Firman v. Blood

By the Gowrt, Kingman, J. Eirman brought suit on a note of which the following is a copy: “ $500.00. Three months after date, I promise to pay to the order of Charles H. Branscomb five hundred dollars with interest at the rate of thíee per cent, per month, until paid. Yalue received. “Lawrence, July 1, 1858. James Blood.” "Which note was endorsed as follows: “ Abraham Wilder. Robert Morrow. Pay to J. S. Ballentine or bearer, without recourse to me, Chas. H. Branscomb. Pay to Lorenzo Eirman, J. S. Balentine.” The amended petition contains the usual averments of a suit on a note, and also that the defendants, Morrow and "Wilder, at the time and place of the execution of the noté wrote their names upon the back of the note in blank. That Branscomb, the • payee of the note, was the duly authorized agent of the plaintiff. That the money for which the note was given belonged to the plaintiff, who alone was beneficially interested therein, and that Balentine, to whom Branscomb assigned the note, was an agent of plaintiff, and received it as such and transferred it to plaintiff. Plaintiff — 523 — claims-judgment against all the defendants in error as joint makers of the note. The amended answer of defendants contained a general • denial, and also set up a particular defense, substantially that Morrow and Wilder endorsed their names upon the note after the money had been received by Blood, and after the note had been delivered to Branscomb, and without any consideration passing to Morrow and Wilder from any person whomsoever. That Blood, when he received the money from Branscomb, had no knowledge of Branscomb’s agency, but dealt with him throughout as principal, believing him to be such, and that on the 7th day of August Blood paid Branscomb $175, and received his duebill therefor, under a special agreement then made with Branscomb, that the money so paid by Blood and received by Branscomb, was to be applied as a payment on said note. That on the 1st day of September, 1858, Branscomb was further indebted to Blood in the sum of $101.17, for which Branscomb gave his duebill. That this sum was for goods, money, &e., and that it was understood and agreed between BransGomb and Blood, when the goods and money were advanced, that they were to go as a payment on the note sued on. All the time Blood, as well as the other defendants, believing that Branscomb was acting for himself, having no knowledge of his agency. That on the 29th of October, 1859, Blood offered to confess judgment for the amount of the note less the sums above mentioned, as having been paid. On these pleadings the parties went to trial, and a verdict was rendered for the defendants, and the plaintiff brings the case to. this Court, claiming that the Court erred in giving and refusing instructions to the jury. The counsel for the defendant in error raises two preliminary questions which are to be disposed of before considering the main propositions. It appears that the instructions asked for by the parties, — 524 — •Were not requested or given until after the argument of counsel on both sides was concluded. It is insisted that the plaintiff by not asking his instructions before the argument of the case, waived his privilege as a matter of right that the Court should pass upon the instructions requested. This seeins to be a reasonable conclusion from subdivision five of Sec. 277 of the Code, whieh provides that “when the evidence is concluded, either party may request instructions to the jury, which shall be 1 given or refused by the Court.” We think, under the section of the Code, a part of which is j'ust quoted, that if a party as a matter of right desires the Court to pass upon any proposition of law pertinent to ■the issue and the evidence, that he must prefer his request before the argument. But it does not seem tó us that the defendant in this case is in a position to raise the question. The ' Court did not decline to pass upon the required instructions. The Court passed upon both, granting those asked by defendant and refusing those asked by plaintiff. If the Court had declined to pass upon the propositions embodied in the instructions, on the ground that the application was made too late, we do not think that this Court would decide that such an exercise of its discretion would be error. The Court did pass upon them. As much those offered by plaintiff as those offered by defendants. And if it did pass it was bound to give the law correctly. Another objection of defendant in error is that the record does not show enough of the evidence for this Court to pass upon the law of the case, to show whether the instructions asked, even if law, were, pertinent to the evidence offered. We think otherwise. It appears that the plaintiff offered evidence tending to prove his case, and rested, and the defendants, offered evidence tending to • prove their defense and rested, This when the claim and defense are set out in the pleadings as fully as in this case, we- think sufficient to “ explain the exceptions,” and this is all that the Code or good practice requires. — 525 — The Court at the instance of defendant charged the jury substantially, that Morrow and Wilder were liable upon the note in controversy, if at all, simply as commercial endorsers, and that they cannot be charged with payment unless the note had been protested and notice of non-payment given to them according to law. This character of endorser cannot be changed except by agreement at the time of signing, on which further or other liability is assigned. The Court in this instruction evidently was governed in its view of the law by the late decisions in New York reported in Ellis v. Brown, (6 Barb., 287,) and Spies v. Gilmore, (1 New York Rep.,) and Hall v. Newcomb, (7 Hill, 416.) These cases all tend to support the principle laid down in the instruction, that persons, strangers to the note, by endorsing it at the time it is made, only become liable as second endorsers. Those curious to see the reasoning by which the legal fiction of making a party who is not the holder or owner of the note capable of passing the title to the note, can examine the cases referred to. The doctrine is an innovation upon the earlier rulings of that State, and is not sustained by any authorities elsewhere within our reach. Nor do we think the doctrine is any better sustained by reason than by authority. By writing his name upon the back of a note a person can not pass the note to the payee. That becomes his from another cause—the consideration for which the debt was created of which thenote is the evidence. The note is delivered to the payee with the person’s name upon it, and it is then complete so far as the endorser is concerned, whatever obligation he has incurred it is to the payee and not to a subsequent endorser. By giving the note with his name upon it to the payee, he authorizes the payee to write over his signature whatever is consistent with the understanding of the parties. To write over it an endorsement is to make the paper meaningless in the hands of the payee and binds them to nothing and gives the payee no benefit from the signature on — 526 — the back of the note. The note in this case must be held as complete, and perfect when delivered to Branscomb. Whatever liability Wilder and Morrow incurred at any time, was fully established when the note was delivered with their names on it. In Ohio in the case of Greenough v. Smead, (3 Ohio. S., 416,) the Court lays down this principle, “That such a construction should be placed upon the contract as will prevent its failure, and will give effect to the obligation of each of the parties appearing upon it, at the moment the contract itself takes effect.” This seems a safe and reasonable rule of construction, and one wholly disregarded in the New York cases cited. This leads to the conclusion that the instruction given in this case in the Court below was erroneous, and the case will have to be sent back on that account. On the trial the plaintiff requested the Court to instruct the jury, that “if they believe that Morrow and Wilder endorsed the note in controversy at or before the time it was delivered to Branscomb, or in pursuance of an arrangement made by Blood and Branscomb'when the money was loaned, then in either case Morrow and Wilder are liable as joint makers.” The principle embraced in. this instruction is one recognized in Massachusetts and most of the New England States, and also in Missouri. The cases are referred to and ably examined in the case of “ Union Bank of Weymouth, (8 Met., 504, and Lewis v. Harvey, (18 Mo., 16) It will be seen by these cases that a stranger byplacing his name on the back of a note at the time it is made is presumed, in .the absence of proof, to be an original promissor. While in Ohio and many other States, such a party, in the absence of proof, is presumed to be a guarantor. {See Greenough v. Smead, 3 Ohio, 416; Riggs v. Waldo, 2 Cal., 485; 13 Ills., 228; 4 Watts, 448; 1 Speneer, 256.) “ The difference is this; in Massachusetts he is presumed to be an original promissor; in Ohio he is presum — 527 — ed to be a guarantor, but in either State parole evidence is received to rebut the presumption and show what liability it was intended he should assume, and what relation he should sustain to the paper.” Greenough v. Smead. The contrariety of decisions makes it a perplexing and somewhat vexed question. We think the rule making him by presumption a guarantor, while it is equally supported by authority as that making him an original promissor, is more in conformity with reason and the general understanding of business men. It would not be the first impression of any man that one placing his name on the back of a note thereby becomes primarily liable. If all the parties to the note intended this, why not sign the note on its face in the usual way in which such obligations are perfected ? The payee of such a note looks only to the signatures on the back of the note as sureties, and the law does all that can be required of it when it gives effect to the intention of the parties at the moment the instrument takes effect and becomes operative. If the note is designed for the payee, then he cannot be held as endorser. He is a stranger to the note. He must be held either as an original promissor or guarantor! Nor does the subsequent assignment of the note change the responsibility of the parties boundi Whatever character they receive when the note is completed, is not changed by the transfer. Holding then5 that in settling this question for the first time, it is well to follow those decisions that seem best to interpret the original understanding of the parties, we think in the absence of proof, Wilder and Morrow should be held as guarantors. On the point raised as to the propriety of the instructions. given and refused on the matter of payment, we must, in the condition of the record take the facts set up in the answer on that point as true, and in that view w.e think there was no error in the- ruling of the Court below; but — 528 — for the misdirection of the Court as to the liability of Morrow and Wilder the cause is reversed and a new trial directed. Bailet, J., concurring, Cobb, C. J., having been of counsel in. the case below, did not sit in the case.