Grice v. . Ricks , 14 N.C. 62 ( 1831 )

Upon non assumpsit pleaded, the case was that the defendant had assigned to the plaintiff a note, made by one Lemon, payable to the defendant, and had written over his endorsement the following words: "I assign the within to John Grice, until paid." The plaintiff then proved that when this endorsement was made it was agreed between him and the defendant that the note should be placed immediately in the hands of an attorney named by the defendant, for suit, and that if the amount due on it was not collected, he, the defendant, would be answerable; that suit was immediately commenced by the attorney designated by the defendant, who was retained by the plaintiff. The writ was in assumpsit, and was returnable to the ensuing November Term of the county court; that at February Term the writ was amended, so as to be in debt, and judgment entered up, with a stay of execution until May Term following. The defendant proved that if execution had issued from February Term, the amount of the judgment would have been realized.

There was no evidence offered by the plaintiff that notice had been given to the defendant of Lemon's default in making (63) payment of the note.

His Honor instructed the jury that to enable the plaintiff to recover, it was necessary for him to show that there had been due diligence used by him to collect the amount of the note from Lemon. That granting a stay of execution for three months was evidence of a want of that diligence, and that if the neglect was the act either of the plaintiff or of his attorney, he could not recover. That the attorney was the agent of the plaintiff, and was responsible for misconduct to him only. That the defendant had no redress against the attorney.

A verdict was returned for the defendant, and the plaintiff appealed. It is not disputed that the giving of time, whereby the debt was lost by the insolvency of the debtor, discharged the defendant as an endorser or guarantor, provided it was the act of the plaintiff himself, or of one for whose acts the plaintiff was responsible.

Ordinarily, an agreed entry in a cause is taken to be the act of the parties. And, also, ordinarily, the act of an attorney is taken to be the act of the party to the suit whom he represents. If, therefore, the case stood simply upon the effect of the contract, as written in the endorsement, the charge of the court would have been correct. But it was part of the agreement, as was proved viva voce, that the note transferred should be put in suit immediately, under the management of a particular attorney. He might have possessed the especial confidence of the defendant, and upon that his willingness to guaranty might have been founded. Indeed, the attorney might have been selected by the defendant himself, and that provision introduced at his instance and for his benefit. In that case, the defendant must be considered as contracting for his skill and diligence. That he could not sue the attorney for willful or negligent mismanagement does not determine this point, for one (64) may bind himself that a stranger shall do a particular act. At most, it would be a circumstance which might incline a jury to think that the attorney was selected by the plaintiff and not by the defendant. In the opinion of the Court, therefore, it ought to have been left to the jury to say whether the plaintiff or the attorney gave the stay of execution; and if the latter, whether the plaintiff or defendant selected the particular attorney, and agreed to be responsible for his conduct, as between themselves. And if the cause depended on that, there would be a new trial.

But the case further states that the plaintiff gave no evidence of notice to the defendant of nonpayment, or that he was looked to. If such notice was necessary, the judgment must stand, although the court may have erred in other respects. The plaintiff would not submit to a nonsuit under the opinion of the court adverse to him on one point. But he put his cause to the jury, choosing to run his chances for a verdict upon the whole case. If upon the whole case the verdict was right, it must stand. The point of notice was made by the defendant; and if, under any circumstances, the plaintiff could not recover upon the proof made by him, there is no ground to disturb the verdict, since the error of the court upon a different matter did him no harm.

Was notice necessary? We think it was. It is a general rule of law, founded in sound reason, that where the liability of one party is not absolute and direct, but is upon a collateral obligation, dependent upon and arising from certain things to be done by the other party, and lying peculiarly within his knowledge, he who is to take benefit by the engagement must give the other notice of what has been done, and that he is held liable. From the nature of things, notice is part of the agreement, and the debt does not arise before notice. It is of the nature of a special request, and must be alleged in the declaration, and proved. Such is the contract of an endorser, under the law merchant, which is only one species of guaranty well defined indeed, and settled by long usage. (65) The doctrine has been applied to guaranties for goods sold. Russel v. Clark, 7 Cranch., 69. It has also been applied to a guaranty of a note or bill. It is true that as to the time of giving notice the rule is not so strict as it is between endorser and endorsee. But notice in a reasonable time and before suit is indispensable. Phillips v. Astling, 2 Taunt., 206. What duty existed on the part of Ricks until Grice gave him notice that the principal debtor had not paid the debt? How was Ricks otherwise to knew that Grice had not received the money? Was he bound to volunteer payment? We think not, but that upon the authorities, notice to the defendant formed a necessary part of the plaintiff's case.

PER CURIAM. Judgment affirmed. Cited: Atkinson v. Clark, post, 174; Adcock v. Fleming, 19 N.C. 226;Reynolds v. Magness, 24 N.C. 31; Lewis v. Bradley, ibid., 305; Beeker v.Saunders, 28 N.C. 381; Irions v. Cook, 33 N.C. 208; Greenlee v.McDowell, 39 N.C. 485; Spencer v. Carter, 49 N.C. 289; Cox v. Brown,51 N.C. 101; Brewer v. Ring and Valk, 177 N.C. 485; Cauble v. Express Co.,182 N.C. 451; Rierson v. Iron Co., 184 N.C. 370.