4 Rand. 553 | Va. Ct. App. | 1826
delivered the opinion of the Court.
The object of this suit was to injoin three, judgments recovered by Baker'for the use of the Farmers’ Bank, against the plaintiff and Lane. These judgments were entered as confessed by those defendants, and were so entered by some mistake; Vanmeter never having employed counsel, or authorised the confession of judgments.
There are several grounds for relief asserted- by the appellee. The first is, that such judgments could not have been had, or if had, would have been erroneous and reversible, if they had not been entered as by confession; the actions being joint against the drawer and endorsers of an inland bill of exchange, not upon'its face negotiable at any of the chartered Banks of Virginia. This objection to the form of the actions, and the fact that the judgments would have been erroneous and reversible, if they had not been entered by mistake, as confessed, can have no weight in a Court of Equity. There the rule is, that whosoever asks equity must do it, as a condition of relief; and a judgment at law, however obtained, no matter by what fraud, accident or surprise, is allowed to stand as a security for what Is justly due, whether that be a part or the whole of the debt recovered. The enquiry in a Court of Equity is ne
The next objection taken to these judgments, is on the merits. The plaintiff alleges that the three endorsers, himself, Marshall and Triplett, were joint sureties, by virtue of their endorsement of the bills drawn by Lane, and discounted at the Bank for Lane’s accommodation: that each was bound to bear a due proportion of the loss, Lane being insolvent; and that the Bank, who is not charged with notice of that fact, had colluded with Marshall to throw the whole burthen upon him, by dismissing the suit as to Marshall, upon his agreeing to hold himself bound for the debts, and to pay them immediately, if Lane and Van-meter should be unable to pay.
If all this were true, and the endorsers were mutually bound to each other for contribution, and the officers of the Bank had full knowledge of the facts, they would have been guilty of no fraud or wrong to the plaintiff, by making such an arrangement with Marshall, and carrying -it into effect. The drawer and endorsers were severally liable to the Bank for the whole amount of the bills in solido. The Bank had a right to pursue any one or more, or all, in several actions; and to have coerced the payment of the whole from either of them. The legal or equitable rights of securities to contribution among themselves, can never affect the rights of the creditor, or bind him to proceed against each for his proportion of the debt: unless, indeed, where the obligations of the parties are in the form of a joint contract, in which case, all must be sued together, but either may be compelled by execution to pay the whole.
The remaining objection is also on the merits.
The bills were presented before they were due, and the drawee refused to accept; and Vanmeter alleges that n©
The facts, upon which the question, whether Vanmeter was or was not entitled to notice, are stated by himself in his bill. He says, that the bills were drawn and endorsed for the accommodation of Lane, the drawer; and for the purpose of getting them discounted at the Bank: that no consideration, whatever, passed between the parties, or any of them; and that there was no expectation that they would be paid by the drawee.
It is a general rule, that the drawer or endorser of a bill of exchange, is discharged from responsibility, unless' he has due notice of the dishonor of the bill, by non-acceptance or non-payment. This notice was required originally, for the purpose of enabling the party to take promptly such measures for his security, as might be in his power; and it seems to have been originally required of him, if he complained of the want of notice, to prove, that for the want of it, he had suffered some injury. The modem doctrine, however, is perfectly well settled, that the law implies an injury, from a want of due notice; and this presumption is so strong, that in order to repel it, proof is required to shew that it was impossible for the party to suffer any damage or inconvenience. Thus, in the case of a drawer; if the bill be drawn without funds in the hands of the drawee, and the drawer had no reason to expect that the bill would be accepted; this is considered as a case in which it is shewn that no possible prejudice can result to the drawer from the want of notice; since he knew, when he drew the bill, that it would devolve on him to take it up, as well without as with notice of its dishonor; and having no reason to expect the bill to be accepted, it cannot be
The case of an endorser is still stronger than that of a drawer; for he has, in general, a right to resort to the drawer for indemnity, and to enable him to assert this right with the greatest possible effect, he ought to have immediate notice. But, even as to an endorser, a case may occur, in which it may be shewn to be impossible for him" to suffer any inconvenience for the want of notice. As in the case of a note endorsed by the payee for the accommodation of the drawer, who should place in the hands of the endorser funds sufficient to discharge it. The latter would not be entitled to notice of the non-payment; because he could not possibly suffer any damage by the failure to give him-notice, Carnay v. Da Costa, 1 Esp. Rep. 303; since the only purpose of a notice, would be, to inform him of the necessity of resorting to the drawer for indemnity, which, in this case, is unnecessary, as he already has that indemnity in his hands.
With the exception of the cases, in which it can be shewn, that they could not, by possibility, suffer an injury by the failure to give them notice, the drawer and endorser have in all cases a right to strict notice, unless they waive that i’ight, or forfeit it by their own fraud. I do not find this ground of fraud, very distinctly laid down as a reason for dispensing with the necessity of notice. But, there are many cases in which it appears to have been the sole ground of the judgment, and in which, the principle is distinctly alluded to.
In Leach v. Hewitt, 4 Taunt. 731, the defendant had endorsed a bill for the accommodation of a third person, whose name was noton it. The bill purported to be drawn by one.firm, which had no existence, and accepted by another fictitious firm; but this was unknown to the endorser. The instruction of Mansfield, Justice, to the jury, after-wards approved of by the Court, was, that the endorser was entitled to notice, if he was not privy to the fraud. If the endorser in that case, had been privy to the fraud, he would not have been entitled to notice. Not being-privy, he was entitled to claim against the person, for whose accommodation he had endorsed; and the want of notice might have impaired his remedy.
These cases are referred to, for the purpose of shewing that an endorser, who unites with the drawer to deceive the holder, by representing a bill as one that will probably be accepted, with a knowledge that it will not, is guilty of a fraud, which deprives, him of the right to insist upon notice. The principle, although perhaps pushed too far in its practical application in some of those cases, is just. If a bill were drawn upon a fictitious person, and was endorsed with a full knowledge of that fact, for the purpose of enabling the drawer to raise money by getting it. discounted, it could not for a moment be doubted, that the holder could recover against the endorser, without giving him no
But, the case-under consideration, is precisely the case last supposed, and the proof is full. Vanmeter, in his bill sworn tomates that the bills were drawn and endorsed for the accommodation of the maker, for the purpose of procuring a discount at the Bank; and that there was no expectation that they would be paid by the drawee; and the answer of the Bank, sworn to by the Cashier, states, that if the facts so stated by plaintiff, had been known to .them, they would not have discounted these bills. I think this was a fraud upon the Bank, and that Vanmeter was therefore entitled to no notice.
It is not necessary to enquire whether, if Vanmeter would have had a right to claim contribution from the other endorsers, -if they had had due notice of the non-acceptance or non-payment, he was therefore entitled to notice, jn order that he might give them notice, and so secure his recourse against them. For, he had no right to claim contribution from them. There was no agreement amongst them, that each should bear a part of the loss as joint sure
The oi’der refusing to dissolve the injunction upon the merits, must be reversed, and the injunction dissolved.