Sherwood v. Francis , 11 Vt. 204 ( 1839 )

The facts in this case will appear from the opinion of the court, delivered by

Bennett, J.

This action was brought by the plaintiff as indorsee of a promissory note, executed prior to the repeal of the statute restraining the negotiability of mercantile paper, and made payable to E. W. Hawley or order. With a view of effecting an offset on this note, the defendant filed bis declaration On book, under the statute, against the payee of the note ; and the case comes here on exceptions to the decision of the court below on the auditor’s report. The auditor found the fact — and no question has been raised on the sufficiency of his finding — that Francis had notice of the transfer of the note on the 4th of March, 1836; and that, prior to that time, to wit, on the 20th January, 1836 he had signed a note, with Hawley as his surety, for $50, to the Bank of Vergfennes, at three months, which Francis, prior to the notice of the indorsement, had agreed to pay, and which he subsequently did pay. The court below allowed this sum in the report of the auditor, as constituting a proper item of offset on the note, which was accordingly added to the report, and applied in offset to the note against the indorsee.

It is to be remarked, that the auditor does not report with whoril the agreement was made by Francis to pay the note, or that there was any consideration, whatever, for the agreement; or, if a consideration, what it was. If the agreement was made with Hawley, that Francis should pay the note, upon a new consideration, and the note was paid on receipt of such consideration, then it follows that Francis would not become the creditor of Hawley by such payment-.

If the agreemfent was without consideration, no obligation was imposed of rights conferred by such agreement', and if Francis, after notice of the transfer of the note, proceeded to.pay the note, under such nudum pactum, he must be regarded as a volunteer, and can have, neither afdawjnor in equity, any claim to make such payment the basis of an offset on the note against a bona fide indorsee for a valuable consideration, and without notice of such agreement, or the relation in which the signers stood upon the note to the bank. The judgment below, then, must be reversed, and judgment rendered on the report for the' sum reported to b'@ due ás a balance from Hawley to Francis, on the 4th day of March, 1836, without reference to the fifty dollars, which judgment must constitute a legal offset on the note against the indorsee; and judgment rendered in the original suit accordingly.