Clancy v. McEnery

By the Court, Cole, J. The counsel upon both sides agree upon the correctness of the proposition, “ that a person who takes a bill or note after it is due, takes it subject to all ob jections in respect to want of consideration or illegality, and all other objections and equities affecting the instrument itself, and to which it was liable in the hands of the person from whom he takes it.” It appears to me that this principle of law is entirely fatal to this action. For it is alleged, in substance, in the complaint, that McEnery indorsed the Hall note merely for the purpose of enabling Olancy to collect that note in his own name, but that such indorsement was made because he had been named the payee therein by mistake, and was without [179] any consideration, and that it was distinctly understood between those parties that no liability was incurred thereby. It is very clear then that Olancy could never have maintained an action against McEnery upon that indorsement. This must be conceded to be the true relation between the parties up to the time the note was transferred. It appears from the complaint, that when the note became due, Olancy, the holder, presented it to the maters for payment, and it not being paid, he caused it to be protested, and notice of dishonor was given McEnery. This was certainly a very idle ceremony, and did not change the rights of liabilities of the parties. Eor if McEnery was not liable to Olancy on his indorsement before the protest, it is very apparent he was not after-wards. The note was transferred after maturity, and of course was subject to all equities between McEnery and Olancy. But it is alleged in the complaint that McEnery became obliged to pay this note in the hands of some person to whom it had been transferred after maturity. This was certainly impossible. Eor Olancy could not have maintained an action against Mc-Enery upon his indorsement, and-it is an admitted proposition that a party taking a note already due, takes it subject to every defense existing against it in the hands of the holder when it became due. McEnery, then, could not have been under any legal obligation to pay the note to any party. And although he did pay, yet clearly such payment was entirely gratuitous, and gives him no right of action against Olancy. “Eor the law does not permit one, by voluntarily performing a service or expending money for another, to make that other his debtor.” Webb vs. Cole, 20 N. H., 490; Ellsworth vs. Brewer, 11 Pick., 316; Bachellor vs. Priest, 12 id., 399; Mackay vs. Holland, 4 Met., 69; Niles vs. Porter, 6 Blackf., 44; Ex'rs of White vs. White, 30 Vermont, 339; Kelley vs. Lindsey, 7 Gray, 287; Roscow vs. Hardy, 12 East, 434. It is claimed that the liability of the parties was in some way changed on account of the transfer of the note by Clancy. [180] But bow ? Most assuredly Olancy could sell the Hall note to any person who might be willing to purchase it. He was under ■no obligation to keep that note and himself collect it of the makers. He had not agreed to do this, and the law imposed upon him no such duty. But it is said that he had no right to negotiate the note as one upon which McEnery was liable by his indorsement, or to induce any one to take it upon the faith and credit of such indorsement. This may be a very true proposition both in point of law and morals, but what is the consequence if Clancy should negotiate the instrument under such circumstances ? The party upon whom he had perpetrated the fraud might sue and recover whatever damages he had sustained by such false representation. This we suppose would be the only result of that transaction. But how this would affect McEnery, or give him any greater or other rights than he would, otherwise have, we fail to understand. Suppose Clancy had informed all the parties to whom the note was transferred that there was no consideration for McEnery's in-dorsement to him, and that no liability was intended to be incurred on that indorsement? No one could then contend that McEnery had any ground of complaint. His relation to the note would have been fully understood by all the parties into whose h ands it might come. But the law charges every person taking a note past due with notice of all facts impeaching its validity in the hands of the holder when it became due. In other words, in this case the law charged every person into whose hands the note'came, with full notice of the fact that McEnerry indorsed the paper without consideration, and under circumstances which relieved him from all liability to pay it. So it was not possible for McEnery to be prejudiced by Clancy’s transferring the note with any representation as to his liability. And in every view, the position of the counsel for the plaintiff in error appears incontrovertible, that the facts stated in the complaint show that the payment of the note by Me181 Mnery was entirely voluntary, and gives him no right of action against Glancy. It follows from this that the judgment of the circuit court is reversed, and the cause remanded for further proceedings.