Renwick v. Williams

Mason, J., delivered the opinion of the court. This action was instituted by the appellant, to recover the amount of a promissory note for two thousand dollars, drawn by the testatrix of the appellees, in favor of William Chase Barney, and by him endorsed, after it was due, to the said appellant. The note, its execution and endorsement were established, and upon these facts the plaintiff rested his case. The first-question which was raised in the trial below, related to the competency of the witness Mrs. Mary Barney, who was offered upon the part of the defendants. She was objected to on the ground of interest. It was assumed in argument by the appellant’s counsel, that Mrs. Barney was the daughter of Mrs. Hannah K. Chase, and as such was a distributee of her estate, and was therefore interested in the result of any suit, which like the present, might diminish the assets of the estate. It seems to have escaped the notice of the counsel on both sides of this case, that it no where appears in the record that the witness whose testimony is objected to, was the daughter of Mrs. Chase. It is true that the witness states that she is the mother of William Chase Barney, and that he is the grandson of Mrs. Chase, but from these two facts it does not necessarily follow that Mrs Barney was the daughter of Mrs. Chase. Non constat, but Mrs. Barney’s husband may have been the son of Mrs. Chase. This-court cannotlook beyond the record to conjecture facts, and where a witness is objected to, upon the ground of interest, that fact-must affirmatively and distinctly appear in the record, otherwise this-court cannot assume it. In this view of the particular question before us, it becomes unnecessary to decide upon the regularity of the exception as to this point. The first ground- of objection raised by the appellant to the [363] defendants’ prayers, related to the insufficiency of the proof to establish the facts assumed in them. We will not pause to consider this much vexed question in the present case, for admitting that the proof out of which the two preceding questions arose was free from objection, and was sufficient to establish the facts sought to be proved, namely, that this was an accommodation note, and that it was endorsed to the plaintiff after it fell due, still, the existence of those facts would not avail to defeat the present action. It is true, as a general rule, that in all cases where a note over-due is endorsed, the endorsee takes it subject to all the equities of the maker, and it is always competent for the defendant in such cases, whether as against the payee or holder, to prove either a want or failure of consideration. Wyman vs. Gray, 7 Har. & John., 415. But it appears that accommodation notes, as they are termed, constitute an exception to this rule. Cases of the highest authority recognise a wide distinction between accommodation notes or bills, and those which are wholly without consideration or fraudulent, and as such nudum pactum in law. Some of the cases go to the length of asserting, that though the holder of a note claiming by virtue of an endorsement made after the same was due, knew, when he received it, that it was an accommodation paper, still such a fact would not defeat his right to recover against the maker. In the present case it is not pretended that the plaintiff knew the character of the note when he received it. We cite the following authorities in support of the foregoing propositions: Charles vs. Marsden, 1 Taunt., 224. Sturtevant vs. Ford, 4 M. & G., 101. (43 Eng. C. L. Rep.) Lazarus vs. Cowie, 3 A. & E., 464. (43 Eng. C. L. Rep., 822.) 63 Eng. C. L. Rep., 144. (11 A. & E.) 7 John. Rep., 361. 7 Wend., 227. Byles on Bills, 122. Story on Prom. Notes, sec. 194. The case of Wyman vs. Gray, does not conflict with the doctrines advanced in this opinion. In the first place that was not an accommodation note, and therefore cannot be assimilated to the present case. Nor does the language of the court [364] embrace this case. The “equity of the maker” there spoken of, could not include such a defence as the one relied on in the present case. After the defendant .had given her note - to accommodate the payee, by enabling him to raise money, or what is the same to pay debts, and in pursuance of the very purposes which the maker designed the note should accomplish when she issued it, it falls into the hands of a bona fide endorsee for value, would it be equitable and proper for her to set up those facts to evade the payment of the note? Nor is the question varied by the note being over-due when endorsed. The books suggest this manifestly wise and proper course for the maker .to pursue in such cases, if he wishes to terminate the obligation he has assumed, and that is, to call in his note, and thus to prevent it from passing into the hands of innocent holders. “A promissory note is certainly negotiable, as well after, as before it becomes due,” this court have said in Annan vs. Houck, 4 Gill, 331. Why then should an accommodation note not be negotiable as well after as before it fell" due? The only defences against which an endorsee has to guard in accepting over-due bills, are first, those which have arisen since the execution of the note, and which are not collateral, but which relate to the note itself; and secondly those which are inherent in the note, and which would show it to have been void ab initio, such as fraud, mistake, absence of a sufficient consideration, &c. The defence urged in this cas.e comes under neither of those heads. If this note had been negotiated before it fell due, it is conceded that the fact that it was an accommodation note, would not have been an available defence, therefore that fact cannot be regarded as an incipient, original defect. Certainly the objection did not arise since the execution of the note, for it is now what it was designed to be when it was originally made. The correction of the record as to the date of the note, renders it unnecessary to express ahy opinion on the question of limitations. Judgment reversed and procedendo awarded.