Sheffield & Co. v. Parmlee

GOLDTHWAITE, J.- 1. It is our uniform course to construe the charge of a court in connection with the evidence before it, and the questions raised. In the court below there w'as a discrepancy in the testimony of two of the witnesses, with respect to the person by whom .the bill was taken from the bank ; one of them asserting it was taken up by the plaintiff at the solicitation of St. John & Co. and the other stating the same act as performed by a member of that firm. It is not easy to perceive what difference there could be in the result, whether the plaintiff furnished St. John & Co. with the money, for them to take up the bill, or whether he took it up with his own money at their solicitation, if he was to hold the bill for his security, as the condition of his advancing the money. However this may be, it is evident the instructions to the jury were given in view of these different statements ; and although the charge assumes a broader ground than is covered by the evidence, yet that is no reason for reversal, if, as given, it is free from legal objection. It assumes, that if the bill was paid by St. John & Co. with their own funds, and afterwards transferred to the plaintiff, he was entitled to recover upon the legal effect of the evidence before the jury. If the question as to the consideration and bonafides of the transfer of the bill to the plaintiff, had been expressly raised before the jury, the testimony before them, if believed, was certainly sufficient to warrant the conclusion, that the full sum was paid by the plaintiff. One of the witnesses states the circumstances under which [895] the plaintiff became the holder of the bill. St. John & Co. were unable to take it up, without making greater sacrifices than they were willing to do ; but induced the plaintiff to take it up for them. The inference that he paid or lent-them the monejr, is entirely legitimate ; the more especially, as á single question to the witness, if the matter was otherwise, would have removed the difficulty, or elicited the necessary explanation. If the charge had been asked directly upon the effect of this evidence, the case would then be within the influence of the rule laid down in Carson v. The State Bank, 4 Ala. Rep. 151, and Hearing v. Smith, Ib. 431. Many more cases to the same effect might be cited if necessary, but these, as settling the rule in this court, are quite sufficient. This conclusion relieves us from any further examination of the position, that no consideration for the transfer is shown by the evidence; but it is proper to add to what has already been said, that we do not decide the question, how far a defence of this nature could be insisted on without a special, plea, asserting the transfer to be colorable, and insisting on the set off against the indorser. 2. The questions before us are thus narrowed to the consideration passing to Sheffield &Co. for their indorsement of the bill; and the set off insisted upon by them against St. John & Co. As to the first, it is asserted that no consideration passed, and the proposition is advanced, that when a bill is transferred after its maturity, the holder can maintain no action upon it, when his immediate indorser cannot maintain one. If this proposition is understood as confined to the original validity of the bill, or of the indorsement, independent of any defence arising out of other transactions, it is unnecessary to controvert it; because we think that is not the condition of this case. The bill, indorsed by Sheffield & Co., then debtors to the house in Augusta, was transmitted to St. John & Co. with instructions to credit them in account. This firm indorsed the bill, procured it to be discounted, placed the proceeds to the credit of Sheffield & Co. and advised them of the facts. Here the money went directly to the use of Sheffield & Co. and there seems to us no grounds whatever for the pre-tence that the indorsement was without consideration. If St. John & Co. were now suing on it, and these facts were shown, could their right to recover be gainsayed, independent of the set off? [896] 3. The other, however, is the material question, and it seems to be concluded by other decisions of this court. It will be remembered that we have two distinct classes of paper, the one negotiable, or rather assignable merely, by virtue of our statutes; and the other negotiable at the common law, Independent of our general statute allowing sets off of mutual debts, that which renders promissory notes assignable,provides that the defendant shall be allowed the benefit of all payments, discounts, and sets off possessed against the same, previous to notice of the assignment. In Stocking v. Toulmin, 3 S. & P. 35, this statute was held not to let in the right of set off against an intermediate holder of a note, whether he derived his title by assignment or otherwise; and the evils supposed likely to arise out of a different construction are fully considered. In Robinson v. Breedlove, 7 Porter, 543, a similar question arose, but in relation to a note payable to bearer, which previous decisions had held to be negotiable without the aid of the statute. We then conformed to what seems to be the unquestioned rule of the English courts ; and, in analogy with the previous decision of Stocking v. Toulmin, held that the fact of becoming the holder of a negotiable instrument, after its maturity, did not subject the holder to a set off against the payee. Even if we were now dissatisfied with these decisions, it is too late to correct them, as they have long furnished a guide to the commercial transactions of the State. It is conceived, however, they are well sustained by the weight of authority, as well as by the reasons on which they are based. In England, as before observed, the rule never has been seriously questioned. [Burroughs v. Moss, 10 B. & C. 558.] It obtains in Connecticut, New Hampshire, Vermont, New Jersey, and South Carolina; Robinson v. Lyman, 10 Conn. 30; Stedman v. Jelleund, Ib. 55: Chandler v. Drew, 6 N. H. 469; 11 Verm. 70; 2 Bailey, 298; 1 Hill S. C. 1; Bank v. Hann, 3 Harrison.] In Massachusetts a different practice prevails, (Sargent v. Southgate, 5 Pick. 312,) induced, it is said, by a liberal construction of her statute of set off. [Ranger v. Cary, 1 Metc. 369.] In New York, the earlier decisions seem to have been adverse to the rnle adopted by us; (see the cases cited in Bridges v. Johnson, 5 Wend. 342;) but these were departed from in Johnson v. Bridges, 6 Cowen, 693,which decision was afterwards affirmed on a divided court of errors. [See Bridges v. Johnson, before cited.] The legislature then in [897] terposed, and restored by statute the previously recognized rule. It is highly probable the same subject has received the consideration of the courts in other States, but we have confined our examination chiefly to the cases cited, considering this point as controlled by our previous decisions. The result of our examination of the record, is the affirmance of the judgment.