Meadows v. . Cozart , 76 N.C. 450 ( 1877 )

This is an action on a promissory note executed by Clement Gooch to one Allen Waller on the 27th of October, 1867, for $625 and due the 27th of October, 1868; and by Waller assigned by endorsement to the plaintiff on the 15th of July, 1868, before maturity. On the 4th of January, 1869, the defendant Cozart, instituted an action against Waller on a note due him; and Waller being a nonresident he summoned Clement Gooch by attachment process as debtors to Waller upon the said note of $625 now sued on. In 1875, Cozart obtained a final judgment against Waller alone and now on his own application is made a party defendant in this action, claiming a judgment against his co-defendants, Clement Gooch, on the note sued on by the plaintiff. He alleges that the assignment of the note by Waller to the plaintiff was without consideration and fraudulent against creditors and that he has acquired a lien upon it by his proceedings in attachment. The question of evidence relied on by the defendant will be first disposed of.

On the trial the defendants Clement and Cozart became witnesses in their own behalf and offered in evidence a letter from Waller to Clement, dated in December, 1870, which claimed the money due on the bond in suit and demanded its payment to him. This evidence offered was ruled out by the Court on objection by the plaintiff. The evidence was incompetent on two grounds; first because Waller was not a party to the suit, and was a competent witness; and second, the letter was his declarations made after he had parted with the possession and title in the note, by endorsement and delivery to the plaintiff and therefore inadmissible. The defendants, however, attempt to parry the force of the objection to the competency of the declarations of Waller, by insisting that the date upon the endorsement is no evidence as to creditors that it is the true date. The answer to this is, that it has been expressly held in Lyerly v. Wheeler, 12 Ire. 290, that the date of a deed or other writing is prima facie evidence of the time of its execution upon the general principle that the acts of every person in transacting business are presumed to be consistent with truth, in the absence of any motive for falsehood. The defendant Cozart again insists that having in his answer denied that the endorsement by Waller to the plaintiff was for value, the having alleged that the assignment was without consideration and void, it was a necessary part of the plaintiff's case to show the consideration. And that is the only question. The plaintiff proved the execution of the note and the endorsement and rested his case. At common law, a promise without a consideration was void, and to enforce a contract, a consideration must have been averred and proved. The first exception to this rule was in regard to promises under seal. The solemnity of the act of sealing an instrument was held to impart a consideration and to stop the party from denying it. The next relaxation of the rule was induced by the necessities of commerce, and bills of exchange and promissory notes were held to beprima facie evidence of consideration. A distinction was at one time attempted to be made between bills of exchange and promissory notes, holding that the former were negotiable and the latter not, but the statute 3 and 4 Anne, ended the controversy, by making promissory notes "assignable or endorsable over in the same manner as inland bills of exchange are, or may be, according to the custom of merchants." 1. Lord Raymond 757.

One effect of this statute, (and ours is but a copy of the English Statute; Battle's Revisal chapter 10 § 1.) was, that an action of debt might be maintained on a promissory note, without alleging a consideration and of course without proving one. As the execution of a promissory note imports a consideration, so likewise does an endorsement, and for the same reason; and the endorsee holds just as the payee held. McArthur v. McLeod, 6 Jones 475. The possession and production in evidence of a negotiable note by the endorsee, imports that he acquired it bona fide for full value before maturity and without notice of any fact impeaching its validity. That establishes a prima facie case, and he may there rest it. Nallet v. Parker, 6 Wend. 615; McCann v. Lewis, 9 Cal. 246; 1 Daniel on Neg. Instr. §§ 160, 170, 812. As the law presumes that every man acts fairly, it rests with the defendant to show some probable ground of suspicion, before the plaintiff can be required to do more than produce the note on which he founds his action. But when this is done, when the defendant shows there was fraud or illegality in the transfer to the plaintiff, another phase is thrown on the transaction and the holder is called on to rebut the suspicion by proving an adequate consideration.Holmes v. Karsper, 5 Binn. 469; 1 Daniel on Neg. Instr. §§ 814, 815. In our case no competent evidence was offered by the defendant to rebut the presumption of consideration for the endorsement. Cozart is therefore not entitled to judgment, but the plaintiff is.

No error.

PER CURIAM. Judgment affirmed.