Commercial Bank v. Ross

By the Court. (Booth, C. J., Warner and Way, Justices.) The principal question is whether the defendant can give evidence of the want or failure of consideration of this note. The counsel for the defendant have contended that the Statute 3 & 4 Anne, c. 9, does not extend to this state. They appear to admit that if it does there is an end of the question. It is not necessary for us to decide whether that Statute is or is not in force here, but we will observe that any statute like it may be extended by practice and decisions of the courts. The Statute, 11 Geo. II, c. 19, about use and occupation has never been extended by any legislative act, yet it is acted under and is undoubtedly in force. All declarations or promissory notes are in conformity with the Statute, 3 & 4 Anne. We conceive that our Act is very different from the Pennsylvania Act. Our Act does not authorize the defendant in suit by indorsee to go into evidence of equitable circumstances between him and the payee. In England in actions by the payee against the maker, the want or failure of consideration may be gone into, but it is other — 602 — wise if the suit be brought by the indorsee, for he takes it on the credit of the maker. If fraud or illegality of consideration were alleged, the question would be different. We are satisfied that the authorities read by the defendant’s, counsel are by no means repugnant to what we now declare to be the law. It ought to be remembered that the Pennsylvania courts possess an equity jurisdiction. The defendant cannot show want of consideration. We believe that even our Act of Assembly would not support him in doing so; for instead of operating in favor of trade and commerce as expressed in the preamble, it would destroy them. Brinckle. We wish to be distinctly understood by the Court.. We have not admitted that, if the Statute, 3 & 4 Anne, has been extended to this state, there is an end of the question. On the contrary, we made it one of our points and contended that if that Statute were in force here, still on proving that the plaintiff had notice of the want of consideration at the time the note was. discounted, we should be entitled to set up the defense; and such we contended is the law in England at this day. We wish the Court to determine this point. [By the] Court. This note is drawn “without defalcation,”' negotiable at the Commercial Bank of Delaware and payable at. the said bank in Milford; that puts it on a footing with notes in England under the Statute, 3 & 4 Anne, c. 9. We will permit you. to show collusion between the indorsee and the plaintiff, or actual fraud and notice of that, but not notice of a mere want or failure of consideration. Defendant’s counsel prayed and had leave to draw up a bill of exceptions: First, because the Court permitted plaintiff’s, counsel to cross-examine defendant’s witnesses before the examination of him in chief was concluded. Second, because the-consideration paid by the plaintiff to Douglass was not sufficiently proved. Third, because the defendant was not permitted to-prove want of consideration between him and payee and notice of that fact to the plaintiff. The Court and counsel for plaintiff were desirous that the jury should render a verdict and be discharged immediately, but. defendant’s counsel, apprehending that there might be some difficulty about the bill of exceptions, insisted that the jury should be-kept in attendance until the bill should be drawn and sealed by the Court. [By the] Court. We will adjourn to three o’clock in the afternoon. In the meantime the exceptions can be put in form. — 603 — At the meeting of the Court in the afternoon (Tuesday, the 11th May) a bill of exceptions was tendered to the Court. [By the] Court. This bill states that the defendant offered to prove so and so. It ought not to state the allegations of the party as to what he can prove, but what he has proved. It ought to set forth facts. Defendant’s counsel. We have stated facts; we have set forth what we have offered to prove, and what the Court has refused to permit us to prove; and if the Court does not think proper to seal our bill, we proffer ourselves ready to go to trial and to make out the defense as we there state it. We certainly will not consent to go into the High Court of Errors and Appeals upon a bill of exceptions stating in the abstract that it was the opinion of the Court that “in a suit brought by indorsee against the maker on a promissory note, the defendant cannot go into evidence of want of consideration between him and payee, though indorsee has notice.” That Court would say to us.we do not sit to decide abstract questions of law — you have not shown how the principle has any relation or connection with your case. The Supreme Court of the United States so said in a similar case and refused to decide the question. Hamilton v. Russel, 1 Cranch 310, Basse v„ Smith, 6 Cranch 233. Besides, we have admitted that in the case of accommodation notes the principle does not apply, and how would it appear to the superior court that this was not an accommodation note. [By the] Court. We cannot seal this bill as it now stands. Perhaps the counsel may be able to agree upon some form that will be acceptable to both parties and to the Court; and the cause can stand over until tomorrow for that purpose. The next morning, Wednesday, [May] 12th, Mr. Hall informed the Court that the plaintiff was willing to go to trial and would consent that the defendant might give evidence to prove his defense, if he could. And the trial went on. The following question arose in the course of the trial. Douglass, the indorser, and one Adams were proved to have been directors at the time when the note was discounted. Defendant’s counsel asked one of the witnesses whether Adams had ever told him that Douglass was present when the note was discounted and gave the directors any and what information respecting the note. — 604 — Hall. The declarations of Adams are not evidence against the plaintiff; besides Adams has been summoned as a witness by the defendant and is now in court and may be examined. Defendant’s counsel. Adams was one of the agents of the bank for discounting notes, and his declarations respecting any act of discounting is evidence against his principal. Meade v. McDowell, 5 Binn. 197, 199, 2 Vern. 574, 13 Ves.Jr. 120. Our having summoned Adams and his presence in court are altogether immaterial. If the defendant should succeed in his defense, the directors who discounted the note, and Adams among the rest, would be answerable to the bank for misconduct. It will therefore be the interest of Adams to defeat our defense. Booth, C. J. It has been settled in the High Court of Errors and Appeals that a witness is bound to answer a question which may show that he is liable to be charged in a civil action, and that such answer could not be given in evidence in any suit against him. [Defendant’s counsel.] Adams is a stockholder in the Commercial Bank of Delaware and therefore directly interested in the event of this suit. He gains or loses by the event and could not be compelled to give evidence for the defendant. ([Note.] 1 Morg.Ess. 279, 280.) Whether he would or would not refuse to be examined, we know not; nor is it material — the court will not compel us to examine him. The plaintiff has been making proof of the declarations of the defendant. He is present in court, why not examine him. By the Court. Adams has been summoned as a witness, he is in court, and it does not appear that he would refuse to be examined. Under these circumstances, we are of opinion that you cannot prove his declarations. The arguments before the jury were pretty much the same with the argument before the Court on the first and second days of the trial so far as the points of law were touched on. On Thursday, the 13th May, the Court charged the jury as follows. Booth, C. J. The defense set up is that the note was given without consideration, and that the plaintiff had notice of or knew it, and that the indorsement was fraudulent on the part of the — 605 — plaintiff. The jury will consider the evidence and determine whether the bank had notice. The Court do not consider that notice to one or two directors is in point of law equivalent to notice to the plaintiff. Suppose, however, full notice to the bank. As between payee and drawer consideration may be inquired into. But where a note has been indorsed over, and the indorsee has paid full consideration to the indorser, notice is immaterial. It is otherwise, however, if the note be indorsed after it has fallen due. This opinion is not repugnant to any of the authorities. It is not necessary to examine the difference between ours and the Pennsylvania Act, though it is certain there is a material difference. The counsel for the defendant admit that if this were an accommodation note, their defense would not be good, because in them the party agrees to be bound. So in this case the defendant agreed that he would pay the money without defalcation. It was the understanding and agreement of the parties that the money should be paid to the bank as appears upon the face of the note. The bank paid Douglass a full consideration for the note, and the defendant should not now be permitted to set up this defense. If the jury should be of opinion that there was fraud in the case, that would be a good defense, and they should find a verdict for the defendant. We are not disposed to controvert the principle that the jury have a right to judge both of law and fact. But the jury will admit that they are as much bound by the laws of the land as any other individuals, and we presume they will be guided by the opinion of the Court. Verdict for defendant. Hall moved for and obtained a rule to show cause why the verdict should not be set aside and a new trial granted. On Friday, 14th May, Brinckle showed cause. A new trial ought to be granted to attain real justice, but not upon every point of summum jus to give a second chance to a hard action, Farewell v. Chappey, 1 Burr. 54. This is to say at least a hard action. Mr. Douglass is a director of the bank. He received the money from the bank. He has not ever been sued on the note, though this suit has been depending four years. The probability is that all the directors knew of the want of consideration — in — 606 — -deed had we been permitted to prove the declarations of Adams, they would have gone far to prove the fact. Booth, C. J. We had come to this determination to permit you to prove his declarations, if on being called he should refuse to testify. [Brincklei] We did not wish to examine a witness so deeply interested in the event of this suit as he was. It is not alleged that the money could [or] could not be recovered of Mr. Douglass. He is certainly liable to the bank and well able to pay the money. The defendant has never received from any person one cent of ■consideration for this note. Under these circumstances, we conceive that this is not only a hard action but a case — if a defendant be at all liable — of summum jus, of extreme right, and not to be favored by the Court. Hall. This is a plain case; the verdict is against both law and ■evidence and ought to be set aside. By the Court. Let the verdict be set aside and a new trial ■granted. Brinckle. We are entitled to the costs. Where a new trial is granted for the error or mistake of the jury, either in finding a verdict without or contrary to evidence, it is always upon payment of the costs of the former trial, 2 Tidd Pr. 823, 2 Burr. 665, 1 Burr. 12,1 Str. 642. In the case of Harper and Harper v. Bailey in this Court, new trial was granted on payment of costs on ground of misconduct in a juryman, at May Term, 1802. In the case of Reynolds v. Moore and Smith in this Court, the verdict was against law and evidence, new trial was granted at May Term, 1807 on payment of costs. In the case of the Lessee of •Comegys and Baker v. Dawson and Brinckle, also in this Court, the Court directed a nonsuit; the plaintiff refused to submit and ■got a verdict; a new trial was granted at May Term, 1803, but it was on payment of costs. This last case is much stronger than the present, and in the case of Pierce v. Patterson at October Term, 1815, the Supreme Court went so far as to say that they strongly inclined to the opinion that the party applying for the new trial should in every case pay costs. Hall. In the last cited case of Pierce v. Patterson it is true the Supreme Court did make use of the expression which has been mentioned; but the case being mentioned the next day, the Chief Justice took occasion to say that on more mature reflection he doubted very much the propriety of the rule mentioned in that case respecting the granting of cost on new trials. In England there seems to be a difference when the verdict is contrary — 607 — to evidence simply, and where it is contrary to law and the judge’s direction; in the former case costs are given, and in the latter they are not, 2 Tidd Pr. 823. Booth, C. J. Where the jury render a verdict simply against evidence, costs are given on granting new trial, but where the verdict is contrary to the direction of the Court, costs are not given. Way, J., is, however, of opinion that plaintiff should pay the costs in this case, and to prevent the cause being hung up on this point, I consent that the rule be made absolute on the payment of the costs of the term. And the Court ordered the attendance of several witnesses who had not been examined to be allowed, on the allegation of defendant’s counsel that it would have been unsafe for his client to have gone to trial without having them in attendance. (De Benneville v. De Benneville, 1 Binn. 46. Commonwealth v. Wood, 3 Binn. 414.)