Jordan v. Garnett , 3 Ala. 610 ( 1842 )

ORMOND, J.

The questions of law, arising on the pleadings and -evidence ii> t'his- case must' be determined by the character of the contract on- which-the action is founded — the indorsement of the defendant.

The facts of the-case are, that Stil well, for whose use this suit is brought, sold'to1 the defendant six "slaves, and received from him- in part payment a note, for one thousand and eighty dollars,- made by> one Ridgeway, to the plaintiff. The’ rióte was not due-, at'the time, nor indorsed by the plaintiff*-but-was at the time of tire transfer indorsed by the defendant, in-blank. What was the liability; contracted by the defendant* by his in-dorsement? The defendant’s 'counsel, "maintains that he was liable-only-as-an indorser under the statute, of paper, not mercantile, whilst the plaintiffs counsel contends, that by the endorsement, he became either maker of the note-or guarantor.

Previous to the passage-of the act of 1828, endorsers of notes and bonds,- were liable on their indorsements upon the- principles »" of the law merchant, but-this law being thought unsuited to ■ that portion of our community, not engaged in commerce, the -act-referred- ró* was passed, by which’it was-provided, that the remedy on bilis.-of exchange and -promissory-motes, payable in bank, should be governed by the rules -of the law merchant* The-12th section then proceeds, “all other contracts-in writing for the payment-of money -or property,- or performance of any duty, of whatever nature, shall be assignable, as heretofore, and the assignee may maintain-such suit thereon as the obligee or payee-could have done, whether it be debt, covenantor as-sumpsit : Provided, suit be brought to the first Court of the-county where the maker resides, to which*, suit can- bo-bro'ught, and-if he shall fail to sue- the maker :to the-first Court as herein provided for, - the- indorser shall be discharged” &c. Aiken’s Dig. 329.

It is perfectly clear, that the design of the .Legislature in-the passage of this -act-,' was •‘merely' to simplify the remedy against indorsers of paper, not mercantile in its character, or payable in bank. This appears, not only from the language of the act, its obvious scope and design, but is expjessly.s@»stated in -the preamble. The- intention was to provide for those cases-of indorsements of paper, not mercantile in its character; where without the provisions-of the act, the endorser would be liable to be sued, on demand'-of the maker and notice of non-payment. But in this case, if the-act just cited; had never passed, the in-dorser. would not have- been liable, according to the rules’of the'law merchant, asif the indorsement had been regularly-made; it is therefore, neither-within the letter or the scope and design-of the statute ofl828;nor does-it come within the mischief intended to be’ prevented.

What then was; the obligation created by the indorsement of the name of the defendant on-.tbis note? We must presume •that the parties intended something by the act, otherwise, the note would have been handed over> to- Stilwell-, in the condition it was. Thabthe defendant•BM^rfot-inten^to bind -himself as maker of the note, cannot-be supposed- H-ád-such been-his intention, he would-doubtless- have written -his name at-the proper place to indicate such intention;- nor is it more probable that Stilwelk would-have-permitted him-to write his name on the back of the note, as evidence of his liability as maker; Neither is it a fair inference, that the indorsement was intended as a mere guaranty that-the note would be paid-at maturity; such would not 'have been the effect of a regular assignment of the paper; and we cannot, in the absence of proof; presume that the parties-contemplated ’ a greater liability than would be created by a regular assignment, if the title had been in the assignór.

. But as the defendant certainly intended to bind' himself to some extent, we think his undertaking -was an affirmation or warranty that the-note when due, could- be collected by due diligence from the maker, and this, we unde.rtand, was the liability, at .common law, in- cases like this, as is satisfactorily shewn in -the case of Mackie’s executors v. Davis, 2 Wash. 219.

The Legislature of Virginia, had- passed an act declari ng dioses in action assignable, and vesting the legal title in the assignee. The case cited, was ike first attempt to recover of -the assignor, suit having been brought against the- maker of the note by the assignee, and the money not made. Tbe Court •held, that the-assignee could maintain the action, not us a. consequence of the act authorising the assignee to sue in his own name, but upon common law principles. That the assignment of the note imported a debt, and as by the statute the assignee had authority to sue iq his own name, it was his duty to bring suit against the maker. That the object of the law authorising the assignee to sue in his own name, was not intended to defeat the common law remedy, but merely to give the assignee a right which he had not at common law.

In Bradley v. Phelps, 2 Root’s Rep. 325, in a case like the present, the Supreme Court of Connecticut, maintained the doctrine here laid down, and again explicitly affirmed it in the cases of Huntington v. Harvey, 4 Conn. 124, and Wilton v. Scott, ib. 527. The case cited by the plaintiffs counsel from 6 Conn. 315, does not at all militate against the principle here advanced. There, as in this- ©ase, the indorsement was irregular and blank, and the question before the Court, was not what the blank indorsement, unexplained imported, but whether it was not admissible to show by parol, what the contract of the parties really was; and it was held that such proof was admissible.

The cases referred to by the counsel for the plaintiff in error from New York and Massachusetts, do certainly, many of them, sustain the principle contended for by him. It is to be observed, however, that the statute of Anne, is in force in both of these States, and the decisions are founded on the supposed intention of the party, to enter into some contract, respecting the note on which the indorsement is found, as the irregular indorsement could ■ not operate to charge the person making it as indorser; to prevent it from being entirely inoperative, they held it an agreement to be bound as maker pr guarantor, according to the exigency of the case.

However proper such an inference may be in those States, for the reason given, we are satisfied that in this State, where a regular assignment of paper, not mercantile, imports a con-conditional-liability only, to hold that an irregular assignment would create an absolute, or a larger liability, without proof that such was the intention of the parties, would in the large majority of cases, if not in all, be in direct contravention of the contract, the parties supposed they had made. ■

Our opinion, therefore, is that an irregular indorsement like this, on paper not mercantile, is not provided for by the act of 1828; that the 'liability thereby created is, that the assignor is liable to pay the debt, if by the use of proper diligence it cannot be obtained from the maker. What would constitute such diligence, would be a question of fact for the, jury, under all the circumstances of the case. In Virginia and Connecticut, it has been held that if no valid excuse exists, the maker must be sued to the first Court after the maturity of the note; and as such is the requisition of our statute, where the assignment is regular, such would doubtless be the proper rule here, unless some valid reason, such as the insolvency of the maker, excused it.

Such being the law of the contract between the parties, we come now to consider it in reference to the pleadings, the second, third, fourth and fifth counts having been demurred to.— These counts are all substantially defective.

The second is framed on the supposition that one who is privy to the consideration, and endorses the note at the time it is made, thereby becomes a co-maker. If that were conceded to be the law, it appears from the count itself, that the note was not indorsed at the time it was made, but at a subsequent time; nor is there any averment connecting the indorser with the consideration of the note or the original parties to it. ' The third is founded on the-supposition that the contract evidenced by the indorsement, was an absolute undertaking to pay the note.

The fourth, charges that by the indorsement, the defendant became liable to pay the amount of the note to Stilwell. From this it appears that the legal title or right of action is not in the plaintiffs, but in Stilwell, for whose use the suit is brought.

The fifth, charges the lhaking of the note, -and the endorsement by the defendants, and alleges that the defendants thereby guaranteed the payment of the note at its maturity; that the maker did not, on demand, pay the note a tits maturity, but was then, and is now, insolvent, of which the defendant had notice, &c.

From this brief review, it appears that all the counts were framed on a mistaken view of the contract between the parties, and do not show any legal liability on the part of the defendant. ■ .

Upon the trial of the issues in fact, the Court correctly excluded the note and endorsement from the jury. It was not ev - idence under the first couut, which charged ttbe defendant as ■ maker of the note,- for the reasons-’already given;;mor was- it evidence under the common counts, because it imported no legal liability to the plaintiff in this action.- ■ It is not necessary to examine the charges of the Court, because no matter how -erroneous they might be; they could -not-prejudice the plaintiff in this action. "' ■ - - .

The judgment is therefore -affimredi ■■