Woodman v. Eastman

Parker, C. J. This case comes before us somewhat irregularly, as the counsel are aware. It is competent for the parties in any case, if they think proper, to agree upon the facts, and submit the case thereupon to the decision of the court. But the court cannot be required to take the evidence in a case, determine what is admissible, and to what part objections may exist on account of the interest of the witnesses, and then ascertain the facts of the case, from the testimony which has been submitted. But the case having come up in this shape, we have not thought it expedient to delay the parties by sending it back without examination, and have considered the matters involved in it, so far as they appear to be necessary to a decision, on this evidence. A protest, duly authenticated, is the regular evidence of the dishonor of a foreign bill. And a bill drawn in one of the United States, payable in another, has been held to — 364 — be a foreign bill. See cases cited in Carter vs. Burley, (9 N. H. Rep. 566.) It has been said that every indorsement of a bill may be considered as a new bill drawn by the indorser on the acceptor. The indorsement of a promissory note has an operation somewhat similar; but the questionwÍMÜier the dishonor of a promissory note, executed in ANHB by a person residing there, made payable to an inhabitlireof another state, and by him indorsed, is to be proved, or may be proved, in the same manner a< the dishonor of a foreign bill, need not be settled here. This matter was partially considered in Carter vs. Burley, and several authorities examined. Assuming that a protest is not essential to prove the dishonor of an indorsed promissory note, and that there was due evidence of a demand and notice in this case ; it appears from the deposition of Averill, the maker, if that is admissible in evidence, that after the note became due the plaintiff received from him a note and a draft, the note being taken in part payment — that he agreed that the draft, when paid, should be in satisfaction of this note — that the draft had ninety days to run, and the plaintiff agreed not to sue this note, or attempt to collect it, until after the draft fell due. Such agreement would operate to discharge the defendent as indorser, even if there had been before that time a regular demand and notice. 16 Johns. R. 70, Hubbly vs. Brown; 2 Starkie’s Ev. 289, and cases cited in note. It is objected that the testimony of Averill is inadmissible, because he has an interest, as maker of the note ; and there is something in the opinion of Mr. Justice Jackson, in Pierce vs. Butler, 14 Mass. R. 312, cited for the defendant, which seems to sustain this objection. But we do not perceive the grounds upon which it is to be maintained. The maker is not liable for the costs of an action in favor of the indorsee against the indorser. 9 Johns. R. 131, Simpson vs. Griffin; 3 Wend. R. 416, Williams vs. Walbridge; 10 Wend. R. 93, Boyd vs. Brotherson. It is otherwise in the case of an ac365 eommodation note, which was the character of the paper hi Pierce vs. Butler. 14 Mass. R. 312 ; 4 Day's R. 108, Cowles vs. Wilcox; 16 Johns. 70. If the plaintiff recovers in this case, the maker will be liable to the defendant for the amount of the note. The same result would be attained if the plaintiff should hand the note back to the defendant, without any recowHB^I the plaintiff fails, or if he should dismiss his suit, tmPmaker is equally liable to him. If, then, the maker is not liable for the costs, he can have no interest, being equally liable to either party. The authorities seem fully to show that the maker has no interest to exclude him from being a witness in a suit in favor of the indorsee against the indorser. 2 Stark. Ev. 299; Roscoe's Ev. 177; Bayley on Bills 373; and cases cited. Nor is the evidence of Averill exceptionable because it goes to prove an agreement which is not contained in the written receipt, or agreement, signed by the plaintiff, when he received the note and draft, on the 25th of August. So far as it shows an agreement for delay, it does not contradict any thing in that instrument, but is entirely consistent with it. But if it had contradicted it, the defendant would not be precluded, by any writing between the plaintiff and Averill, from proving all the terms of the agreement. The rule that evidence cannot be admitted to contradict or add to the terms of a written instrument, has no application to third persons who are not parties to the written agreement. We are of opinion, therefore, that Averill’s evidence is admissible, and that the agreement, which he states, operates to discharge the defendant from his liability as indorser. But the plaintiff contends that if there was an agreement for delay, that might have such an operation ; the defendant is liable upon a new promise, made subsequently. There is no doubt that the defendant might waive his right to avail himself of a discharge of that character. And a new consideration would not be necessary for that purpose. If, having full knowledge of the circumstances upon which he — 366 — might claim his discharge, he saw fit, notwithstanding, to make an express promise to pay the note, that promise would be a waiver of a right to set up the defence, and would bind him. In order to sustain himself upon this ground, the plaintiff must show that the defendant has made a ncwuromise, and that this was done with a full knowledge of the facts which show that he was discharged. 7 N. H. Rep. 271, Farrington vs. Brown, and auth. cited; Carter vs. Burley, 9 N.H. Rep. 572. Upon the case made before us, the plaintiff fails in both these particulars. It does not appear that the defendant made a promise to pay. There is evidence of what was said by him, at the time when he procured the mortgage from the plaintiff ⅛ brother, from which a jury might perhaps infer a promise to pay. But the court cannot draw that inference ; and the fact that it was subsequent to the commencement of this suit need not, therefore, be considered. If the promise had been established, the fact that the defendant had knowledge of the agreement, stated by A veril!, no where appears. He knew that the plaintiff had received the note, and draft, and had given the receipt ; and he knew the terms of the receipt, and the stipulation contained in it; but the agreement to delay the collection is not there. That was a verbal agreement. The defendant spoke of the receipt as something which would discharge the note, but not of the agreement for delay. On the supposition, however, that there is, in the testimony, sufficient matter to be submitted to a jury, and on which they might find that he had knowledge of the agreement, as well as of the receipt; the court cannot find that fact, or draw such an inference from what appears in the case. If that was relied on, and there is evidence which might be submitted to a jury, for that purpose, the case should have been put to the jury. It might admit of some doubt whether the evidence of what the defendant said, in January, 1837, could have been submitted to a jury, as matter upon — 367 — which they were authorized to find that the defendant had knowledge of the agreement for delay at that time ; but connected with the facts, that he received his knowledge of the receipt from Averill, and that he has since taken Averill’s deposition to prove the agreement upon which he now relies for a discharge, the evidence might perhaps have been submitted to them. It is further contended, on the part of the plaintiff, that the defendant, having taken a mortgage from Averill to secure the note, is liable for that reason; and is not entitled to recprire evidence of demand and notice. Whether the counsel would contend that this furnishes an answer to the agreement for delay, AverilPs deposition being admitted as competent proof, has not been very distinctly stated. The abstract in Mead vs. Small, 3 Greenl. R. 207, cited for the defendant, is, “ If the endorser of a note has protected himself from eventual loss, by taking collateral security of the maker, it is a waiver of his legal right to require proof of a demand upon the maker and a notice to himself.” The opinion seems to sustain this ground : hut the fact that the indorser, if compelled to pay, will not suffer loss, can hardly modify or control the ordinary legal rights or liabilities of the parties, arising from the indorsement. Possibly the indorser might, in equity, be so far regarded as a surety, that the creditor would be entitled to the benefit of the security, 1 Story’s Eq. 481; 11 Ves. R. 22. An indorser of a note, who holds a mortgage for its security, unless there is at the time of the indorsement, or after-wards, some other evidence of waiver, seems to have the same right to be exonerated by the neglect of the holder, as any other indorser. In such case, if there was but one note secured by the mortgage, the indorsee would either be entitled to the benefit of the mortgage, upon the ground that it passed as an incident; or the mortgage would be destroyed by the transfer of the note, and the holder would have a right to attach the land. If there were other demands secured by — 368 — the mortgage, and retained by the mortgagee, it might be different, but that could not change the nature of the case. If, by the indorsement, the note was so separated from the mortgage that the latter was no longer a security, the indor-see might attach the equity of redemption. In either case, there would be nothing to show that it was within the contemplation of the parties that the right to require demand and notice should be waived, and of course nothing to show even an implied agreement to that effect. Upon examining the statement of the case in Mead vs. Small, some facts appear which might have influenced the decision. At the time of the indorsement, it was agreed between the indorser and indorsee, the note being not then pa}r-able, that the indorsee should hold the note, and receive payment in labor; that the maker should not be sued, he having no personal property liable to attachment ; but if he could not pay the note, it should be returned to the indorser, who held the mortgage of the maker’s real estate, as collate! \ and sufficient security for the amount. The case, Bond vs. Farnham, 5 Mass. R. 170, was different. There, it would seem, after the indorsement, the in-dorser took an assignment of all the property of the maker, to secure himself against his indorsements. The court held, although he had not received sufficient to indemnify him against other indorsements, that it was a waiver of a right to require a demand and notice, because he knew such a demand must be fruitless. He should not, it was said, “ insist on a fruitless demand upon the maker, or on a useless notice to himself, to avoid payment of demands, which on receiving security he had undertaken to pay.” If this doctrine may be considered sound, it is evident that it has no application to this case. But, further, there is evidence tending to show that the mortgage was transferred to the plaintiff, and that the defendant afterwards got possession of it improperly. If the security that the defendant had taken was transferred to the — 369 — plaintiff, the exception, if it might otherwise avail, would fail for that reason. If the defendant has since obtained it improperly, the plaintiff has his remedy. We have taken no notice of the fact, that the plaintiff sold the note and draft received of Averill, and obtained the money for them. It does not appear that he has since been held liable on his indorsement of the draft, which fell due since this action was commenced. If he has not, the note would seem to be fully paid, and a defence might be sustained on that ground. Judgment for the defendant.