Kennon v. M'Rea

COLLIER, C. J. — 1. The release of Fuller, the endor-ccr of the defendant in error, did not operate a discharge of any previous party to the note. Every endorsement of a paper is a new and substantive contract, and the liability of each endorser, as it respects the holder, is separate and distinct from the others. Hence, a prior endorser, who has paid a note, cannot call upon a suf sequent party for contribution, but can only look to those whose names are previous to his own. Fuller, then, being in r,o event liable to the plaintiff in error, it must be immaterial to the plaintiff, whether the defendant re'ease him or not. The cases of a release from a joint and several liability, or of a prior endorser, rest upon entirely different grounds, and consequently, do net conflict with the position we have laid down. 2. It is certainly the duty of the judge, to determine all questions of law which may arise in the progress of a trial, and if, instead of determining himself, a point raised, he refers it to the jury, it is error, — if the party complaining-, could be injured by such reference. Here, it is'true, the judge of the county court submitted it to the jury to decide whether there was a material alteration in two of the endorsements on the note, when ho should have determined the question of materiality himself, and'only have submitted it to them to ascertain whether the alteration was made. In regard to the first alteration alleged, to wit, the insertion of these words, “ to William Kennon,” in an endorsement originally as foi181 lows: I endorse the within note, for value received ; .this 6th of May, 1825.” Signed — “ Alexander Shaw it can only be regarded as the filling up of a blank endorsement. And it is clearly competent for the holder of paper endorsed in blank, to insert the name of an endorsee—Snee vs Prescott, 1 Atk. 249; Ord vs Portal, 3 Camp. 240; Chitty on Bills, 134, 5, 6; Byles on Bills, 85, 6; Smith’s Mer. Law, 128; Bank of Utica vs Smith, 18 Johns. R. 230; Josselin vs Ames, 3 Mass. R. 274; Tyler vs Binney, 7 ibid, 479; Hungerford vs Thompson, Kirby’s R. 393; Snyder vs Satterlee, et al, Penn. R. 89; Lovell vs Everton, 11 Johns. R. 52; see also 1 Caine’s R.. 271. In respect to' the second alteration insisted on, in striking from Fuller’s endorsement to the defendant, the words “ without recourse,” whatever influence it may have upon the liability of Fuller, cannot divest the defendant of the right to maintain an action against any previous party to the note. While a material alteration would destroy the cndorsei’s undertaking to pay, yet as the endorsement shews that the legal title has been transferred, the endorsee stands in the place of his endorser, and may sue all persons who were chargable to him. Now, although the judge of the county court should have decided upon the legal effect of the alterations, the plaintiff cannot assign his refusal to do so, for error; because the alterations were perfectly unimportant., and consequently, the plaintiff could not have been prejudiced, but might be benefited ; as the charge could not have induced the jury to find against him, hut might cause them to And in his favor. But had the defendant have been unsuccessful below, it would have been competent for — 182 — him to insist upon the refusal of the judge to instruct the jury, that the alterations were such as did not prejudice his right to recover; for the reason, that the jury, under the influence of such a charge as'was given, might have found their verdict against him. 3. The charge of the judge, upon the fourth and fifth ii stsuct.ons, asked for by the plaintiff in error, it is believed, dees not harmonise with the law. The charge is as follows: That' as the parties all lived in the neighborhood, and lenew the situation of the maker of the note, and the assignment was made sometime after the note was clue, that a promise to pay before or after the suit was brought, would bind the party, if the jury should believe from the evidence, the promise was made.” This direction, we think calculated to embarrass, and probably to mislead the jury, by assuming the contiguity of the residence of the parties to the paper to each other, and their acquaintance with the situation.of the maker of the note, and laying a stress on these facts, as exerting an influence over their rights. Cut we need not consider it in that light; .for it is dearly objectionable in combining both law and fai t, and thus forestalling the inquiries of the jury upon the evidence, instead of referring it to them (o ascertain the facts proved. It is true, that the consequences of a neglect to make a demand of the maker or drawer of a note or bill, and give notice to an endorser or drawer, may be waived by the. person authorised to take advantage of it, by a promise to pay, or an acknowledgment of a liability to pay—Vaughan vs Fuller, 2 Strange, 1246; Horford vs Wilson, 1 Taunt. 12; Lundie vs Robertson, 7 East, 231; Brett vs — 183 — Levett, 13 East, 213; Wood vs Brown, 1 Starkie, 217; Hopes vs Alder, 6 East, 16; Whitaker vs Morris, 1 Esp. N. P. 60; Rogers vs Stephens, 2 T. R. 713; Dixon vs Ellison, 5 C. & P. 437; Margetson vs Aitken, 3 C. & P. 333; Gibbon vs Coggon, 2 Camp. 188; Greenway vs Hindley, 4 Camp. 52; Hodge vs Fillis, 3 Camp. 463; Potter vs Rayworth, 13 East, 417; Wilks vs Jacks, Peake, 202; Walker vs Laverty, 6 Munf. R. 487; Hall vs Freeman, 2 Nott & McC. 479; Fortheringham vs Price’s ex’or, 1 Bay’s R. 291; Laurence vs Ralston, 3 Bibb’s P. 102; Ladd vs Kenney, 2 N. Hamp. R. 340; Hopkins vs Liswell, 12 Mass. R. 52; May vs Coffin, 4 Mass. R. 341; Duryee vs Dennison, 5 Johns. R. 248; Miller vs Hackley, 5 Johns. R. 375. In Jones & Mann vs Savage, 6 Wend. R. 658, it. was determined, “ That a subsequent promise to pay is a waiver of the want of notice, in cases only where the promiso was made with a full knowledge of the fact, that due notice had not been given, and that knowledge is not to he inferred from the promise itself, but it must affirmatively appear, that the party knew be had not received regular notice; otherwise, the presumption'is, that the promise was made under a belief that regular notice was given, inasmuch as such notice need not be personal”-See also Trimble vs Thorn, 16 Johns. R. 154. This decision, not only holds it to be 'necessary for a plaintiff to prove the promise, but requires him to go farther, and shew that it was made under such circumstances as make it effectual in law. To that extent, wo think the case cannot be sustained. The rule, we understand to be this; If a promise or acknowledgment be — 184 — made under a misapprehension of fact; as — if under an' impression, that a demand was made of the maker of a note, or that a notice was regularly sent through the post office, — an endorser promise payment or acknowledge his liability, the consequence of laches is not waived—Goodall vs Dolley, 1 T. R. 712; Blessard vs Hurst, 5 Burr’s R. 2672; Williams vs Bartholomew, 1 Bos. & Pul. 236; Stevens vs Lynch, 2 Camp. 333; and Pickin vs Graham, 1 Cr. & Mee. 728. But a promise or acknowledgment will entirely dispense with proof of presentment or notice, and will throw on the defendant the double burthen of proving laches, and that he was ignorant of it-Taylor vs Jones, 2 Camp. 105; Stevens vs Lynch, 12 East, 38; Nash vs Harrington, 1 Aik. R. 39. So, the promise or acknowledgment must be such as shews that the endorser assumes a liability, or admits it to bo continuing. If conditional, the performance of the terms of the condition must be proved, before the promise or acknowledgment becomes absolute—Dennis vs Morris, 3 Esp. N. P. 158; Cumming vs French, 2 Camp. 106, n.; Standage vs Creighton, 5 C. & P. 406; Bonodaile vs Lowe, 4 Taunt. 93. And it will make no difference that a promise or acknowledgment were made under a misapprehension of the law, for every man must be taken to know the law; otherwise, a premium is held out to ignorance, and there is no telling to what extent this excuso might be carried—Bilbie vs Lumley, 2 East, 469. The fact, that the note was over-due when negotiated, did not dispense with a demand and notice. It is the duty of an endorsee to demand payment of the maker, — 185 — within a reasonable time after the transfer to him of paper, ancl if refused, to give notice of non-payment to the endorser. The undertaking of the endorser is made upon these conditions, and unless they are performed, it cannot become absolute, so as to entitle the holder to his action against him; — and, in this respect, there is no difference between paper endorsed before, and after it is due—Ecfertvs De Coudres, 1 Rep. Cons. Ct. 69; Rugely vs Davidson, 2 Rep. Cons. Ct. 33; Poole vs Tolleson, 1 McC. R. 199; Course vs Shackleford, 2 Nott & McC. 283; Aldis, et al, vs Johnson, 1 Vermont R. 136; Dwight vs Emerson, 2 N. Hamp. R. 159; Bishop vs Dexter, 2 Conn. R. 419; Berry vs Robinson, 9 Johns. R. 121. If the plaintiff show a sufficient promise or acknowledgment, he cannot be deprived of its benefit, because it may appear to have been made after suit brought; for the reason, that it is supposed the plaintiff had a good cause of action, of which the promise or acknowledgment furnishes but evidence; or if there was no cause of action, when it was commenced, the defendant, for proper reasons, has admitted it, by waiving his defence—Hopley vs Dufresne, 15 East R. 275. Whether the facts that excuse demand and notice, can be proved under a declaration, in the usual form, against an endorser, has been sometimes questioned. But the practice of declaring, in such cases, with an occasional decision approving it, and maintaining the waiver to be equivalent to a demand and notice, in our opinion, affords sufficient authority to warrant the admission of these facts in evidence under such a declaration, without putting the plaintiff to declare specially upon the promise — ' — 186 — See Smith’s Mer. Law, note m, 149; Norton vs Lewis, 2 Conn. R. 478. It was not -objected in the County court, that a promise or acknowledgment made to Fuller, would not inure to the defendant in error ; yet, as it is possible the question may be made upon another trial, it may be proper to remark, that if a promise or acknowledgment is made to the holder of endorsed paper, — any party to it, who afterwards takes it up, may avail himself of such promise or acknowledgment, and maintain an action against the party making it—Potter vs Rayworth, 13 East, 417; Brahan & Atwood vs Ragland, et al, 3 Stew. R. 247. And this,upon the ground that by the payment of anote by an endorser, he is remitted to all the rights of the holder against the previous parties. So, the holder, it would seem, stands in the same situation as an endorser, and is entitled to the remedies upon the endorsements which he would have, were he to take up the paper. Instead of stating the law to be, that a promise to pay would bind the plaintiff in error, the judge of the County court should have instructed the jury, that they must be satisfied, from the evidence, that he either promised to pay, or acknowledged that he was liable to pay the note endorsed by7 him, with a knowledge of the facts, as they really existed. The jury were authorised to determine from the circumstances under which the conversation took place between Fuller and the plaintiff, and the language employed, not only whether there was a promise, but whether it was made under a misapprehension of fact. But their inquiries were restricted to the promise alone, and a consideration of the — 187 — circumstances under which it was made, entirely exclu-dai. In thus limiting the duty of the jury, the charge of the judge is erroneous. The judgment of the County court is consequently reversed, and the cause remanded.