Daggett v. Whiting

Park, J. -On the trial of this case in the court below the defendant offered parol testimony to prove, and claimed thereby to liaveproved, that Judson, the plaintiff’s intestate, knew at the.time he received the checks that they were given by the [371] defendant to Baldwin without consideration and upon Baldwin’s agreement to take care of them and save the defendant harmless thereon, and that he made at the' time an express agreement with Baldwin that he would look to Baldwin only for payment and would not present them at all to the bank nor call upon the defendant for payment, and that Baldwin should pay Judson one per cent, per month on the amount of the checks as consideration for this agreement on his part. During the argument of the case the counsel for the defendant requested the court to charge the jury that if the checks were accommodation checks given under the circumstances claimed by the defendant, and if Baldwin then and for many months after Judson received them was able to indemnify Whiting against them, and if he would in fact have so indemnified him in case he had been compelled to pay them during that time, and-if Judson knowing these facts agreed with Baldwin not tó present them for payment and carried out that agreement by keeping the checks until Bald•win failed and became unable to indemnify Whiting, the verdict must be for the defendant. The court did not so charge the jury, and the question is, did the court err in omitting so to do ? The question of daw raised by this request is based-upon the facts connected with the delivery of the checks by the defendant to Baldwin and the reception of them by Judson. These facts are stated in the request substantially as follows: That if the jury should find that Judson knew at the time he received the checks that they. had been given by the defendant to Baldwin without consideration, and upon Baldwin’s special agreement to take care of the same and save the defendant harmless thereon, and that Judson in view of these facts made an exp'ress agreement with Baldwin, on which he received the checks, that he would look only to him for payment ; the plaintiff cannot recover. It is true the defendant’s request contains other facts for the jury to find, to wit, that Baldwin at the time -lie received the checks was able to indemnify the defendant, and would have done so at any time during several months thereafter, if [372] the defendant had been compelled to pay them; and that Judson carried out his agreement with' Baldwin by keeping the checks until Baldwin failed, and became unable to indemnify the defendant. These facts are not important in connection with this question of law. But it appears by the charge of the court that the truth of them was not in dispute between the parties. If they had been in controversy they only prejudiced the defendant’s case, because his request is on condition that the jury shall find them to be true. They were doubtless inserted to make stronger to some extent the important facts connected with them. But their insertion could not prejudice the plaintiff in any view of the case. If the request is good without them, and ought to have been complied with, it is good with them, for the jury are required to find, not only enough to defeat the plaintiff’s cause, but more than enough. The question then is, can the plaintiff recover the amount of these checks if Judson knew at the time he received them that they were accommodation checks, and that they had never been delivered by the defendant to Baldwin as binding obligations upon him, but were delivered for a special purpose only; and if Judson, in view of these facts, expressly agreed with Baldwin that he would look only to him for payment. Upon such a state of facts it is difficult to see on what principle of law the defendant can be bound. In the case of Brush v. Scribner, 11 Conn., 388, the court say: — “That want of consideration as between the parties to negotiable paper may be shown, is well settled; and the same rule exists, where such paper comes into the hands of a third person, who was apprised of that fact. So when 'negotiable paper is made for a particular object, as when it is endorsed for a specific purpose, the endorser lending his name to accommodate the maker, as to renew another note, and the maker applies it to a different purpose to the prejudice of the endorser, and this is known to the person receiving it, he shall stand upon no better ground than the fraudulent assignor.” Story, in his treat ies on Bills of Exchange, sec. 187, after stating that as a [373] general rule a want of consideration of a bill of exchange may be shown as a defense between the immediate parties to the bill says, (in speaking of this defense : ) — “ It will also apply to all cases where the party takes the bill, even for value, after it has been dishonored, or is overdue ; for then he takes it subject to all the equities which properly attach thereto between the antecedent parties. So if he has notice at the. time when he purchases it, that the bill is void in the hands of the party from whom he purchased it, either from fraud, or want or failure or illegality of consideration, he will take it subject to the same equities as that party. ” The law upon this subject is not left in doubt by the authorities. Bailey on Bills, 512; Armory v. Merryweather, 2 Barn. & Cress., 573; Evans v. Kymer, 1 Barn. & Adol., 528 ; Kasson v. Smith, 8 Wend., 487; Skilding v. Warren, 15 Johns., 270 ; Harrisburg Bank v. Meyer, 6 Serg. & Rawle, 537; Chitty on Bills, 92, 93, 115, 116 ; Steers v. Lashley, 6 T. R., 61. Now in this case, if the facts are as stated in the request, Judson not only knew that the checks were given to Baldwin without consideration, but in view of that fact he expressly agreed to take them on Baldwin’s promise alone to pay them, and without the responsibility of the defendant. How then can the plaintiff recover ? Again, if the facts are as stated in the request, the checks were delivered to Baldwin for a particular purpose, and not as binding obligations of tlie defendant. Baldwin had no right to negotiate them as the checks of the defendant given in the usual course of business. It would be a fraud on him to do so. This was well known to Judson when he received them, and in view of the fact he made the contract stated in reference to them. This is sufficient to defeat the plaintiffs recovery. But it is said that parol evidence is inadmissible to prove that Judson agreed with Baldwin not to hold the defendant responsible for the checks, as it tends to vary the terms of the written contracts signed by the defendant. But the agreement does not vary the terms of the written contracts any [374] more than a deposit of the cheeks in the hands of Judson for safe keeping, or a pledge of them as collateral security for a sum loaned would do. It merely shows what property Judson had in the checks, on what terms he took them, and the character of his holding of them. It is further said that if Judson had agreed that the defendant should not be bound in any event for the amount of the checks he would never have taken them. This would be important in an argument to the jury upon the question whether the defendant made the agreement; but we have nothing to do with that question. We advise the Superior Court to grant anew trial. In this opinion the other judges concurred.