Gist v. Drakely , 2 Gill 330 ( 1844 )

Magruder, J.,

delivered the opinion of this court.

The Eutaw Company, by two instruments, to which its corporate seal was affixed, promised to pay “to the order of David Keener,” the sum of money expressed in each of them. On the back of these instruments, David Keener first, and afterwards Gist, (the original defendant in the court below,) wrote each of them his name. Before offering these sealed instruments in evidence, the blank that was left over their names, was filled up with these words. “For value received. We jointly and severally, promise David Drakely, to pay him the amount of the within writing obligatory, should the Eutaw Company, the obligees therein named, make default in the payment thereof, when the same shall become due.” Upon this, the present suit was brought.

The court below, at the instance of the appellee, instructed the jury, that he was entitled to recover in this suit, the amount of said bills, if the same were executed by the Eutaw Company, and endorsed by Keener and Gist, by an agreement with said Company, for the purpose of raising money thereon, or purchasing goods, with a view by said endorsement, of giving credit to said Company; and if they should find, that the defendant (in the court below,) undertook and agreed with said Company, to make such endorsement in consideration, that the said Company would give him a credit for the amount of said responsibilities thus assumed, upon a claim of said Company, against said Gist; and shall further find, that when said single bills became due, payment was demanded, and refused by said Company, and that notice thereof was given to said Gist, on the days shown by the protests in evidence, in this cause. Of this instruction the appellants complain.

Upon what grounds is it asked of us to say, that the court below erred in giving this instruction?

It was frequently assumed, in the course of the argument, that sealed instruments are the causes of action in this case, and authorities were cited to prove, that instruments of that description, if left blank, could not be filled up by the owner of them. But, this action is grounded not upon the promises of the Eutaw Company, which are to be found only in sealed instruments, but upon alleged written promises of the defendant, in the court below, to which there were no seals. Many of the cases therefore, with a reference to which, we have been furnished, afford us no information, with regard to the law of this case. Those alleged promises, although on the same piece of paper, may be collateral to, or distinct from, and no part of the obligations of the Eutaw Company.

Much stress was, in the course of the argument, laid upon the circumstance, that the obligations of the Eutaw Company, were not promissory notes, or negotiable paper; and it seemed to be conceded, that if they had been instruments of that description, the defendant in error, would have been entitled to recover; the authorities, however, would not appear to lead us to this conclusion. Chancellor Kent says, (3 Com.,p. 59, 1$£ edit.,) no other use can be made of a blank endorsement, on a note or bill of exchange, in filling it up, than to point out the person to whom the bill or note is to be paid. In the case of Moies vs. Bird, 11 Mass. Reports, 436, Justice Parker, pronouncing the opinion of the court, said : “Had the notes been made payable to him, and negotiable in its form, the plaintiff would have been restricted to such an engagement, written over the signature, as would conform to the nature of the instrument. In such case, the defendant would have been held as endorser, and in no other form, for such must be presumed to have been the intent of the parties to the instrument.” But this note was not made payable to the defendant, and was therefore, not negotiable by his endorsement. What then was the effect of his signature? It was to make him absolutely liable to pay the contents of the note. He puts his name upon a note, payable to another, in consequence of a purchase made by his brother, in a day or two after the bargain was made, knowing that he could not be considered in the light of a common endorser, and that he wras entitled to none of the privileges of that character. He leaves it to the holder of the note, to write any thing over his name, wdiich might be considered not to be inconsistent with the nature of the transaction. In Seabury vs. Hungerford, 2nd Hill’s N. Y. Rep. 80, the court say, “when a contract cannot be enforced, in the particular mode contemplated by the parties, the court, rather than to suffer the agreement to fail altogether, will, if possible, give effect to it in some other way.”

This is an attempt to charge the defendant with the amount due on two obligations; because of an endorsement thereon of his name in blank, and of course, the obligation is not, speaking technically, a negotiable instrument. Justice Story, in his able work on the law of promissory notes, page 587, speaking of notes, with the name endorsed in blank thereon, says, “these cases have been either, first, where the note was not negotiable, or second, where it was negotiable,” and then adds: “In the former class of cases, it has been held, that if the blank endorsement was made, at the same time as the note itself, the endorser ought to be held liable, as an original promisor or maker of the note, and that the payee is at liberty to write over the signature, ‘for value received, I undertake to pay the money within mentioned to B, ’ the payee.”

It is not the duty of this court to say, upon how much less proof, than was offered by him, the plaintiff, in' the court below, might have recovered the amount of his plaim. He might perhaps, have regarded this as a contract, like that spoken of by the Supreme Court of the United States, in the case of De Wolf against Rabaud and others, 1st Peters, 476, “a trilateral contract, each as an original promise, though the one may be deemed subsidiary, or secondary to the other, a credit not given solely to either, but to both; not as joint contractors, on the same contract, but as separate contractors, upon co-existing contracts, forming parts of the same general transaction.” It may be, that the plaintiff below, haight have filled up the blank somewhat differently, and thereby, have dispensed with the necessity of offering some of the proof which he adduced, but it is not perceived, that the blanks are filled up, otherwise than as the holder of the notes, was at liberty to fill them’up, or that the.defendants have any cause to complain of the insertion of any word, which, consistently with the nature of the transaction, might have been omitted.

Indeed, in order to sustain this decision of the court below, it is not necessary to rely on very modem decisions. The principles settled by the case of Russell vs. Langstaff, Doug. 514, and the various cases in the books, (see 2nd H. Blac. 298, note,) brought upon bills, payable to a fictitious payee, or order, would seem to be sufficient for our purpose. If in cases like those now spoken of, such objections to a recovery were over-ruled, it is difficult to come to a conclusion, that they can be fatal objections to a recovery in this suit. In the first case, (that in Douglass,) the defendant endorsed several notes, all of them at the time blank; that is, without any sum, date, or time of payment, mentioned in the notes. The defendant’s counsel, in the case, might well say, that by the signature, the defendant contracted for no given sum; that notes, without sum or date, were waste paper, and might insist, that the declaration, which alleged a pre-existing note, made previous to the endorsement, was at war with the facts of the case. Lord Mansfield however held, that it was a clear case, in favor of the plaintiff.

In the suits upon notes, or bills, payable to a fictitious payee, or order, it was strenuously argued, that the Law Merchant, forbade notes payable to order, to be treated as notes payable to hearer. The court however, decided, that if the rules of law prevented the instrument from operating, according to the words used therein, it may be slated in such a manner, that the law will give effect to them. The intention of the parlies is to be considered, and effect is to be given to that intention, if no rule of law is thereby violated. In this case, we must not doubt, for the defendant below admitted to the witness, and the jury have, by their verdict found, that the defendant in the court below agreed for a valuable consideration, to become, and by endorsing them, designed to become security for the money expressed in each instrument.

It appears by the bill of exceptions, that the jury were put in possession of acknowledgments by Gist, (the defendant below,) that he and Keener, were to raise money for the Eutaw Company; and of his further acknowledgments, that in consideration of his, (Gist,) endorsing the bills, the Company agreed to give him credit upon the claims, which it had against him, (he being at the time, the debtor of the Company;) that he endorsed the bills in fulfilment of said agreement, and upon the bills so endorsed, money was raised. By the terms of'the contract, then, between the Company and Gist, (for which the latter received a valuable and ample consideration,) he wa3 bound to become security for the payment of those bills of the Eutavj Company, and this, before any person was the owner of them; and moreover, that he was to become such security, by the endorsement of, (or writing his name on) them. Surely upon such testimony, (which the jury were to believe,) the appellee was entitled ex cequo et bono, to demand of the defendant below, the amount of notes, the payment of which, to the holders of them, was to be secured by his endorsement, and the amount of which, was to remain in his own hands, in order to save him from any possible loss. The man who becomes a party to such a contract, for such a purpose, and for such a consideration, is forbidden, by every thing like reason and justice, to deny, that the appellee became the owner of the bills at his special instance, and because of his undertaking to pay the holder of them their amount, if default was made by the makers of them. Surely, of such a transaction it may be said, as was said by Baron Hotham, in 1st H. Blac. Reports, 584, “unless some stubborn rule of law stand in the way of the present judgment, it ought to be supported.”

Immediately following the prayer of the appellee, we read in the bill of exceptions, that “the defendant offered to the court the following prayers.” These prayers, (fourteen in number,) are nearly all of them points, which might be legitimately insisted upon by the counsel, whose duty it was in the court below, or in this court, to argue, that the court ought not to give the instruction, of which we have already spoken. Upon a few of them, some remarks will be made.

The fifth was properly rejected. It required the court to assume, that the parties might not have known, that single bills were not such commercial, negotiable instruments as promissory notes, or might not know, what was the liability which the defendant below assumed, when he endorsed them. The law requires us to assume, that the parties did understand the contract into which they entered, and the liability which the defendant below assumed. It would have been improper to authorise the jury, to infer from the evidence the existence of such ignorance among the parties, and if so, to instruct them that if it existed, the verdict must be for the defendant.

With respect to the thirteenth, and the next point, (which may be considered in connection with it,) they seem to assume, that if the Eutaw Company had no authority (to be found in its charter,) to make those writings obligatory, then the defendant could not oblige himself, to pay to the holders of them, the sums of money expressed in either of them. It is thought, that it did not lie in the mouth of the defendant below, to make such an objection. He was capable of binding himself to pay the debts, if when they became due, they remained unpaid.

In regard to the supposed speculation in cotton, the testimony (derived from the defendant below,) was, that the cotton purchased, was “for packing their machinery.” By this, it can only be understood, that it was purchased to pack, in order to send away, the articles in which the Company was authorized by its charter to deal. For such a purpose, the Company was surely authorized to buy cotton upon credit as well as for cash, and might give its bonds as well as the verbal promise of any of its members, or its officers, for payment of the purchase money.

For reasons, which have already been suggested, we think there is no error in the refusal by the court to give the other instructions, which were not given.

There is another exception taken by the plaintiff in error, of which we will now dispose.

A rule of Baltimore county court, then existing, commenced in these words. “The court will require in all cases, that the whole testimony intended to be produced by both plaintiff and defendant, shall be offered before any question of law is raised, except objections to the competency of testimony.” In this case, after all the points submitted by the defendant, as well as plaintiff, had been decided by the court, the defendant offered to introduce other testimony. The plaintiff objected to its introduction, “at this stage of the cause,” relying on the rule of court above mentioned, and the court “refused t© permit the testimony, under the circumstances stated, to go to the jury.” Was there error in this refusal, for which an appellate court ought to reverse the judgment of the court below?

This court has heretofore (Wall vs. Wall, 2 H. & G. 82,) said, “there exists no discretion in an inferior court, to dispense, at pleasure, with their own rules, or to innovate upon established practice; and a party injured by such a course; has an undoubted right to seek redress in this court. Every suitor is interested in the interpretation of the rules of court,, applicable to his case; and an erroneous judgment of the county court in relation to them, may in many cases be as vitally injurious to him, as a wrongful judgment upon the law, which may govern his case.” Again, in the case of Dunbar vs. Conway, 11th G. J. 97, “this court has always regarded a legitimate rule of a court, as prescribing a law to the court. The proper office of such a rule, is to establish fixed and settled practice, to which the court is required to conform, and any error of opinion, in respect to its legal effect, or to its application to a particular case, will entitle the party injured to redress by appeal.35 It is believed, that the power of this court, in acting upon appeals of this description, as well as the duties of the court below, in regard to the observance of its own rules, are accurately defined in the above extracts, from its former decisions; and that a plaintiff in error, who brings such a complaint as this before us, must show that he is authorized by these former opinions of the court, to prefer such a complaint against the court below. Rules of court, adopted for the dispatch of business, and the impartial administration of justice, must be written, so that all may understand them, and when adopted, must be a law to the court, as well as to others. But it can never be a question in this court, whether a rule adopted by any inferior court, is just such a rule, as in the opinion of this court, or a majority of its members, ought to be adopted in preference to any other rule, calculated and designed to accomplish the same object.

It cannot be alleged, that in this case, the court dispensed with its rule, or changed its practice. The question then must be, had the court power to make such a rule, and because of its existence, deprive the defendant of an opportunity of introducing testimony, at a time, when according to the rule, it was inadmissible?

It appears by the record, that the defendant below had not previously offered any testimony. This however, is unimportant, as it must be taken for granted, that he had declined to offer any, at the time when the rule of court required or permitted it to be offered. The testimony offered, if it had proved the fact for which it was offered, might have rendered wholly unnecessary a discussion of the very many points of law, upon which the defendant below, seemed to the court, to be disposed to rest his case. Why this testimony was not offered at an earlier stage of the trial, is not shown. We cannot, therefore, assume, that at the time when he ought to have submitted it, according to the rule of court, it was out of his reach, or was afterwards discovered.

A court constituted as this is, would necessarily feel reluctant to entertain the question, what rules would be the best for, and therefore ought to be adopted by, the courts of any one of our judicial districts.

How long the parties shall be at liberty to introduce fresh testimony, or at what stage of the trial this privilege shall cease, it is proper that a rule of court should determine; and yet, it is not to be believed, that any rule for that purpose, which can be devised, would be equally proper for every district.

There may be reasons, oftentimes, why either party, and especially the defendant, should be permitted to settle the law of the case, before he consumes the time of the court, in examining witnesses, whose testimony may afterwards be found to be wholly unnecessary. But, who is to be the judge of this, in any particular case? Certainly not the party himself. He may suggest this course, with his reasons for preferring it, and if the court and his adversary approve of it, none would say, that the observance of the rule might not be dispensed with. But ought such a course to be pursued, if the court, when the reasons for preferring it are made known, thinks, that the rule ought to be adhered to?

It is very much in favor of the rule under consideration, that it was adopted as a rule for city business, at least fifteen years ago, and yet, that it is now for the first time, it is believed, a subject of complaint in this court.

JUDGMENT AFFIRMED.