Russell v. Buck

The opinion of the court was delivered by Bennett, J. Under the charge of the court, the jury must have found that the defendant, at the time of giving the guaranty, had no knowledge of the existence of the facts, which would have defeated an action against the indorsers of the note. But it is said, in argument, that he was bound to give the plaintiff timely notice, after he was advised of the facts, of his intention to avoid- the contract, and that, not having so done, it amounts to a waiver of that matter [157] of defence. Is this so ? The law never requires a useless act to be performed. In the case of forged paper, and where the effect of the delay would be to give an extended credit, there may be some good reason for requiring notice. The party may wish to look further, and to charge others. But" the defendant’s contract has been adjudged to be a conditional one, and that the plaintiff was bound to use reasonable diligence to collect the note of the makers, before he could resort to the defendant on his guaranty. 11 Vt. R. 166. He could not have been induced to alter his course by not having such notice. Whether Buck & Bailey were indebted to the Gibsons, at the time this guaranty was given, or not, can have no effect. There is no pretence that this entered into, and became a part of, the consideration of the defendant’s contract and cannot be drawn in to aid in sustaining it. It has been said that the charge of the court was wrong in regard to the consideration of this contract, in making it dependant upon the fact whether this defendant was bound as an indorser or not, and it is insisted that it might have been given in settlement of a doubtful claim. To this it is a sufficient answer, that this is not the consideration set forth in the declaration, and there is no evidence tending to prove such a consideration, so as to call upon the court for any such charge. It is well settled that any defence, available against the payee of a negotiable note, may be set up against the holders of it, unless it has been bona fide passed “while currant in the due course of trade.” In the state of New York, it seems to be settled that, when a negotiable note is passed by the payee, in payment, or as security, of a precedent debt, the holder does not receive it “ in due course of trade,” but that it must be received on account of a debt contracted at the time. Coddington v. Bay, 20 Johns. Rep. 651. Payne v. Cutter, 13 Wend. R. 605. Rosa v. Brotherson, 10 Wend. 85. Wendell et al v. Howell, 9 Wend. 170. This was a transaction in the state of New York, and mnstbe governed by their decisions, even though we might differ from them. We see no reason why the case now before us should form an exception to the rule established in New York. The plaintiff [158] made no advance upon the note. His remedy against the Gibsons for his debt was not cancelled nor postponed by means of the fraud practised upon him, in passing to him a fraudulent security, and the result must be that Buck could not be chargeable as indorser of the note to the present holder. The court having, on a previous hearing, decided that the contract declared upon is conditional, the question cannot be considered open. ■ Though the bill of exceptions presents other questions, yet, as they are not relied upon, it is sufficient to say we discover no error in the proceedings of the county court, and their judgment is affirmed.