (1 Caine’s Rep. 258.) Woodfall v. Holmes, (10 Johns. Rep. 231.) Warren v. Merry, (3 Mass. Rep. 37.) Barker v. Prentiss, (6 Id. 430.) Parker v. Hanson, (7 Id. 470.) . Webb v. Danforth, (1 Day Rep. 301.) Man v. Swann, (14 Johns. Rep. 270.) Hulby v. Brown, (16 Id. 70.) Myers v. Palmer, (18 Id. 167.) So in conformity to the same principle, a prior endorser of a note was held to be a competent witness for the maker to prove that it was paid. Charnington v. Miller, (Peake’s New Rep. 6.) Humphreys v. Moxan, (Id. 52.) Bayl. on Bills, 242. Stark. Evid. 180. But it has been objected here that the endorser was offered as a witness to prove also that the defendant became drawer of the note for his, the endorser’s accommodation; which was held in the case of The Montgomery Bank v. Walker, could not be. In that case, however, [576] one of the two principal grounds of the defence, was the fact that the defendant or drawer of the note, was an accommodation drawer; but in this case, the circumstance of the defendant having drawn the note for the accommodation of the endorser, was not at all material to the defence set up, but given as the reason or inducement which the endorser had for making the arrangement with the plaintiff, which was offered to be proved, in order to procure a discharge of the defendant from the payment of the note. It is again objected that the endorser was interested in the event of the suit; because the defendant’s having drawn the note for his, the endorser’s, accommodation would have entitled the defendant, in case of a recovery had against him, to have claimed and recovered from the endorser, all the costs paid in pursuance of such recovery; which liability the endorser would avoid, if admitted by his evidence to establish a defence for the defendant. But the release tendered removed this objection: and as to the amount of the note, the endorser would still remain liable to the payment of it, let the result in this action be what it may; so that in regard to this, he must be considered indifferent. The judgment must therefore be reversed, and a venire de novo awarded. Judgment reversed; and a venire de novo awarded.