Good v. Martin , 2 Colo. 218 ( 1873 )

Hallett, C. J.

On a former appeal, we considered the facts presented in this case with reference to the rule announced in Rey v. Simpson, 22 How. 341, as to the liability of one who becomes a party to negotiable paper by indorsing it in blank, before it had passed from the hands of the maker. 1 Col. 165. It is now urged that we have gone beyond the authority of the principal case, in saying, that, in the absence of evidence to show the intention of the parties, the indorser may be charged upon such an indorsement as a maker of the note jointly with the parties whose names appear upon the face of the instrument. In Rey v. Simpson, it is true that it was alleged in the declaration, that the indorsement was made for the purpose of guaranteeing the payment of the note and of becoming surety to the payee for the same, and this was admitted by the demurrer. But if this statement had been omitted from the declaration, it is believed that the principle would be the same. Without such an averment, the case would stand upon the allegation that the indorsement was made while the note was in the hands of the maker, and before delivery to the payee, and with nothing to show what was the purpose of the indorsement, excepting the mere fact that the party had written his name upon the back of the note, that purpose must be made out. The case then presented is of one who has not received any portion of the consideration of the note, and who, by his signature, has manifested a disposition to become a party to it, but has not declared, except by his signature, in what character he will be bound. In such case it is necessary that the law should declare the intention with which the signature was affixed, for if this were left to the jury, there could be no certain rule governing his liability. One jury might find that he was not liable as maker, and another, that he was not liable as guarantor, and a third, that he was not liable as indorser, and thus, by successive juries, he would be absolved from all liability. If, then, the law is to supply the purpose and intention with which the indorsement was made, it can only be said, that it was for the credit and accommodation of the maker of the note, and this, for the reason that there is as yet no other party to the instrument. The payee not having received the note, it cannot be claimed that the indorsement is for his accommodation, and there is, in fact, no one but the maker who can receive any benefit from it. According to the practice in Minnesota, from whence Rey v. Simpson was removed, the purpose of the indorsement was properly set forth in the declaration, but such an allegation would find no place in a common-law pleading. The evidence to support the allegation upon issue of fact joined is said to be the circumstances under which the signature was placed upon the back of the note. If this evidence goes no further than to show that the signature was put upon the note in the hands of the maker, I cannot doubt the sufficiency of it. The law will then impute to the indorser, a purpose to accommodate and give credit to the maker, because this is the most reasonable interpretation of his act. In common-law pleadings, as before stated, the intention is not alleged, but it is quite as much in issue, and the same effect will be given to the evidence of the circumstances under which the indorsement was made. Whether the pleadings be in one form or another, the object is to ascertain the intention of the party in signing his name, and if there is no distinct expression of intention, the law must interpret the act, for the purpose of ascertaining it. I conceive, therefore, that the views expressed upon this point on the first appeal may be maintained upon the principle recognized in Rey v. Simpson, and the charge of the court to the jury, enforcing those views, is entirely correct. It was not claimed upon the trial, or in the charge to the jury, that appellant participated in the consideration of the note, and it seems to have been conceded that he did not. If appellant’s liability had been put upon the ground that he shared in the consideration, evidence to disprove the fact must have been received from him, but this was not the theory upon which the case was tried. The fact which he offered to prove was not in issue, and in the view which was taken of the case, did not affect his liability. He was to be charged as a surety if at all, and the offer was to show that he was not a principal. The argument is that non-participation in the consideration is a circumstance from which the j ury might judge of appellant’s liability, and so it is as to the question whether he is principal or surety. But whether he is to be charged as maker, indorser, or guarantor of the note, that circumstance will not explain, and therefore it was rightly rejected. It appears by the evidence that the note in suit was given in renewal of another note, executed by the same parties, and in the same manner as this one, in pursuance of an agreement to that effect. Upon this state of facts the charge of the court that appellant’s liability upon the old note would measure his liability upon the -new one, was based, and upon that point it was entirely correct. This was, however, followed by the further statement that there was no evidence in the case from which the jury could infer that appellant5 s liability upon the old note was that of a joint maker, a proposition which was not accepted by the jury. The testimony is, that the new note was to be executed by the same parties, and in the same manner, as the old one, and, so far as we can learn, this was done. If the parties pursued the same course in making the new note which had been adopted in making the old one, the jury, being informed as to one, were equally well informed as to the other. The new note was found to have been executed in a manner to charge appellant as maker, and if the old note was executed in the same manner, his liability upon that was of the same character. The charge of the court was, therefore, too favorable to defendant, and the jury have drawn a correct conclusion from the evidence in opposition to it. The evidence upon this point is entirely harmonious, and the misdirection could not have prejudiced appellant upon the trial. Error has not been alleged upon this instruction, but as to the finding of the jury, and these remarks are directed to the point last named. Objection is also made to that portion of the instructions in which the jury are told that appellant might be charged upon evidence that the note was given in part discharge of a previous indebtedness of the three defendants, upon the ground that there is no evidence to which it can be referred. The only evidence of prior indebtedness of the three defendants was the original note of the parties which was taken up at the time the note in suit was given, and this the jury were informed, in the third instruction, was not sufficient to fix upon appellant the liability of maker. Connecting these portions of the charge they served to inform the jury that the original note was not evidence of prior indebtedness upon which appellant could be bound as maker of the note in suit, and this, if not useful to the jury, was certainly not misleading.

The remaining question to be considered relates to the competency of Shepherd, one of the defendants, who had suffered judgment to pass against him, as a witness upon trial of the issue against appellant. As this cause was at issue before the act of 1870, by which the parties in a suit are admitted as witnesses therein, was passed, it is conceded that the provisions of that act cannot control, and the case must be governed by the common-law rule as modified by the act of 1872, which provides that a judgment may be taken against one of several joint defendants in an action upon contract. It is said that the interest of Shepherd, in the result of the suit, was determined by the default; for, by the act of 1872, judgment would go against him, although appellant should succeed upon the issue of fact. It is to be observed that the amount of damages to be assessed against Cheney and Shepherd was to be determined by the jury which tried the issue joined by appellant, and as to that matter Shepherd was certainly not competent to testify. Bowman v. Noyes, 12 N. H. 302. According to some authorities he was competent to testify to any fact which would go to the discharge of appellant alone, but he was not offered as a witness to prove any such matter. The record states that he was called as a witness further to maintain the issue on the part of appellant, and the plea being the general issue, the question of damages in which Shepherd was directly interested, and most other defenses in the action of assumpsit, was provable under it. It is true that the note determined the amount of damages, but for aught that appears the intention may have been to prove payment, or accord and satisfaction, which was admissible under the general issue, and which would diminish the amount to be recovered from Shepherd himself, as well as the other defendants. Without, however, discussing this view of the question at length, it is sufficient to say that in the courts of the United States the parties to a suit were forbidden to testify therein on the ground of public policy, and not because they were interested in the result of the suit. In those courts, according to the old rule which has recently been changed by statute, a party to the record could not testify, although divested of all interest in the suit. Bridges v. Armour, 5 How. 94. This is decisive of the questionpresented both as to Cheney and Shepherd, and renders any reference to decisions of State courts unnecessary. The points in the assignment of errors number thirty-three, in all of which those only to which I have referred have been mentioned in the argument. To go through with all of these points, and beyond those which counsel have deemed worthy of attention, would be tedious and unprofitable.

The judgment of the district court is affirmed, with costs.

Affirmed.